Telangana's ambitious vision for 2026 and beyond is meeting the stark reality of its financial constraints, potentially leading to a bumpy road ahead, especially concerning the implementation of its "six guarantees". The state government is facing the challenge of fulfilling its promises amidst mounting debts and fluctuating revenues.
Telangana's economy is projected to grow, with a GSDP of Rs 18,00,325 crore for 2025-26, a 12% increase over the previous year. Expenditure is estimated to be Rs 2,84,837 crore, up 14% from revised estimates, with an additional Rs 20,128 crore allocated for debt repayment. Revenue is also expected to rise by 14% to Rs 2,30,828 crore. However, the state's finances have shown a concerning trend, with revenue receipts at the end of August 2025 only reaching 33.93% of the budget estimates. Borrowings and other liabilities have already reached ₹33,415 crore, which is over 60% of the limit set by the Union Finance Ministry.
The "six guarantees," promises made by the Congress party before the election, include financial assistance to women, gas cylinders at subsidized rates, free travel for women in state buses, financial assistance to farmers, housing for the poor, free electricity, and increased pensions. While these guarantees were instrumental in the party's victory, their implementation poses a significant financial burden. Some reports suggest that the implementation of these guarantees has been slow, leading to public dissatisfaction.
Despite these challenges, Telangana is pushing forward with several infrastructure development projects. These include the Regional Ring Road (RRR), a 340 km highway encircling Hyderabad, expected to be completed in 2026. The Strategic Road Development Plan (SRDP) aims to ease traffic congestion with flyovers and underpasses. Furthermore, the state government is planning infrastructure projects, such as the Future City near Hyderabad, with potential investments from companies like Trump Media. Telangana aims to become a $1 trillion economy by 2034 and $3 trillion by 2047.
The state government has initiated preparations for the 2026-27 budget, directing departments to submit proposals while cautioning against inflated demands. The government is prioritizing funding for ongoing programs and ensuring the utilization of centrally sponsored schemes.
To boost the economy, the government is focusing on industrial development, allocating plots in industrial parks for women and SC/ST entrepreneurs and offering incentives. It also launched the Rajeev Youth Development Scheme with a Rs 6,000 crore fund for self-employment schemes targeting youth from marginalized communities.
Telangana's growth is driven by the service sector, particularly IT, and the state aims to strengthen its position as a leader in IT and ITeS. The state is also focusing on developing a semiconductor industry, with plans for a Semiconductor Skill University, Design Hub, and ATMP unit.
Despite its ambitions and ongoing projects, Telangana needs to address its financial challenges to ensure sustainable growth and fulfill its promises. The state's ability to manage its debt, increase revenue, and efficiently allocate resources will be crucial in navigating the road ahead.
