CAG Flags Huge Gap in Telangana’s Tax Receipts

Hyderabad: The Comptroller and Auditor General of India (CAG) reported that the state government had achieved only 72.87 per cent of projected tax revenues for 2025-26 by the end of January, raising concerns about its ability to meet annual targets with just two months remaining in the fiscal ending March 31.

According to the CAG’s ‘Government Accounts at a Glance’ report released on Monday, Telangana recorded a revenue deficit of ₹ 10,566 crore against a budget surplus of ₹ 2,738 crore. While the fiscal deficit remained at ₹69,148 crore, the primary deficit reached ₹45,063 crore, exceeding the ₹34,640 crore forecast by over ₹10,000 crore.

The report states that revenues stood at ₹2.07 lakh crore, falling short of the Budget estimate of ₹2.84 lakh crore. Of this, tax revenue amounted to ₹1.26 lakh crore, representing 72.04 per cent of the projected ₹1.75 lakh crore. Capital revenues were mainly supported by borrowings and other liabilities; which amounted to ₹69,187 crore, accounting for 125.53 per cent of the ₹54,009 crore budget estimate; This shows increasing dependence on debt to cover resource gaps.

Goods and Services Tax collections reached ₹43,673 crore, 73.15 per cent of the ₹59,704 crore estimate. Sales tax collections stood at ₹27,911 crore against the budgeted ₹37,463 crore, while state excise taxes brought in ₹19,083 crore or 69.09 per cent of the target of ₹27,623 crore. Despite the government increasing the license fee for retail liquor outlets from ₹2 lakh to ₹3 lakh, the growth in consumption revenue remained moderate.

The state’s share of Union taxes performed comparatively better at ₹16,496 crore, which is 77.83 per cent of the estimate of ₹21,195 crore. Non-tax revenue was sluggish at ₹7,864 crore, just 24.87 per cent of the projected ₹31,618 crore. Charitable donations and contributions were also low at ₹4,213 crore; this was 18.49 per cent of the budgeted ₹ 22,782 crore.

On the expenditure side, interest payments exceeded the Budget provision, reaching ₹24,085 crore against the estimated ₹19,369 crore. The interest burden is expected to be around Rs 30,000 crore by the end of the financial year. Pension payments also beat estimates, rising to ₹15,717 crore against the forecast of ₹13,109 crore. Salaries and wages stood at ₹39,858 crore, accounting for 89.61 per cent of the ₹44,478 crore allocated for the year.