HYDERABAD: The Telangana government maintained the mandatory minimum daily cash balance on just two days in the entire 2024-25 financial year, the Comptroller and Auditor General (CAG) has said, pointing to a severe liquidity crunch and weak cash flows, with the state relying heavily on overdraft (OD) and Ways and Means Advances during the year.
“Without resorting to Special Drawing Facility, Ways and Means Advance and Overdraft from Reserve Bank of India, the state government maintained the minimum cash balance with the bank on two days from 1 April 2024 to 31 March 2025,” the Finance Accounts report for 2024-25 of the CAG, tabled in the Legislative Assembly on Monday, stated.
Under an agreement with the Reserve Bank of India, the state government has to maintain a minimum cash balance of Rs 1.38 crore with the bank. If the balance falls below the agreed minimum on any day, the deficiency is made good by availing Special Drawing Facility (previously known as Special Ways and Means Advances), Ways and Means Advances, or overdraft from time to time.
The CAG stated that during 2024-25, the state government availed Special Drawing Facility of Rs 27,730 crore for 363 days and Ways and Means Advances of Rs 64,188 crore for 298 days. The unpaid amount towards Ways and Means Advances stood at Rs 5,842 crore at the end of the year.
“Overdraft is taken from the Reserve Bank of India when the cash balance falls below the prescribed limit of 1.38 crore, even after availing Ways and Means Advances or Special Drawing Facility. During 2024–25, the Telangana government availed overdraft of Rs 37,457 crore for 123 days,” the CAG said.
The CAG also said the state had a revenue deficit of Rs 9,420 crore and a fiscal deficit of Rs 48,922 crore as on 31 March 2025, met through borrowings and liabilities, including Public Debt (Rs 46,370 crore), Contingency Fund (Rs 1 crore), Public Account (Rs 2,558 crore) and cash balance (Rs 7 crore). About 45% of revenue receipts (Rs 1,67,804 crore) was spent on committed expenditure such as salaries (Rs 30,277 crore), interest payments (Rs 27,803 crore) and pensions (Rs 16,942 crore). SDF limit stood at Rs 4,966.69 crore and WMA limit at Rs 2,407 crore as on 31 March 2025.
Cash balances from 1 April 2024 to 31 March 2025
Number of days on which the minimum balance was maintained without taking any advance — 2
Number of days on which the minimum balance was maintained by taking SDF alone — 65
Number of days on which the minimum balance was maintained by taking Ways and Means Advances after exhausting Special Drawing Facility — 175
Number of days on which there was shortfall in minimum balance even after taking the above advances, but no overdraft was taken — Nil
Number of days on which overdrafts were taken after exhausting both SDF and Ways and Means Advances — 123