Telangana Budget 2026-27 | Bhatti likely to walk a tightrope balancing welfare and development

The stage is all set for the presentation of the annual financial statement (budget) for the year 2026-27 on Friday (March 20, 2026).

Deputy Chief Minister Mallu Bhatti Vikramarka, who holds the Finance portfolio, will do a tightrope walk as he will present the budget for the next financial year. The total outlay for the current year 2025-26 was Rs. 3.04 lakh crore and the budget for 2026-27 is likely to see an increase of about 7% taking the outlay to around Rs. 3.2 lakh crore.

Huge fiscal deficit

The task appears to be cut for Mr. Bhatti Vikramarka to strike a fine balance between welfare and development amid the tight financial situation the State has been facing. The State’s fiscal situation can be gauged from the fact that there is a huge fiscal deficit of Rs. 69,148 crore till January end, constituting 128% of the Rs. 54,009 crore projected in the budget estimates.

Revenue deficit and surplus

Revenue deficit during the same period is at Rs. 10,566 crore as against the revenue surplus of Rs. 2,738 crore estimated. The State achieved overall revenue receipts of Rs. 1.38 lakh crore till January end, 60.23% of the Rs. 2.29 lakh crore projected for the financial year. This includes huge quantum of borrowings and other liabilities — which according to the provisional figures of the Comptroller and Auditor General of India — are pegged at Rs. 69,148 crore.

72% of tax revenue achieved in 10 months

Tax revenue during the 10 months were a shade better at Rs. 1.26 lakh crore, 72.04% of the Rs. 1.75 lakh crore of budget estimates, but it is still a long way for the tax revenue to cross 85% of the budget estimates. Officials are confident that the revenue deficit would come down to a large extent as tax revenue is likely to witness a significant rise in February and March, but doubts persist on whether the receipts will be as high to bridge this gap.

Infrastructure

The State Government is likely to continue its struggle for securing the Central Government’s support for implementation of its flagship projects like Hyderabad Metro Rail expansion, development of Bharat Future City and the ambitious Musi rejuvenation project. With Chief Minister A. Revanth Reddy stressing the need for improving infrastructure including in the education, irrigation and transport sectors, adequate allocations could be made for these sectors, particularly the irrigation sector to fulfil the Government’s assurance of completing the pending irrigation projects in the next three years.

The State has several other priority areas like payment of two instalments (Kharriff-2026 and Rabi-2027) of Rythu Bharosa, farmers investment support scheme, amounting to Rs. 18,000 crore, for which necessary allocations should be made in the budget. One of the major areas that is likely to take a major share of allocations is payment of interest on loans obtained by the previous and present Governments as well as salaries/pensions of the employees which consume at least 40% of the total revenue earned.