Hyderabad: Telangana has already used up nearly one-fifth of its annual borrowing limit in just the first month of the 2026-27 financial year — a clear sign of how heavily the state relies on debt to cover the gap between income and spending.
According to the Comptroller and Auditor General's April 2026 report, the government raised ₹11,413.93 crore through borrowings and liabilities. This accounts for 19.52% of the full-year borrowing target of ₹58,458.71 crore — more than double the ₹5,230.98 crore borrowed in April last year.
Revenues Lag Behind
Revenue collections were modest. Telangana earned ₹10,974.73 crore in April, just 4.55% of the annual revenue target of ₹2.41 lakh crore.
Tax revenues remained the backbone, contributing ₹10,598.33 crore (96.6% of total receipts). GST brought in ₹3,155.24 crore, while sales tax added ₹2,923.88 crore. Excise duties contributed ₹1,445.28 crore, while stamps and registration generated ₹1,413.66 crore.
Telangana received ₹1,260.10 crore as its share of Union taxes. Other taxes, including motor vehicle levies, added ₹400.01 crore. Non-tax revenue was weak at ₹359.51 crore (just 1.01% of the annual target). Grants from the Centre were negligible at ₹16.89 crore — only 0.07% of the yearly estimate.
Expenditure Far Exceeds Revenue
The state spent ₹21,472.31 crore in April, nearly double its receipts. This imbalance led to a revenue deficit of ₹8,526.59 crore and a fiscal deficit of ₹11,413.93 crore — already 19.52% of the full-year limit.
Key Spending Areas
- Salaries: ₹4,449.24 crore
- Pensions: ₹1,893.11 crore
- Interest payments: ₹2,350.90 crore
- Subsidies: ₹4,727.38 crore — over a quarter of the annual subsidy budget spent in one month
- Capital expenditure: ₹1,970.99 crore (just 4.17% of the annual capital outlay target of ₹47,267 crore)
What Analysts Say
Experts note that while heavy borrowing early in the year is not unusual, Telangana's dependence on debt is striking. The state's ability to boost non-tax revenues and secure more central grants will be crucial in the months ahead.
Tax collections from GST, sales tax, and excise duties remain strong, but revenue growth must accelerate if the government hopes to reduce its reliance on borrowings while funding welfare schemes, subsidies, and infrastructure projects.
This financial strain highlights the challenges Telangana faces in balancing its expenditures with income, especially as it continues to prioritize social programs and development initiatives.
