HYDERABAD: Telangana will see a marginal increase in its share of Central tax devolution during 2026–27 to 2030–31, with the 16th Finance Commission (FC) recommending a 2.174% share, up from 2.1% fixed by the 15th Finance Commission.
Union Finance Minister Nirmala Sitharaman tabled the 16th FC report on Sunday. It recommended grants of Rs 21,516 crore for local bodies in Telangana for the five-year period, including Rs 11,548 crore for urban local bodies and Rs 9,968 crore for rural ones. It allocated Rs 2,959 crore for the SDRF, of which the Union share is Rs 2,219.25 crore and the state’s is Rs 739.75 crore. Another Rs 740 crore was earmarked for the State Disaster Mitigation Fund.
The report noted that Telangana has the highest per capita income among large states. While the state inherited a low debt-to-GSDP ratio of 18.7% in 2014–15, it rose to 29.9% in 2020–21 before easing to 27.3% in 2023–24, still about 8 percentage points higher than in 2011–12. Barring three years, Telangana’s revenue account remained in surplus during the period under review, though its fiscal deficit exceeded 3% most years since 2015–16.
Power subsidies increased sharply from Rs 4,978 crore in 2018–19 to Rs 16,016 crore in 2023–24, with per capita subsidy at Rs 4,195. Discom debt rose from Rs 17,934 crore to Rs 46,127 crore during the same period, while AT&C losses remained above the all-state average of 16.37%.
It observed that Telangana depends heavily on its own revenues, with 80% of receipts coming from state sources in 2023–24. More than 20% of expenditure was on capital items. Per capita subsidy spending stood at Rs 16,460, among the highest in the country, while per capita spending on social security pensions was Rs 3,348. It is among the top states in farm subsidies at Rs 15,267 crore.
