Telangana’s fiscal health isn’t just weak — it is in the ICU, with alarms blaring across every critical indicator. The latest CAG data (October 2025) tears apart the official narrative of a “rising Telangana,” exposing instead a state running on fumes, debt, and denial. In just seven months of FY 2025–26, the government has exhausted 94% of its annual borrowing limit, while managing to collect only 41% of its expected revenue. If this isn’t a financial emergency, what is?
Telangana was permitted to borrow ₹54,009 crore for the year. By October, it had already borrowed ₹50,541 crore.
This isn’t budget management.
This is budget vandalism.
No state should be brushing up against its borrowing cap before the halfway mark. To do so is to signal a systemic failure: poor planning, weak revenue intelligence, and an over-reliance on debt to survive day-to-day governance. If any household consumed its entire annual credit limit in seven months, the bank would call. In Telangana’s case, it is the CAG ringing the alarm bell — loudly.
Borrowing is not the enemy. Borrowing without income is.
Telangana’s revenue receipts are stuck at 41% of target. No major industrial breakthroughs. No large-scale job creation. No tax surge. Not even a meaningful policy shift to stimulate fresh investment.
In an economy, borrowing is justified only when it powers growth. Here, borrowing is merely plugging holes — a treadmill of debt that exhausts the system without moving it forward. The state is running hard, but running in place.
Between April and October, Telangana paid ₹16,500 crore merely in interest.
That money could have funded new highways, strengthened irrigation networks, upgraded hospitals, or supported welfare programs. Instead, interest payments — not development priorities — are dictating budgetary decisions. Debt has become the de facto Chief Minister.
When a state’s fiscal policy is shaped by repayment schedules rather than vision, the decline is already underway.
When a government borrows fast, earns slow, and hits its borrowing ceiling early, there is only one play left in the handbook: sell what you can.
Land auctions. Asset monetisation. Quick clearances. Fire-sale urgency.
Governments call this “resource mobilisation.” Economists call it “last-stage distress.” Citizens know it for what it is: a sign of a state struggling to stay afloat.
“Future City.”
“Musi Riverfront Revival.”
“Telangana Rising.”
Fine slogans. Attractive brochures.
But slogans cannot fund capital expenditure. They do not bring down deficits. They do not reduce interest outflows. A state cannot be rebuilt on PowerPoint presentations. It needs money — something Telangana currently doesn’t have.
The BRS era (2014–2023) famously inflated Telangana’s debt from roughly ₹75,000 crore to anywhere between ₹3–4 lakh crore, or as high as ₹7 lakh crore if off-budget liabilities are counted.
Yes, the early BRS years enjoyed strong revenue growth. But the debt curve rose faster than the income curve.
The Congress era (2023–2025) hasn’t reversed the trajectory. Instead:
- Borrowing hit ₹50,541 crore by October
- Revenues stagnated at 41%
- Interest payments choked spending flexibility
Both parties contributed, but today’s government owns today’s crisis.
The Congress government blames BRS mismanagement.
The opposition accuses Revanth of bankrupting Telangana.
The CAG, thankfully, deals only in numbers:
- Borrowings: High
- Revenues: Low
- Fiscal space: Shrinking
Yes, Telangana has not defaulted. Yes, the fiscal deficit stays within the 3% GSDP norm.
But the trend is dangerous, and the safety margin razor thin.
Revanth Reddy wants Telangana to become a $1 trillion economy by 2034. Ambition is welcome. But ambition unsupported by fiscal discipline collapses into fantasy.
To get anywhere close, Telangana needs:
- Accelerated industrial investment
- Strong and reliable revenue streams
- A shrinking debt-service ratio
- Serious capital creation
Today, none of these boxes are being ticked.
The numbers don’t lie. Telangana is not on the cusp of a great leap forward. It is drifting deeper into debt, hampered by weak revenues, and forced to consider asset sales to stay solvent.
Revanth Reddy can sell dreams.
But he cannot sell numbers.
And the numbers say one thing loud and clear:
Telangana is in a fiscal chokehold — and denial won’t save it. (The author is state BJP unit Chief Spokesperson)
