Telangana govt understates off-budget borrowings, exceeding fiscal limits

Hyderabad: The Telangana govt has understated off-budget borrowings of ₹1,20,944 crore as of March 31, 2024, by not including them in the state’s total liabilities. As a result, the state’s reported liabilities are significantly lower than their actual levels.
If these off-budget borrowings are included, the ratio of outstanding public debt and liabilities to GSDP rises to 34.47%—well above the 26.41% reported without them. This exceeds the fiscal ceiling of 33.10% set in the state’s medium term fiscal policy statement.
The state govt disclosed off-budget liabilities of ₹2,302 crore for 2023-24 in budget documents. However, this figure contradicts data from the Union ministry of finance, which lists Telangana’s off-budget borrowings for 2023-24 at ₹2,545 crore. Additionally, the state did not report information on guarantees invoked, raising concerns about its fiscal transparency.
Unspent funds
Another significant observation was the unspent funds under centrally-sponsored schemes (CSS), which are monitored through single nodal agencies. As of March 31, 2024, ₹1,812 crore remained unutilised in these agency accounts. Each CSS has a designated nodal agency with its own bank account in a scheduled commercial bank authorised by the state govt.
In 2023-24, the state govt opened 69 new budget subheads—40 under revenue, 23 under capital, and six under public account—without consulting or informing the accountant general (A&E). Under these heads, the govt allocated ₹2,231 crore (revenue) and ₹1,234 crore (capital) but ended up spending ₹2,340 crore (revenue) and ₹3,501 crore (capital), further raising concerns over fiscal management.
These financial discrepancies highlight significant gaps in Telangana’s fiscal transparency, raising alarm over the state’s financial health and governance, a financial expert said.