Telengana Chief Minister A Revanth ReddyPhoto | Express
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The budget document of any government indicates, at a glance, whether the direction it’s headed in is realistic. In that sense, Telangana Deputy Chief Minister Mallu Bhatti Vikramarka’s budget for 2025-26 is tinged with a cautious optimism. Though it’s the first Telangana budget to cross the ₹3-lakh-crore mark, the FM has stretched it only by about ₹15,000 crore compared to the last fiscal. Despite a plethora of welfare schemes, the fiscal deficit is pegged at ₹54,000 crore. If the actual numbers at the end of the year land close to the estimates, Bhatti will have done a fine balancing act.
The lion’s share of ₹1.04 lakh crore went to the Congress’s six guarantees and other welfare schemes. Capital expenditure has been pegged at ₹36,504 crore, including over ₹10,000 crore for Hyderabad and a proposed fourth large city. The emphasis on accelerating and spreading out industrialisation, and the Mega Masterplan 2050 for it must be appreciated. It’s imperative for Telangana to not solely focus on Hyderabad. Only 22.5 percent of its workforce is engaged in the industrial sector, while 42.7 percent works in agriculture; the services sector including IT remains the main contributor, employing 34.8 percent of the workforce. Seen in this perspective, the state’s high per capita income isn’t a real barometer to assess the demography’s economic strength. While welfare schemes surely do empower, a long-term plan is also needed. Besides, the artificial intelligence revolution might prove disruptive for both the services and industrial sectors sometime soon.
Hence, the government’s focus on a proposed AI City, upgrading skills and industrialisation is as important as its welfare schemes. The main challenge is to ensure seamless transition to the age of AI in all sectors including agriculture. One big hurdle will be a shortage of funds. While the state will have to mobilise funds without getting into a debt trap—with the outstanding debt at over ₹5 lakh crore—the onus will also be on the Centre. As Bhatti rightly pointed out, Telangana’s share in the central pool of taxes decreased from 2.43 to 2.1 percent under the 15th Finance Commission. His call for rational tax devolution that does not punish performing states must be debated.
