The State government has spent 12.74% of its total expenditure on payment of interest for borrowings and other liabilities during 2024-25.
Telangana is ranked among 11 States which spent more than 10% of their respective expenditure on interest payments, according to the Comptroller and Auditor General of India (CAG). This indicates relatively higher debt servicing requirements, as interest payments were higher than pension payments and next only to salaries, constituting the committed expenditure of the State. Higher interest payments expose the pressure on State finances owing to borrowings by the previous government.
In the current fiscal too, the State had incurred ₹4,658 crore on interest payment, ₹8,324 crore on salaries and ₹4,758 crore on payment of pensions in the first two months, indicating that expenditure on account of interest payment would be around the ₹25,000-crore mark. The State remitted interest payment of €₹29,679 crore last fiscal, much higher than the ₹19,369 crore projected in the Budget.
The pressure due to interest payment as a major component of expenditure can be seen from the fact that the State had to rely heavily on ways and means advances from the Reserve Bank of India (RBI). According to the report, Telangana, along with Rajasthan and Andhra Pradesh, availed 62% of the total WMA, the temporary advances provided by the RBI to help in managing short term mismatches between receipts and payments, with dependence on the financial accommodation instrument for 363 of the 365 days in the year.
According to the CAG report on State Finances 2024-25, Telangana was among the seven States with its Own Tax Revenues in excess of 60%. It was among the top in non-tax revenues of ₹16,772 crore, 71% of the non-tax revenues received from the sale of land and property and miscellaneous other reports. The State, however, reported revenue deficit during the year as receipts constituted about 90% of the revenue expenditure.
Published – July 12, 2026 07:25 pm IST
