TG stares at 28% debt of GSDP

Hyderabad: Telangana’s state debt is projected to reach an all-time high in a single year, as the government plans to borrow nearly Rs 1 lakh crore in the 2025-26 financial year. According to the Fiscal Responsibility and Budget Management (FRBM) Act, the projected debt will constitute 28.1% of the state's Gross State Domestic Product (GSDP). In previous years, the debt remained below 28% of the GSDP.

Presenting the 2025-26 budget in the Assembly on Wednesday, Finance Minister Mallu Bhatti Vikramarka announced that the current total open market loans of Rs 4.07 lakh crore are expected to rise to Rs 5.04 lakh crore in the next financial year.

For the 2024-25 financial year, the government projected borrowing of nearly Rs 93,000 crore, but the debt has already surpassed Rs 1 lakh crore. In the upcoming financial year, the total debt is expected to exceed Rs 1.20 lakh crore. The public debt outstanding under FRBM loans is set to increase to 28.1% of the GSDP, marking the highest percentage in the state's economic history over the last 12 years.

The state government has proposed to seek Rs 23,700 crore from the central government, Rs 11,200 crore in loans from autonomous bodies, Rs 21,700 crore from special securities, and Rs 41,000 crore from reserve funds and deposits in the 2025 financial year.

Officials stated that Telangana requires substantial funds to implement cost-intensive welfare schemes and major development projects, including the construction of Young India Residential Educational Institutions, urban development initiatives, and repayment of debts and interest on loans taken by the previous government. With no possibility of reducing expenditure on welfare schemes and debt servicing, the state is expected to face a continuously increasing debt burden.