The Congress Government in Telangana has allocated about one-third of the Budget lay of ₹2.91 lakh crore for the year 2024-25 on agriculture and irrigation. While agriculture gets ₹49,383 crore and irrigation gets ₹22,301 crore.
A bulk of the outlay for agriculture would go for the farm loan waiver. Earlier this month, the State government released ₹6,000 crore to clear the loan arrears (up to ₹1 lakh each) of 11 lakh farmers. The government said it is in the process of mobilising funds to waive the remaining loan arrears of ₹25,000 crore.
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Hyderabad, which has been the main growth engine for the State, too gets prominence, with the Government proposing a ₹10,000-crore plan to spruce up the capital city. The Government also proposed to expand the Metro Rail network by 78.4 km with an outlay of ₹24,042 crore. As part of the plan, the Metro will be extended to the Old City and will connect to Shamshabad Airport.
Presenting the State’s full budget for 204-25 in the Assembly on Thursday, Deputy Chief Minister and Finance Minister said that the allocation of a lion’s share of funds to primary agriculture was aimed at increasing the financial condition of the farming community, who constituted 47 per cent of the State’s population.
“About 47 per cent of our population is dependent on agriculture for their livelihood. But the contribution of Agricultural and Allied Sectors to the state economy is only 15 per cent. The increase in the share of this sector in the economy will lead to the economic strengthening of the farmer,” he said.
Launching a scathing attack on the erstwhile Bharat Rashtra Samithi (BRS) Government, the Finance Minister alleged that the previous government’s decisions had pushed the State’s financial condition to a precarious condition.
“The State’s debts which were at ₹75,577 crore at the time of state formation grew by leaps and bounds in 10 years and reached to ₹6.71 lakh crore. However, there was no commensurate development,” he said.
“The substantial rise in debt relative to income growth suggests a heavy dependence on borrowing to fund expenditures, potentially endangering fiscal sustainability. The persistent rise in debt far outstripping income gains suggests that without stringent fiscal reforms, Telangana’s economic health could be at risk. This necessitates measures to balance expenditure with revenue generation and reduce dependence on borrowing,” the Minister said.
In February, the Finance Minister presented a vote-on-account budget with an outlay of ₹2.76 lakh crore. Of the ₹2.91-lakh crore budget for 2024-25, revenue expenditure is pegged at ₹2.20 lakh crore and capital expenditure at ₹33,487 crore, an increase of ₹4,000 crore over the number proposed in the vote-on-account budget.
Macroeconomic scenario
The Finance Minister said the global economy has recorded a growth rate of 3.2 per cent. during the year 2023-24, while the Indian economy has recorded a growth rate of 7.6 per cent and Telangana recorded a growth rate of 7.4 per cent during the period. The State’s growth rate is less than that of the national growth rate,” he said.
At current prices Telangana’s Gross State Domestic Product (GSDP) in 2023-24 is ₹14.63 lakh crore, which is 11.9 per cent higher than the previous year.
Income disparities
The Minister said there was a widespread disparity in terms of income distribution in the State. Though the State’s per capita income stood at ₹3.47 lakh in in 2023-24, far surpassing the national average of ₹1.83 lakh, the wealth was not equally spread out.
Citing an example, he said the per capita income of Ranga Reddy district is ₹9.46 lakh, Vikarabad, an adjacent district, reports only ₹1.80 lakh, which is lower than the national average.
While the services sector has contributed 65.7 per cent to the Gross State Value Added (GSVA), the industrial sector chipped in 18.5 per cent, and the agriculture and allied sector 15.8 per cent
The key allocations in the budget include ₹11,468 crore for medical and Health; ₹9,200 crore for BC welfare; ₹3,836 crore for the Civil Supplies Department; ₹2,762 crore for industries; ₹1,500 cr for the Musi River Front project; and ₹774 crore for information and technology.
