Hyderabad, March 31, 2026: The Comptroller and Auditor General of India has raised serious concerns over the fiscal health of Telangana, highlighting widening gaps between budget estimates and actual spending, rising debt levels, declining revenues, and underutilisation of funds across key sectors.
The findings are part of the CAG report for 2024–25, tabled in the State Assembly on Monday.
Political Reactions to CAG Findings
Reacting to the report, T. Harish Rao, Deputy Leader of the BRS Legislature Party, said the findings expose a growing mismatch between policy intent and execution under the Congress government. He alleged deterioration in fiscal discipline and termed the report an “eye-opener.”
Budget vs Actual Spending Gap Widens
The CAG noted a significant gap between budget estimates and actual expenditure:
- Budget Estimate (2024–25): ₹2,21,242 crore
- Actual Expenditure: ₹1,67,804 crore (76%)
Revenue expenditure also fell short:
- Projected: ₹2,20,945 crore
- Actual: ₹1,77,224 crore (80%)
Revenue Deficit Replaces Surplus
The State witnessed a sharp reversal in its fiscal position:
- Revenue Deficit (2024–25): ₹9,420 crore
- Revenue Surplus (2023–24): ₹779 crore
This shift has raised concerns about fiscal sustainability.
Unplanned and Excess Spending
The report highlighted:
- Additional expenditure: ₹31,229 crore beyond budget provisions
- Revenue overspending of ₹10,525 crore (21% higher than budgeted)
This points to weak expenditure controls and poor fiscal discipline.
Debt Levels Breach FRBM Limits
Telangana breached targets under the Fiscal Responsibility and Budget Management Act:
- Debt-to-GSDP ratio: 34.29% (limit: 32.80%)
- Total outstanding debt: ₹5,62,662 crore
- Borrowings increased from ₹38,334 crore (2023–24) to ₹56,209 crore (2024–25)
Limited Asset Creation Despite Borrowing
Out of total borrowings:
- Only ₹36,072 crore was used for capital expenditure
The CAG noted that rising debt is not translating into productive infrastructure or long-term economic benefits.
Decline in Revenue Collections
Despite higher central tax devolution:
- From ₹23,742 crore to ₹27,050 crore
Overall revenue receipts declined:
- From ₹1,11,798 crore to ₹1,09,233 crore
Key state tax revenues dropped:
- Stamps & Registration: ₹14,296 crore → ₹8,473 crore
- Vehicle Tax: ₹7,095 crore → ₹6,992 crore
Economic Growth Falls Short
- Actual GSDP Growth: 9%
- Projected Growth: 10.6%
The shortfall indicates slower-than-expected economic expansion.
Underutilisation of Funds Across Sectors
Significant funds remained unspent, including:
- ₹4,054 crore for irrigation projects like Palamuru-Rangareddy and Kaleshwaram Lift Irrigation Scheme
- ₹1,386 crore for urban water and sanitation
- ₹1,201 crore under Constituency Development Fund (CDF)
Social Sector Spending Lags
Welfare spending showed major gaps:
- Allocated: ₹25,971 crore
- Utilised: ₹9,721 crore (37%)
This raises concerns about delivery and implementation in social justice and welfare schemes.
