Telangana's public debt to exceed ₹5 lakh crore soon

Telangana's public debt is projected to exceed ₹5 lakh crore by the end of the 2025-26 financial year. As debt servicing and principal payments increase, it will put more pressure on the state's finances. The latest budget documents reveal that open market loans will reach approximately ₹4.07 lakh crore, which is about ₹50,000 crore more than the previous year. The state expects to borrow ₹23,719 crore from the central government, and loans from autonomous bodies will total ₹11,202 crore. Additional financing from special securities and other sources is estimated at ₹21,787 crore. This brings the total expected debt to ₹5.04 lakh crore. Despite the rising numbers, the government claims that public debt remains manageable at 28.1% of the Gross State Domestic Product (GSDP). It has divided outstanding guarantees, totaling ₹3.01 lakh crore, into three categories. This includes loans raised by special purpose vehicles, with the government servicing some and the SPVs servicing others. Debt servicing for 2025-26 is set at ₹19,370 crore, which is about ₹2,000 crore higher than the previous year's estimate. In recent years, the government has spent more on debt servicing than initially budgeted. For example, in 2024-25, the interest payment was expected to be ₹17,729 crore, but the actual repayment exceeded ₹22,000 crore by January.