Telangana eyes higher market borrowings amid grant uncertainty, scheme payouts

Hyderabad: The Telangana government headed by Chief Minister A Revanth Reddy is weighing additional market borrowings in the first quarter of this financial year, as it scrambles to fund flagship welfare schemes amid uncertainty over grants and low non-tax revenue.

June 2, the state formation day, is the date set to disburse financial assistance under the Rajiv Yuva Vikasam scheme. The state has budgeted ₹6,600 crore for the programme this year, with a portion slated for Q1 release. Meanwhile, the kharif season begins in June, requiring an advance infusion under the Rythu Bharosa scheme. ₹18,000 crore has been allocated for it, half of which must reach farmers before sowing.

With non-tax revenue hit by stalled land auctions, and doubts over the timely release of central grants, the finance department is considering a more aggressive borrowing strategy. For the April–June period alone, it expects to raise over ₹16,000 crore via bond sales.

Total revenue projections for FY25 include ₹31,618 crore from non-tax sources, ₹22,782 crore in central grants, and ₹64,539 crore in new loans—adding up to ₹1.18 lakh crore. Of this, about ₹29,000 crore is expected in Q1. But so far, non-tax inflows remain weak, and grant flows remain opaque.

Last year, against an initial grant estimate of ₹21,636 crore, the revised figure was brought down to ₹19,836 crore much of which never arrived. With no windfall from land at Kanch Gachibowli due to ongoing disputes, officials have been asked to explore alternate sources.

The government has also asked departments to plug revenue gaps and boost collections. The commercial taxes department has begun tracking traders claiming Input Tax Credit (ITC), amid rising allegations of misuse and revenue leakage.