Telangana Industry Demands Growth-Oriented Budget with Boosted Capital Spending
HYDERABAD: With the Telangana state budget scheduled for presentation on March 20, the business community has issued a strong appeal to the government. Telangana Inc is urging authorities to prioritize a growth-focused budget for the fiscal year 2026-27, emphasizing the need for higher capital expenditure, robust support for Micro, Small, and Medium Enterprises (MSMEs), and targeted investments in critical sectors like infrastructure and power.
Call for Increased Capital Expenditure Amid Revenue Constraints
FTCCI president R Ravi Kumar highlighted that the previous budget for 2025-26, which totaled Rs 3.05 lakh crore, was heavily centered on welfare programs, agriculture, and infrastructure development. Despite facing significant resource limitations, industry stakeholders are anticipating a 5% to 7% rise in overall expenditure for the upcoming fiscal year.
Kumar pointed out a critical issue: approximately 75% of the current budget is consumed by revenue expenditure, leaving minimal scope for capital creation. He has formally requested the government to increase capital expenditure by at least 2% year-on-year. This strategic move is deemed essential for enhancing infrastructure quality and sustaining long-term economic growth momentum.
Ambitious Economic Goals Require Stronger Manufacturing Base
The industry leader underscored Telangana's ambitious economic targets, which include becoming a $1 trillion economy by 2034 and scaling up to $3 trillion by 2047. Achieving these milestones will necessitate a significantly strengthened manufacturing sector. Kumar advocated for the development of specialized industrial corridors and the establishment of industrial parks in Tier-II and Tier-III cities to decentralize growth and stimulate regional development.
Addressing Subsidy Disbursement Delays for MSMEs
On the topic of industrial promotion, Kumar revealed concerning data regarding subsidy allocations. Previous budgets had earmarked between Rs 2,000 crore and Rs 2,500 crore for subsidies, but actual disbursements were drastically lower, averaging only around Rs 500 crore. This discrepancy has led to pending subsidies accumulating to over Rs 5,750 crore.
To rectify this, the industry expects the government to allocate approximately Rs 3,500 crore in the forthcoming budget and ensure timely disbursement. This financial support is crucial for bolstering businesses, particularly MSMEs, which are vital for employment and economic resilience.
Balancing Growth with Quality of Life and Affordability
CII Telangana chairman Goutham Reddy Mereddy emphasized that the state's long-term growth aspirations must be balanced with maintaining infrastructure quality, livability, and affordability. He warned that escalating traffic congestion and rising living costs could diminish Telangana's attractiveness to investors if not proactively addressed through well-crafted budget measures.
Mereddy stressed that sustainable economic expansion requires a holistic approach, integrating industrial growth with enhancements in urban planning and public services to preserve the state's competitive edge.
