White paper on Telangana State Finances exposes several facts

(Political Bureau)

Hyderabad: Excerpts from the white paper, which was tabled in the Telangana state legislative assembly by the state government.

After 10 years of the previous government rule, a situation has come that the debt burden including the off-budget borrowings of the state has become enormous.

This has created distress on the fiscal front. The present white paper is an attempt to give a clear picture as to where the state finances stand as of December 2023.

The paper aims to present in a simple and easily understandable language – the financial position of the state, as inherited by the present government. The objective is to foster public debate, informed by facts, so that the state finances are managed in a fiscally responsible and prudent manner.

The percentage share of actual expenditure in the overall budget estimates, however, is worrisome. Actual expenditure as a percentage of Budget estimates was at its lowest level (61.9%) in FY 2014-15. In the period between 2014-23, on average, Telangana actually spent only 82.3% of the budgeted expenditure.

However, the current state of affairs reveals a significant escalation in debt. Presently, the state’s standalone debt has surged to ₹3,89,673 crores, and when considering the debt of the special purpose vehicles (SPVs) serviced by the Government, the actual debt rises to ₹5,16,881 crores. Furthermore, incorporating contingent liabilities guaranteed by the government, the total debt skyrockets to ₹6,12,343 crores.

Telangana’s performance in terms of the revenue receipts-to-GSDP ratio in comparison with other General States was less than satisfactory in FY 2021-22. At 11.3%, its receipts-to-GSDP ratio was 3.3 percentage points lower than the India General States average (14.6%). Only five other states had lower revenue receipts-to-GSDP ratios than Telangana in FY 2021-22.