The Telangana government on March 19 presented its third Budget with ambitious welfare and development allocations amidst strained finances and a rising debt burden. The Deputy Chief Minister and Finance Minister, Mallu Bhatti Vikramarka, presented the Rs.3,04,965-crore Budget estimates for the 2025-26 fiscal. The State’s revenue expenditure for this period is estimated to be Rs.2,26,982 crore, and capital expenditure is Rs.36,504 crore.
To fulfil the Congress’ six election guarantees (barring those yet to begin), the government has allocated Rs.56,084 crore, nearly 18.4 per cent of the total Budget outlay for 2025-26. Of the six guarantees, two major promises yet to be fulfilled are the monthly financial assistance of Rs.2,500 promised to women and the increase in the Cheyutha pensions for senior citizens, widows, among others, to Rs.4,000.
The opposition Bharat Rashtra Samithi (BRS) and the BJP criticised the Congress for the delay. The guarantees are being implemented in a phased manner owing to a paucity of funds.
The Congress government proceeded with caution, increasing the total outlay by only 4.7 per cent compared with the previous Budget—unlike the usual trend in Telangana, where the increase is typically 10-15 per cent (calculations based on previous Budgets).
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Both the BRS and BJP termed the Budget a jugglery of numbers. The general discussion on the Budget commenced on March 21 in the Telangana Assembly, with former Finance Minister and BRS MLA Harish Rao alleging that Telangana had realised only 80 per cent of its estimates during the ongoing fiscal (which ends on March 31). He added that there had been a downward trend in the percentage growth of some revenue generation segments compared with the BRS term.
BJP leader and Union Minister of State for Home Affairs, Bandi Sanjay Kumar, claimed: “In the last financial year (2024-25), the Budget was presented with an outlay of Rs.2.91 lakh crore, but less than Rs.2 lakh crore was actually spent.”
Financial analysis and debt concerns
Responding to the allegations, Bhatti Vikramarka discussed revenue, debts, and expenses in the Assembly. He stated that since the Congress came to power in December 2023, State revenue was Rs.1,57,302 crore, Central aid Rs.50,032 crore, and borrowings Rs.73,299 crore—altogether Rs.2,80,633 crore.
In 16 months, the government spent Rs.2,99,414 crore. The Budget estimates for the 12 months of 2024-25 were Rs.2,91,159 crore. While the Finance Minister’s figures highlight strained finances and reliance on borrowings, they do not reveal actuals versus estimates for 2024-25, or which departments and schemes were impacted due to the shortfall.
Instances of underspending or pending schemes from 2024-25 align with the fiscal constraints the government faces. In the Budget documents, the Telangana government stated that as part of rationalising expenditure, it is “in the process of reviewing all ongoing schemes and retaining only those found to be useful to the State”.
“From 2014 to 2023, Telangana’s actual expenditure averaged 82.3 per cent of its budgeted outlay, with shortfalls exceeding 20 per cent in some years, according to the Telangana State Finances White Paper (2023).”
As the State grapples with its finances, it continues to demand a larger share from the Centre. The Telangana government sought an increase in Central tax devolution from the current 41 per cent to 50 per cent, criticising the drop in its share from 2.437 per cent (Fourteenth Finance Commission) to 2.1012 per cent (Fifteenth Finance Commission).
Faced with rising revenue needs, the government aims to raise at least Rs.20,000 crore through land sales and mortgages in 2025-26 despite criticism. Excise revenue is projected to be Rs.2,000 crore more than the previous Budget.
Despite these efforts, public debt is expected to cross Rs.5 lakh crore by the end of 2025-26, with open market borrowings alone projected at over Rs.4 lakh crore. For 2025-26, the government has estimated Rs.64,539 crore in open market borrowing.
Debt servicing has become a significant burden. The debt servicing expenditure in 2024-25 was Rs.17,729 crore, but the government had already spent more than Rs.22,000 crore by January. The 2025-26 estimate stands at Rs.19,730 crore. With salaries, fixed expenses, and debt servicing forming a significant portion of spending, the government has little leeway to address rising demands.
Are farmers really a top priority?
Bhatti Vikramarka stated that the Congress government “prioritises farmers’ welfare, ensuring both short-term and long-term support for the agricultural community”. However, budgetary allocations tell a different story.
In 2024-25, the Congress government allocated Rs.72,569 crore for the sector—approximately a fourth of the total outlay—and announced in December 2024 that Rs.57,000 crore had been spent on agriculture and farmer welfare, including Rs.20,616.89 crore to waive loans of 25.35 lakh farmers.
For 2025-26, agriculture allocations were slashed to Rs.24,439 crore as there is no farm-loan waiver component despite persistent demands to cover more farmers.
Welfare allocations and implementation challenges
“While the massive loan waiver within a single year was a creditable achievement, the grievances of farmers who are yet to receive the waiver must be addressed,” Kirankumar Vissa, co-founder of the farmers’ union Rythu Swarajya Vedika, told Frontline.
Nearly 74 per cent (Rs.18,000 crore) of the department’s Budget is earmarked for the contentious Rythu Bharosa, the investment support scheme. Implementation has been inconsistent since the Congress took office. The inclusion of tenant farmers in Rythu Bharosa was a key election promise. For the second year running, they find no mention in the Budget.
“Where the Congress government betrayed a key promise is in its failure to include tenant farmers in the Rythu Bharosa scheme,” said Vissa. Other key allocations are the paddy procurement bonus (Rs.1,800 crore) and Indiramma Athmeeya Bharosa for landless labourers (Rs.600 crore).
Farmers segregating dried turmeric at Telangana’s Nizamabad Agriculture Market yard, on February 22, 2025. Although Bhatti Vikramarka stated that the Congress government “prioritises farmers’ welfare”, budgetary allocations tell a different story.
| Photo Credit:
NAGARA GOPAL
Last year, Rs.1,200 crore was allocated for the landless labour scheme but implementation was stalled citing pending policy formulation. This year, the allocation has been slashed to Rs.600 crore, which experts deem grossly inadequate.
In 2024-25, the estimated budget for crop insurance premium under the Pradhan Mantri Fasal Bima Yojana was over Rs.980 crore, but implementation was delayed. Farmers’ groups urge the government to ensure such schemes are not ignored.
As the bulk of allocations go towards electoral guarantees, the 2025-26 Budget has paltry allocations for long-term agricultural improvements.
“The government needs to look beyond its cash-intensive electoral guarantees and invest in infrastructure, crop diversification, soil health, and ecological farming methods,” Vissa added.
Other sectors and social groups
The Telangana State Road Transport Corporation (TGSRTC) received Rs.4,305 crore. Of this, the free bus transport scheme for women accounts for Rs.3,082.53 crore.
“Occupancy and earnings have risen post-Mahalakshmi [Telangana’s women empowerment initiative], but fare revenue will not help the corporation break even. TGSRTC needs significant capital investment,” G.S.R. Chaitanya, a transport researcher, told Frontline.
The allocation for Backward Classes (BCs) stands at Rs.11,405 crore, up from Rs.9,200 crore in 2024-25. However, the Telangana Congress had promised Rs.20,000 crore per year, leaving some BC groups disappointed.
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The Scheduled Castes welfare saw the highest allocation—Rs.40,232 crore—due to unspent funds from the BRS term being carried forward. Dalit groups are demanding transparency and full implementation of promises made under the Chevella declaration.
The Minority Welfare budget is estimated at Rs.3,591 crore. However, past years have shown poor actual spending compared to allocations. “Successive governments have failed to fully implement minority welfare schemes,” said S.Q. Masood, co-founder of the Association for Socio-Economic Empowerment of the Marginalised.
The health sector received Rs.12,393 crore (around 4 per cent of the total outlay) and education Rs.23,108 crore (7.58 per cent). Activists flagged stagnant allocations despite rising demands and new announcements.
Persistent underspending
From 2014 to 2023, Telangana’s actual expenditure averaged 82.3 per cent of its budgeted outlay, with shortfalls exceeding 20 per cent in some years, according to the Telangana State Finances White Paper (2023). The 2024-25 actuals are yet to be disclosed.
The Telangana CPI(M) secretary, John Wesley, has demanded increased allocations for welfare, agriculture, education, healthcare, and housing, threatening protests if demands are not met.
Experts and activists emphasise that the gap between allocations and actual spending undermines trust, urging greater prudence and transparency from the government.
Source:https://frontline.thehindu.com/politics/telangana-budget-2025-congress-guarantees-implementation-welfare-schemes-sectoral-spending/article69361343.ece