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Informist, Thursday, Mar. 20, 2025

By Krity Ambey

NEW DELHI – The Telangana government's aim to strike a balance between welfare and development in 2025-26 (Apr-Mar), as stated by Deputy Chief Minister Bhatti Vikramarka Mallu in his Budget speech for FY26, is likely to push the state's market borrowing for the next fiscal year to a record high of INR 653.39 billion.

For the current fiscal year, however, the state has cut its market borrowing estimate to INR 569.40 billion from the initial projection of INR 571.12 billion. Telangana has raised INR 547.09 billion from the bond market so far in FY25.

"We have struck a perfect balance between welfare and development – much like a twin engine system – driving the chariot of good governance forward with exceptional momentum," Mallu, who also holds the finance portfolio, said on Wednesday. Among development-related initiatives, the state government has announced the Mega Master Plan 2050, under which it will promote the establishment of renewable energy projects.

It has also annouced the setting up of an artificial intelligence city, or AI City to feature data centres, high-performance computing facilities, specialised educational programmes, a public awareness centre, and a dedicated AI university. Mallu, however, did not specify any outlay for the AI city. 

For welfare, the southern state has earmarked INR 244.39 billion for the farm sector, INR 316.05 billion for rural development, and INR 123. 93 billion for the health sector. "Committed to ensuring that the benefits of development reach the most vulnerable, we have allocated sufficient funds in the current budget for both development and welfare sectors," Mallu said.

With these alocations, Telangana's fiscal defict is set to expand 15.5% to INR 540.09 billion in FY26, according to the state Budget document updated late on Wednesday. For the current year, the state goverment has cut the estimate for fiscal defcit to INR 467.64 billion from the INR 492.55 billion projected earlier.

At INR 540.09 billion, the state's fiscal deficit is likely to be 3% of gross state domestic product in FY26, the same as that projected for the current year. Telangana's fiscal deficit is within the limit of 3.5% of GDSP set by the Centre for states.

The state's total spending in FY26 is expected to rise to INR 3.05 trillion from the revised estimate of INR 2.66 trillion for the current fiscal year. Revenue expenditure for next year is pegged at INR 2.27 trillion, up 15.7% from the revised estimate of INR 1.96 trillion.

The Budget has pegged capital spending in FY26 at INR 365.04 billion, 10.3% higher than the current year's revised estimate of INR 330.88 billion. The state had spent INR 439.18 billion on capital expenditure in FY24.

Revenue receipts in FY26 are projected at INR 2.30 trillion, higher than the revised estimate of INR 2.02 trillion for this year. The state government expects to earn INR 1.45 trillion from its own tax revenue in the next fiscal year. Telangana also expects to receive INR 290 billion as a share of taxes from the Centre, and another INR 227.83 billion as grants-in-aid.  End

Edited by Avishek Dutta

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