Telangana Unveils ₹3.2 Lakh Crore Budget, Seeks Tax Devolution Reforms
HYDERABAD, March 19 – Telangana Deputy Chief Minister and Finance Minister Mallu Bhatti Vikramarka presented the state’s budget for the financial year 2025-26 on Tuesday, with an estimated outlay of ₹3.2 lakh crore, the highest since the state’s formation in 2014.
Officials acknowledged the challenge of balancing financial commitments with resource mobilization for the effective implementation of welfare schemes. The budget underscores Telangana’s push for tax devolution reforms, seeking a shift away from the current “Per Capita Income Distance” criterion to assigning 50% weightage to Gross State Domestic Product (GSDP). The state argues this would ensure a fairer allocation of resources to high-performing states.
Telangana has raised concerns over its declining share of tax devolution, which dropped from 2.437% under the 14th Finance Commission to 2.102% under the 15th Finance Commission. “Our government believes that allocating fewer funds to well-performing states is unfair and advocates for a more rational tax distribution system that incentivizes economic growth,” Bhatti Vikramarka said in his budget speech.
The budget also focuses on job creation and economic expansion through the development of industrial corridors and special economic zones (SEZs) to attract investment. “Strengthening SEZs and industrial corridors will contribute to a stable and rapidly growing economy,” the finance minister stated.
Additionally, Telangana is positioning itself to benefit from the global “China +1” strategy by attracting multinational companies seeking to diversify supply chains away from China.
The provisional data from the Comptroller and Auditor General of India showed that as of January, total receipts stood at ₹1.82 lakh crore, or 66.57% of the ₹2.74 lakh crore projected in the 2024-25 budget estimates, with two months remaining in the financial year.
