Tue Jan 28 16:32:17 IST 2025: ## Telangana’s Fiscal Health: Strong Revenue Growth, But Debt Concerns Remain
**Hyderabad, January 28, 2025** – The NITI Aayog’s Fiscal Health Index (FHI) 2025 report reveals a mixed picture of Telangana’s fiscal health. While the state boasts strong revenue growth, a significant portion of its resources are being allocated to debt servicing, raising concerns.
The report, released in New Delhi, highlights a 73% increase in debt and interest payments from ₹12,586 crore in 2018-19 to ₹21,821 crore in 2022-23. This constitutes a substantial share of the state’s revenue expenditure. Despite this, Telangana achieved a revenue surplus in 2022-23 after three consecutive years of deficits and met its Fiscal Responsibility and Budget Management (FRBM) targets.
While the ratio of outstanding public debt to GSDP has decreased in the last two years, reaching 27.2% in 2022-23, the growth rate of outstanding public debt remained high between 11.9% and 19.1% over the past five years. The report notes that the state’s fiscal deficit target was 5% of GSDP, but it recorded a lower deficit of 2.48% in 2022-23.
The NITI Aayog recommends that Telangana increase capital expenditure, particularly in the social sectors of health and education. The report points out that the state allocates a lower percentage of its total expenditure to these sectors compared to other major states. Health spending as a percentage of total expenditure fell from 4.67% in 2018-19 to 4.57% in 2022-23, while capital expenditure (Capex) as a share of total expenditure declined from 17.6% to 9.3% during the same period.
First Piper 