Telangana’s finances remain under pressure with widening deficits, slow revenue growth and rising borrowings. The State has slipped into a revenue deficit despite projecting a surplus, while collections lag behind targets and liabilities exceed Budget Estimates.
Published Date – 18 February 2026, 08:56 PM
Hyderabad: With less than 40 days left in the financial year 2025-26, the State finances continue to struggle. Indicating tough conditions ahead, Telangana’s fiscal position remains under stress, with widening deficits, slow revenue growth and rising dependence on borrowings under the Congress government.
Against a Budget Estimate of Rs. 2.29 lakh crore in revenue receipts for 2025-26, the State has realised Rs. 1.38 lakh crore up to January, which is just 60.23 per cent of the target. This is higher than the previous fiscal year’s 55.96 per cent during the corresponding period in 2024-25, but lower than 63.2 per cent in 2023-24. With just two months left in the financial year, the monthly audit report of the Comptroller and Auditor General pointed out that revenue mobilisation remained significantly behind projections. Tax revenue stands at Rs. 1.26 lakh crore, which is 72 per cent of the annual target estimated at Rs. 1.75 lakh crore.
Even key components show uneven performance. GST collections proved to be a saving grace for the State finances, realising 73.15 per cent of the target, while State excise collections were at 69 per cent, with Stamps and Registration achieving 64.68 per cent of the target. Though all were marginally higher compared to the previous fiscal year 2024-25, they fell short when compared with the financial year 2023-24.
More worrying is non-tax revenue, which has achieved only 24.87 per cent of its target, pointing to structural weaknesses in internal resource generation. Grants-in-aid and contributions were just 18.49 per cent of the estimates, indicating limited support from the Centre as well. Meanwhile, revenue expenditure has reached Rs. 1.48 lakh crore, which is 65.62 per cent of the annual estimate. This includes salaries and pensions, interest payments and subsidies.
The most alarming indicator is the revenue deficit. Against a projected revenue surplus of Rs. 2,738.35 crore, the State has slipped into a deficit of Rs. 10,566 crore by January. Instead of narrowing, fiscal stress is deepening as borrowings increase.
Capital receipts show that net borrowings and other liabilities have touched Rs. 69,148 crore, which is 128 per cent of the Budget Estimate of Rs. 54,009 crore. This means Telangana has already borrowed more than what it initially planned for the year. The fiscal deficit stands at Rs. 69,148 crore, while the primary deficit has widened to Rs. 45,063 crore.
With revenue collections lagging, interest payments overshooting targets and borrowings exceeding projections, Telangana’s financial health appears strained. Unless corrective measures are taken swiftly, particularly in strengthening tax collections and controlling committed expenditure, the State risks entering a prolonged phase of high deficits and mounting liabilities, financial experts point out.
