Telangana’s fiscal deficit hits 57.7% of annual target in four months: CAG

Telangana has already run up 57.7 per cent of its annual fiscal deficit target in just the first four months of 2026-27, with the state's revenue deficit widening to Rs 19,266.83 crore amid sluggish revenue mobilisation and rising recurring expenditure, according to the latest CAG report.

The state recorded a fiscal deficit of Rs 33,729.98 crore by July against the full-year estimate of Rs 58,458.71 crore. Net borrowings and other liabilities also stood at Rs 33,729.98 crore, underscoring the growing reliance on debt to bridge the gap between expenditure and receipts.

Revenue receipts during April-July stood at Rs 59,642.62 crore, or 24.72 per cent of the annual estimate of Rs 2.41 lakh crore, while revenue expenditure reached Rs 78,909.45 crore, accounting for 33.66 per cent of the budgeted Rs 2.34 lakh crore.

Recurring commitments are adding to the pressure, with salary and wage expenditure touching Rs 17,874.35 crore. Pension payments stood at Rs 10,492.35 crore, already 71.2 per cent of the annual provision of Rs 14,736.56 crore.

Interest payments amounted to Rs 10,532.36 crore, while subsidies accounted for Rs 7,870.31 crore, or 43.47 per cent of the annual allocation.

Revenue mobilisation has lagged behind expenditure. Tax revenue stood at Rs 53,004.40 crore, or 29.22 per cent of the annual target, including GST collections of Rs 19,103.55 crore and sales tax revenue of Rs 12,584.59 crore. Non-tax revenue was only Rs 4,274.55 crore, 11.96 per cent of the annual estimate.

There was some improvement on the development spending front, with capital expenditure rising to Rs 9,272.65 crore, or 19.62 per cent of the annual allocation. Capital expenditure excluding salaries increased by more than 57 per cent to Rs 8,968.62 crore from Rs 5,695.39 crore a year earlier.

The monthly accounts also said details on state guarantees as of July 31 and borrowings from the Public Account had not been received from the state government.

Loans and advances disbursed during April-July stood at Rs 5,205.95 crore, down from Rs 6,132.45 crore in the corresponding period last year.

The figures leave the state with a narrowing fiscal space if revenue collections fail to accelerate while pensions, interest payments, subsidies and other recurring commitments continue to rise.

(With inputs from PTI)