Telangana’s 2025-26 Budget Likely to Stay Below 3 Lakh Crore

Telangana’s 2025-26 budget is expected to remain under ₹3 lakh crore due to lower revenue generation and rising fiscal challenges.

State Budget Expected in March, Likely Below ₹3 Lakh Crore

The Telangana government is set to present its Budget for the financial year 2025-26 in March. However, financial constraints may keep the total outlay below ₹3 lakh crore—a milestone the state has yet to reach since its formation in 2014.

For reference, the state’s first budget for the nine-month period of 2014-15 stood at ₹1,00,637 crore. The current 2024-25 budget, presented by Deputy Chief Minister Mallu Bhatti Vikramarka, had an initial allocation of ₹2.91 lakh crore. However, revised estimates suggest a reduction to ₹2.55 lakh crore, reflecting a shortfall of ₹36,000 crore due to lower-than-expected revenue collections.

Revenue Shortfall and Rising Deficits

A report submitted to the Comptroller and Auditor General of India (CAG) in January 2025 revealed that by December 2024, Telangana’s total expenditure stood at ₹1,57,495.91 crore—only 61.90% of the budgeted allocation.

Revenue expenditure reached ₹1,32,200.15 crore, covering 59.83% of the planned ₹2,20,944.81 crore, while capital expenditure was ₹25,295.76 crore, achieving 75.54% of the allocated ₹33,486.50 crore.

The state’s revenue deficit surged to ₹19,892.85 crore in December, up from ₹14,288.37 crore in November. This starkly contrasts with the initially projected revenue surplus of ₹297.42 crore. Similarly, the fiscal deficit climbed to ₹48,178.94 crore—97.81% of the estimated ₹49,255.41 crore—compared to ₹37,850.08 crore in November. Given these financial pressures, the state is likely to propose a budget ranging between ₹2.92 lakh crore and ₹2.99 lakh crore, avoiding the ₹3 lakh crore threshold.

Revenue Collections Show Mixed Performance

Telangana’s revenue receipts in 2024-25 also indicated strain. By December 2024, the total revenue receipts stood at ₹1,12,307.30 crore—just 50.76% of the budgeted ₹2,21,242.23 crore and lower than the 57.72% recorded in the same period of 2023.

Tax revenue, however, crossed ₹1 lakh crore, reaching ₹1,02,047.98 crore—62.07% of the targeted ₹1,64,397.64 crore. This marked a slight decline from the 65.37% collection rate in the previous year. GST collections stood at ₹37,664.91 crore (64.28% of the target), while stamp duty collections dropped to ₹7,524.42 crore, down from ₹9,524.19 crore in November.

On a positive note, sales tax collections saw a notable increase, reaching ₹24,035.11 crore (71.86% of the target), surpassing last year’s performance. However, excise duty collections were lower at ₹14,078.39 crore, covering only 54.96% of the ₹25,617.53 crore target.

Non-tax revenue showed a significant drop, totaling just ₹5,487.88 crore—only 15.59% of the projected ₹35,208.44 crore, compared to 89.14% in 2023. Meanwhile, capital receipts performed relatively well, standing at ₹48,210.81 crore—91.28% of the ₹52,815.41 crore target, slightly better than the previous year.