Telangana Budget 2025 Live Updates: Deputy CM Mallu Bhatti Vikramarka presents Rs 3.05 lakh crore budget in assembly

Presenting the state budget, Telangana Finance Minister and Deputy CM Bhatti Vikramarka Mallu announced the government's ambitious vision to transform Hyderabad into a global city of international standards. "We are developing a master plan to transform Hyderabad into a global city of international standards, focusing on technological advancement, transportation expansion, infrastructure development, and environmental conservation. As a part of this vision, we have launched the Musi Riverfront Development Project to make Hyderabad a pollution-free city," he stated.

He further added that "To establish Telangana as a leader in modern technology, clean energy, and sustainable development, we have formulated the 'Mega Master Plan 2050'." The plan aims to position the state at the forefront of innovation and sustainability through strategic infrastructure and technological advancements.

The Telangana 2025-26 budget proposes the following allocations for welfare departments:

• Rs 40,232 crore for the Scheduled Castes Welfare Department
• Rs 17,169 crore for the Scheduled Tribes Welfare Department
• Rs 11,405 crore for the Backward Classes Welfare Department
• Rs 3,591 crore for the Minority Welfare Department
• Rs 2,862 crore for the Women and Child Welfare Department

KEY HIGHLIGHTS:

• The Telangana government is developing a Future City across 765 sq km, with the creation of the Future City Development Authority to oversee its growth.
• As part of this plan, an Artificial Intelligence (AI) City will be established on 200 acres within the Future City. It is envisioned to become a global hub for AI startups and technology firms, fostering innovation and attracting investments.
• Tech giant Google has committed to setting up an AI-powered accelerated centre in the AI City, further boosting Telangana's position as a leader in emerging technologies.

KEY HIGHLIGHTS:

• The Telangana government has proposed Rs 17,677 crore for the Municipal Administration Department in the 2025-26 budget, prioritizing major infrastructure projects.
• As part of the HICITI initiative, the government is undertaking the construction of 31 flyovers and 17 underpasses at a cost of Rs 7,032 crore to ease traffic congestion and improve urban mobility.
• Additionally, the ORR Phase II water supply scheme is being implemented with an outlay of Rs 5,942 crore to enhance water distribution across key areas.
• The state is also developing a Future City spanning 765 sq km, with the establishment of the Future City Development Authority to oversee and regulate its growth.

As Telangana prepares for its upcoming budget presentation, mounting debt concerns have taken center stage. The state is grappling with a significant shortfall between budget estimates and actual revenue, raising questions about fiscal stability. From 2015-16 to 2022-23, Telangana, along with Andhra Pradesh, recorded the largest gaps between forecasted and realised revenue.

On average, Telangana collected 21% less income than initially projected in its budget over the past eight years. The state’s revenue realisation consistently fell short of the budget estimates, indicating an overestimation in financial forecasting. In 2023, for instance, while the total proposed budget was ?2.45 lakh crore, the actual revenue collection amounted to only ?1.92 lakh crore—21% lower than expected.

Alongside revenue shortfalls, Telangana also underspent its budget by 17% during the same period. The state consistently spent less than its original budgeted allocations, impacting the execution of planned development projects. This underspending is notably higher than the national average, where most states typically spend around 10% less than their budget estimates.

A state budget comprises three key financial figures: Budget estimates, revised estimates, and actuals. Budget estimates outline the projected income and expenditure for the year, while revised estimates reflect mid-year adjustments based on ongoing financial transactions. Actuals represent the final audited figures. The persistent gap between these figures in Telangana raises concerns about the accuracy and reliability of the proposed budget.

To bridge the revenue shortfall, Telangana may need to borrow additional funds. However, borrowing capacity is restricted by the state’s Fiscal Responsibility and Budget Management (FRBM) regulations and central government-imposed borrowing limits. If borrowing fails to cover the deficit, the state may be forced to curtail spending further, affecting key development initiatives.

A significant portion of Telangana's budget is allocated to committed expenditures, such as salaries, pensions, and interest payments. In 2024-25, the state budgeted 27% of its revenue receipts for salaries, 13% for pensions, and 12% for interest payments. With nearly 52% of the budget locked into fixed expenses, there is limited fiscal flexibility for developmental and welfare activities.