Hyderabad: Telangana revenue deficit reached Rs. 14,840.81 crore in five months, according to the August report of the Comptroller and Auditor General (CAG).
The report showed that revenue collections remained below expenditure during the period. Meanwhile, the state’s net borrowings reached Rs. 34,285.21 crore by August.
The Telangana government had estimated total revenue collections of Rs. 2,41,263.59 crore for 2026-27. By August, the state had collected Rs. 77,535.89 crore, or 32.14 percent of the annual estimate.
In contrast, net borrowings reached Rs. 34,285.21 crore against the annual estimate of Rs. 58,458.71 crore. Therefore, 58.65 percent of the annual net borrowing target had already been reached within five months.
Capital receipts stood at Rs. 34,304.66 crore by August. Almost the entire amount, Rs. 34,285.21 crore, represented net borrowings during the period.
The CAG report also highlighted pressure on the revenue account. Revenue receipts stood at Rs. 77,535.89 crore, while revenue expenditure reached Rs. 92,376.70 crore.
As a result, the state recorded a Telangana revenue deficit of Rs. 14,840.81 crore. The revenue deficit stood at -216.41 percent compared with the surplus of Rs. 6,857.76 crore projected in the annual budget.
Tax collections formed the largest component of the state’s revenue during the period. Tax revenue reached Rs. 69,097.42 crore by August.
This represented 38.10 percent of the annual tax revenue estimate of Rs. 1,81,367.39 crore. GST collections stood at Rs. 24,750.77 crore during the five-month period.
Stamp duties and registrations contributed Rs. 7,574.79 crore. Sales tax collections stood at Rs. 15,779.59 crore, while excise revenue reached Rs. 8,535.24 crore.
The state’s share in central taxes was recorded at Rs. 8,945.85 crore. Compared with the same period last year, the report showed a change from 40.32 percent to 37.11 percent against the budget target.
Non-tax revenue also remained below its annual estimate. The government had projected Rs. 35,730.20 crore from non-tax sources.
However, collections from this category stood at only Rs. 5,475.65 crore by August. This represented 15.32 percent of the annual estimate, although collections had risen from Rs. 1,578.44 crore during the same period last year.
Telangana revenue deficit puts pressure on spending
The state had budgeted Rs. 47,267.28 crore for capital expenditure during 2026-27. By August, it had spent Rs. 12,412.53 crore, accounting for 26.26 percent of the allocation.
Capital account expenditure excluding salaries stood at Rs. 12,039.04 crore. The corresponding annual budget estimate was Rs. 46,308.85 crore.
Capital expenditure during the same period last year stood at Rs. 13,921.18 crore. The figures therefore showed lower capital spending compared with the previous year.
The report noted the significance of this trend as revenue requirements, interest payments and pensions continued to place pressure on government finances. Capital spending covers infrastructure and asset creation, but expenditure remained below the annual budget provision.
Another indicator highlighted in the report was the primary deficit. By August, the primary deficit stood at Rs. 21,110.73 crore.
The 2026-27 budget had estimated the primary deficit at Rs. 37,154.32 crore. The August figure represented 56.82 percent of that annual estimate within five months.
The CAG also stated that details relating to funds raised by public sector undertakings, government guarantees and the public account had not been received from the state government.
The report separately presented total revenue and expenditure figures. Revenue stood at Rs. 1,11,840.55 crore, while expenditure was recorded at Rs. 1,04,789.23 crore.
At first glance, the total expenditure figure was lower than total revenue. However, those figures included capital receipts and debt-related components.
Therefore, the difference between total revenue and expenditure did not by itself reflect the position of the revenue account. The pressure became clearer when only revenue receipts and revenue expenditure were considered.
The state’s revenue receipts reached Rs. 77,535.89 crore by August. Revenue expenditure, meanwhile, climbed to Rs. 92,376.70 crore.
This meant revenue receipts had reached 32.14 percent of the annual estimate. Revenue expenditure, however, had already reached 39.41 percent of its annual budget provision.
The CAG report pointed to this gap while detailing the state’s financial position. The figures showed that expenditure on the revenue account was running ahead of corresponding receipts.
Pension expenditure added further pressure to the revenue account. The government had allocated Rs. 14,736.56 crore for pensions in the 2026-27 budget.
By August, pension spending had already reached Rs. 12,487.73 crore. That represented 84.74 percent of the annual pension allocation within five months.
The corresponding proportion during the same period last year was 58.75 percent. The CAG report therefore highlighted the additional financial pressure that pension payments could create during the remaining months.
The revenue position also differed sharply from the annual budget projection. The state budget had projected a revenue surplus of Rs. 6,857.76 crore for 2026-27.
However, revenue receipts fell below revenue expenditure by August. The resulting Telangana revenue deficit stood at Rs. 14,840.81 crore.
At the same time, the government had already used 58.65 percent of its annual net borrowing target. The combination of the revenue gap and borrowing figures formed a key part of the CAG’s assessment.
The report also showed that tax revenue had increased compared with the previous year in some areas. However, the available collections remained below the levels required to meet the annual budget estimates.
Non-tax revenue likewise remained significantly below its annual target. The state would need higher collections during the remaining months to achieve the budgeted revenue figures.
The CAG figures covered the first five months of the 2026-27 financial year through August. They provided a snapshot of revenue collection, expenditure, borrowing and fiscal indicators during that period.
The report also recorded the continued burden of pensions and interest-related payments. Meanwhile, capital expenditure remained below the annual allocation despite the state’s infrastructure and asset-creation requirements.