Hyderabad: Even as Telangana leans heavily on borrowings to fund its ambitions, the state govt has sought to ease the strain by reworking costly past loans—turning a looming burden into short-term breathing space.The state has proposed to raise Rs 73,383 crore through open market borrowings for the 2026-27 budget, making it a key pillar of its revenue strategy. In addition, loans from the Centre are estimated at Rs 5,500 crore, while borrowings from other sources stand at Rs 1,000 crore—taking total borrowings close to Rs 80,000 crore, or nearly a quarter of the projected revenue receipts.At the same time, the overall debt burden continues to rise. Telangana’s outstanding public debt is nearing the Rs 6 lakh crore mark, increasing from Rs 3.98 lakh crore in 2023-24 to Rs 5.62 lakh crore in the current budget estimates—about 29% of the GSDP.On the expenditure side, interest payments remain a significant pressure point, estimated at Rs 21,304 crore. The state expects a revenue surplus of Rs 6,857 crore in the current fiscal, up from a projected Rs 2,738 crore, while the fiscal deficit is pegged at Rs 59,458 crore. The primary deficit is estimated at Rs 37,154 crore.Amid these pressures, finance minister Bhatti Vikramarka highlighted debt restructuring as a key relief measure. He said Rs 25,612 crore of high-interest loans raised by the previous govt have been restructured at lower rates, with repayment periods extended to 20-39 years. This has reduced the repayment burden from Rs 34,058 crore between 2025-26 and 2031-32 to Rs 11,915 crore, cutting cash outflow by Rs 22,142 crore and easing liquidity.Bhatti also said loans taken by the Telangana Urban Finance Infrastructure Corporation at 10.2% interest, amounting to Rs 172.02 crore, and borrowings of Rs 2,204.06 crore by the Telangana Road Development Corporation at 9.7% have been refinanced at a lower rate of 8.6%.In total, the govt has converted high interest loans worth about Rs 27,988 crore into lower cost debt for 2025-26.The numbers reflect a dual reality—rising dependence on borrowings, alongside efforts to soften their long-term impact through restructuring, an expert explained.
