Telangana Govt likely to fall short of revenue expenditure in 2025-26 fiscal

The Telangana Government is likely to fall short in expected revenue expenditure in the current fiscal year (2025-26), similar to previous years.

The state’s revenue expenditure till January-end was ₹1.48 lakh crore; this was only 65.62% of the ₹ 2.26 lakh crore projected in the (2025-26) budget estimates. Expenditures for the remaining two months (February and March) have not been announced yet. According to the Comptroller and Auditor General of India, the situation was no different in the financial year 2024-25 when the State recorded a revenue expenditure of ₹ 1.77 lakh crore against the projected ₹ 2.21 lakh crore.

Fiscal Year 2024-25

The CAG, in its financial accounts report for 2024-25, said it has estimated the State’s revenue and capital expenditure at ₹ 2.74 lakh crore. But it managed to spend ₹2.18 lakh crore, around 80% of the budget estimates. Interestingly, while the State has lagged behind in revenue expenditure, it has recorded a significant increase in capital expenditure in the fiscal (2024-25). However, capital expenditure, estimated at ₹33,487 crore, crossed the ₹36,000 crore mark and reached ₹36,082 crore (109%).

As expected, interest payments, salaries/wages and pension payments were above expectations. Even though the government had budgeted interest payments of ₹ 17,739 crore in 2024-25, it ended up paying ₹ 26,688 crore, i.e. ₹ 9,000 crore more. On the salaries/wages and pensions front, the Government paid ₹42,245 crore and ₹16,950 crore, respectively, against ₹40,041 crore and ₹11,649 crore projected in the budget estimates.

One of the most important reasons for this deficit was that revenues did not match expectations. The State Government had estimated revenues at ₹2.21 lakh crore, but ultimately generated revenue revenue of ₹1.69 lakh crore, while capital receipts in the form of debentures and other liabilities also contributed ₹49,847 crore. Revenue accruals in the form of non-tax income, charitable donations and contributions fell short of expectations as the State recorded non-tax income of ₹ 23,607 crore (versus projected ₹ 35,208 crore) and charitable and contribution donations of ₹ 7,913 crore (versus projected ₹ 21,636 crore), leading to a deficit.

As a result, the State recorded a revenue deficit of around ₹9,000 crore against a projected surplus of ₹297 crore for the financial year (2024-25).