Telangana Deputy Chief Minister Bhatti Vikramarka presented the state’s budget for the 2025-26 financial year. He highlighted concerns over revenue shortfalls and rising debt. For the past eight years, Telangana has faced an average revenue deficit of 21%, leading to a 17% reduction in spending. This has impacted several developmental projects.
In 2023, the state estimated revenue of Rs 2.45 lakh crore but collected only Rs 1.92 lakh crore, resulting in a 21% shortfall. Due to these financial constraints, Telangana has had to cut back on spending, which has affected various initiatives.
A significant portion of the budget—52%—is allocated to fixed expenses such as salaries, pensions, and interest payments. This leaves the government with limited financial flexibility. Additionally, borrowing is restricted by Fiscal Responsibility and Budget Management (FRBM) regulations, making it harder to fund new projects.
Key Allocations in the Telangana Budget 2025-26
Health and Welfare:
The Health, Medical, and Family Welfare Department has been allocated Rs 12,393 crore, an 8.06% increase from last year. The government also plans to set up 95 free dialysis centers across the state.
Infrastructure and Urban Development:
The government has announced the ‘Mega Master Plan 2050’ to transform Hyderabad into a global city. This plan includes improvements in transportation, technology, infrastructure, and environmental conservation. The Musi Riverfront Development Project is also a key part of this initiative.
Welfare Schemes:
Over Rs 75,000 crore has been 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:
The government has set aside Rs 21,221 crore for the energy sector. Notably, the Yadadri Thermal Power Plant is expected to be completed by May 2025.
Education:
Rs 23,108 crore has been allocated for education. The budget includes plans for infrastructure development and the establishment of Young India Integrated Schools.
Irrigation:
The irrigation sector will receive Rs 23,373 crore. This funding will focus on completing pending projects under a structured classification system.
Industrial Development:
A ‘Future City’ covering 765 sq km will be developed, featuring an artificial intelligence (AI) hub. Google has promised to set up an AI-powered acceleration center within the AI City.
Agriculture:
The state has allocated Rs 24,439 crore to support agricultural initiatives like Rythu Bharosa and Indiramma Abhaya Hastham.
Municipal Administration:
Rs 17,677 crore has been set aside for urban infrastructure projects. This includes the construction of 31 flyovers and 17 underpasses under the HICITI initiative.
Telangana’s Financial Challenges
The total proposed budget for 2025-26 is Rs 3,04,965 crore. Of this, Rs 2,26,982 crore is for revenue expenditure, while Rs 36,504 crore is for capital expenditure. The state’s Gross State Domestic Product (GSDP) has grown by 10.1%, and per capita income has increased by 9.6%, surpassing the national average.
However, Telangana’s borrowing capacity is limited by FRBM regulations. If additional funds are not secured, further spending cuts may be required, potentially affecting development projects. As the government navigates these financial challenges, policymakers will need to find ways to address revenue shortfalls and expenditure constraints.
