Hyderabad: Telangana’s fiscal squeeze is deepening, with the Congress government spending faster than it is earning. The State accounts have exposed a widening gap between revenue mobilisation and expenditure, even as the Congress government used more than half of its budgeted borrowing headroom by August
According to the latest CAG (Comptroller and Auditor General) audit report, revenue receipts have reached Rs 77,535.89 crore, or 32.14 per cent of the annual target of Rs 2.41 lakh crore. However, revenue expenditure climbed to Rs 92,376.70 crore, or 39.41 per cent of the annual allocation. As a result, the State is staring at a Rs 14,840.81 crore revenue deficit by August against the projected Rs 6,857.76 crore revenue surplus for the entire year.
The fiscal deficit has already touched Rs 34,285.22 crore, or 58.65 per cent of the annual estimate, with market borrowing doing much of the heavy lifting. Net borrowings and other liabilities have reached Rs 34,285.21 crore, against an annual estimate of Rs 58,458.71 crore.
Interest payments have already consumed 61.84 per cent of the annual allocation, at Rs 13,174.49 crore. Pension expenditure has reached Rs 12,487.73 crore, or 84.74 per cent of the full-year provision. Subsidies have consumed 51.24 per cent of their annual allocation, while salaries and wages have accounted for 44.54 per cent of budgetary allotments. With pressure from recurring expenditure building rapidly, alarm bells are ringing for the State finances.
Capital expenditure provides another warning sign. The State has spent Rs 12,412.53 crore, or just 26.26 per cent of its Rs 47,267.28 crore annual capital allocation. During the corresponding period last year, capital expenditure reached 39.28 per cent of the annual provision.
Meanwhile, tax revenue performed relatively better, reaching Rs 69,097.42 crore, or 38.10 per cent of the annual target. GST collections stood at Rs 24,750.77 crore and sales tax at Rs 15,779.59 crore. But non-tax revenue remains particularly weak. Only Rs 5,475.65 crore, or 15.32 per cent of the annual target, has been realised.
Total expenditure, including both revenue and capital expenditure, has reached Rs 1,04,789.23 crore, realising 37.20 per cent of the annual estimate.
The August accounts thus leave the Congress government with a difficult fiscal equation. Revenue is lagging behind expenditure. Debt servicing and other committed bills are consuming substantial resources. Borrowings are already well past the halfway mark of the annual target.
Telangana Finances – August snapshot
