Telangana Deputy Chief Minister Bhatti Vikramarka presented the Congress government’s second full-time budget for the 2025-26 fiscal year, highlighting revenue shortfalls and rising debt constraints. The state continues to face a persistent gap between projected and actual revenue, averaging a 21 per cent shortfall over the past eight years. This revenue deficit has resulted in 17 per cent underspending, affecting key developmental projects.
Over the years, Telangana has struggled with discrepancies between budget estimates, revised projections, and actual collections. In 2023, the state projected revenue of per cent 2.45 lakh crore but collected only Rs 1.92 lakh crore, marking a 21 per cent deficit. The budget constraints have also led to spending reductions, impacting developmental initiatives.
With 52 per cent of the budget allocated to committed expenditures—including salaries, pensions, and interest payments—Telangana’s fiscal flexibility remains limited. Borrowing options are further constrained by Fiscal Responsibility and Budget Management (FRBM) regulations, raising concerns over future spending capacity.
Key Allocations in the Telangana Budget 2025-26
– Health and Welfare: Rs 12,393 crore allocated to the Health, Medical, and Family Welfare Department, an 8.06 per cent increase from the previous year. Additionally, 95 new free dialysis centers will be established across the state.
– Infrastructure and Urban Development: Telangana has unveiled the ‘Mega Master Plan 2050’ to transform Hyderabad into a global city. The plan focuses on transportation, technological advancements, infrastructure, and environmental conservation, including the Musi Riverfront Development Project.
– Welfare Schemes: Over Rs 75,000 crore allocated for various welfare programs:
– Rs 40,232 crore for Scheduled Castes Welfare
– Rs 17,169 crore for Scheduled Tribes Welfare
– Rs 11,405 crore for Backward Classes Welfare
– Rs 3,591 crore for Minority Welfare
– Rs 2,862 crore for Women and Child Welfare
– Energy Sector: Rs 21,221 crore allocated, with the Yadadri Thermal Power Plant slated for completion by May 2025.
– Education: Rs 23,108 crore earmarked, with plans for infrastructure development and the establishment of Young India Integrated Schools.
– Irrigation: Rs 23,373 crore assigned to the sector, prioritizing pending projects under a structured classification.
– Industrial Development: A ‘Future City’ spanning 765 sq km will be developed, including an AI hub. Google has committed to setting up an AI-powered acceleration center within the AI City.
– Agriculture: Rs 24,439 crore allocated to support schemes like Rythu Bharosa and Indiramma Abhaya Hastham.
– Municipal Administration: Rs 17,677 crore earmarked for urban infrastructure, including 31 flyovers and 17 underpasses under the HICITI initiative.
The Telangana government has proposed a total outlay of Rs 3,04,965 crore for the 2025-26 fiscal year, with Rs 2,26,982 crore allocated for revenue expenditure and Rs 36,504 crore for capital expenditure. The state’s Gross State Domestic Product (GSDP) has grown by 10.1 per cent, while per capita income has risen by 9.6 per cent, exceeding the national average.
Telangana’s borrowing capacity is restricted by FRBM limits, posing challenges in bridging the fiscal deficit. If additional funds are not secured, further expenditure cuts may be necessary, affecting developmental initiatives. The state’s financial situation remains under scrutiny as policymakers navigate revenue shortfalls and expenditure constraints.
