Telangana falls short of funds for expenditure as only 34% of projected revenue receipts realised by end of second quarter

Tax revenue during first half was at ₹68,905 crore, 41.91% of the quantum projected for the year  

Poor run of Telangana’s revenue receipts continued at the end of the first half of the current financial year (2024-25).

The overall revenue receipts at the end of September stood at ₹75,454 crore, just 34.1 % of the ₹2.21 lakh crore projected for the FY in the budget estimates. Tax revenues were a shade better at ₹68,905 crore marking 41.91% of the ₹1.64 lakh crore of the budget estimates. Revenue through sales tax was ₹16,081 crore, 48.08% of the ₹33,449 crore projected in the budget estimates. Except this (revenue through sales tax), which is close to 50% of the projection, collections through all the other sectors remained around 40% at the end of the September quarter.

What are Revenue receipts?

Revenue receipts is income a State receives from tax and non-tax sources. This is an important source for the State’s expenditures including on welfare schemes.

Non-tax revenue and grants in aid and contributions continued to be much lower than expected at ₹4,101 crore and ₹2,447 crore respectively. This is against ₹35,208 crore non tax revenue and ₹21,636 crore grants in aid and contributions estimated in the budget for the current fiscal. Borrowings and other liabilities at the end of September remained much higher at ₹32,536 crore, 66.06% of the ₹49,255 crore projected in the budget estimates.

The impact

Less than the projected revenue receipts means the State does not have enough funds to meet its expenditures. Additionally, the Union Finance Ministry has restricted the State’s borrowing limit. 

Telangana could end up paying higher interest than projected

On the expenditure side, interest payment till the second quarter accounted to ₹13,187 crore, 74.38% of ₹17,729 crore projected for the year, indicating that the State could pay higher interest than was presented in the budget estimates. Expenditure on account of salaries and wages reached ₹21,279 crore against ₹40,041 crore projected for the year while the outgo on pension payments at the end of the first half was ₹8,560 crore, 73.54% of ₹11,641 crore projected for the fiscal.

The State registered revenue deficit of ₹15,752 crore at the end of the first half as against the ₹297 crore surplus projected in the budget estimates while the fiscal deficit was pegged at ₹32,536 crore. The primary deficit at the end of the first half was ₹19,348 crore, according to the provisional figures submitted to the Comptroller and Auditor General of India.

The State continued dependence on the financial accommodation instruments provided by the Reserve Bank of India (RBI). According to the RBI bulletin, the State utilised special drawing facility on all the 31 days of August to raise ₹4,543 crore and depended on ways and means advances for 25 days taking ₹1,901 crore while it availed of the overdraft facility for 11 days to mobilise ₹746 crore.

Published - October 23, 2024 06:34 pm IST