A recent report by the Comptroller and Auditor General of India (CAG) has brought to light a concerning trend in Telangana’s financial management under the previous Bharat Rashtra Samithi (BRS) government. The report indicates that the State government spent a mere ₹2,550 crore on upgrading educational infrastructure over almost a decade since the State’s formation.
This figure represents only a tiny fraction of the total ₹2.55 lakh crore in capital expenditure (Capex) incurred by the State from its inception in 2014 through the end of the financial year 2022-23.
The ‘State Finances 2022-23’ publication, a first-of-its-kind detailed analysis of financial conduct across Indian states between 2014 and 2023, meticulously outlines the spending priorities of various state governments. For Telangana, the study highlighted that a paltry ₹6,496 crore was allocated to the health sector, another vital human development indicator, during the BRS regime.
The report further detailed that Telangana’s revenue expenditure, which covers operational costs like maintenance, repairs, and daily administrative expenses including salaries, amounted to a staggering ₹9.12 lakh crore. In stark contrast, the capital expenditure – funds designated for acquiring permanent assets and enhancing existing infrastructure – stood at ₹2.55 lakh crore.
While Telangana showcased commendable performance in generating its own tax and non-tax revenues over the years, the CAG data suggests the State faced significant financial challenges during the same period.
A substantial portion of the ₹2.55 lakh crore Capex, specifically ₹1.03 lakh crore, was channeled into Irrigation and Flood Control, primarily for the much-publicized Kaleshwaram project. However, the project’s future has become uncertain following the reported sinking of Medigadda barrage piers and the development of cracks in other barrages like Annaram and Sundilla. This focus on Kaleshwaram seemingly led to the neglect of other critical projects such as the Palamuru-Rangareddy and Sitarama lift irrigation schemes, which are of paramount importance to the State.
Another significant expenditure area was water and sanitation, where ₹38,639 crore was spent, largely driven by the Mission Bhagiratha scheme aimed at providing drinking water to all households. According to official sources, the allocation patterns for these indicators hint at a state of financial mismanagement, where budgetary discipline was largely absent, and funds were predominantly consumed by salaries, wasteful spending, debt servicing, and interest payments.
Housing, an essential sector, also saw minimal investment, with only ₹13,000 crore spent over nine years, despite extensive public promotions for the two-bedroom housing scheme. The CAG’s report quantifies this minimal spending.
The report ultimately concludes that 85% of the State’s expenditure was directed towards revenue expenses like salaries, subsidies, and welfare programs, rather than the creation of new assets. To fund its activities, the government heavily relied on its own tax revenues, mining operations, and the sale of valuable land parcels.