CAG report: Telangana revenue crosses ₹1.22L Cr, expenditure ₹1.11L Cr, thanks to borrowings, moderate tax collections

Hyderabad: Telangana’s fiscal performance in the first half of the ongoing financial year (April–September 2025) has shown a notable rise in both revenue and expenditure, largely driven by increased borrowings and moderate tax collections.

This was disclosed in the latest audit report released by the Comptroller and Auditor General (CAG) of India.

Revenue crosses Rs 1.22 Lakh Crore mark

The report revealed that the state’s total income during the first six months of FY 2025–26 stood at Rs 1.22 lakh crore, compared to Rs 1.08 lakh crore during the same period last year, an increase of Rs 14,000 crore.

While tax revenue rose by Rs 2,913 crore, the state also raised additional borrowings worth Rs 12,626 crore, which significantly boosted overall receipts.

Expenditure touches Rs 1.11 Lakh Crore

The state’s expenditure increased in line with the rise in receipts. CAG noted that total spending reached Rs 1.11 lakh crore, up from Rs 1.01 lakh crore in the first half of the previous fiscal year.

A major portion of this expenditure went toward employee salaries, pensions for retired staff, interest payments, and repayment of principal loans. The report highlighted that 40.97% of the annual budgeted revenue target (Rs 71,836 crore) was spent in just six months.

Borrowings drive fiscal expansion

While the state budget had set a revenue target of Rs 1.75 lakh crore for the full fiscal year, only a little over 40% of that has been achieved by mid-year. To bridge the gap, the government has relied heavily on borrowings, which have grown substantially compared to last year.

The CAG pointed out that the fiscal deficit widened to Rs 45,139 crore, indicating that the state has been using fresh loans to meet expenditure commitments.

Revenue surplus turns into deficit

The state budget had projected a revenue surplus of Rs 2,738 crore for FY 2025–26. However, the CAG report shows that the situation has reversed, with the state posting a revenue deficit of Rs 12,452 crore in the first half itself.

This represents a negative deviation of 454%, underscoring the growing fiscal strain and dependence on debt to finance spending.

Capital expenditure on the rise

On a positive note, the report observed a sharp increase in capital expenditure, suggesting that the government is prioritizing development and infrastructure projects.

However, the CAG cautioned that without a stronger growth in tax collections, the state’s financial stability may face continued pressure in the latter half of the fiscal year.