Vikramaraka said the state government has proposed reforms in the horizontal tax devolution, suggesting a shift away from the current "Per Capita Income Distance" criterion.
Published Mar 19, 2025 | 2:22 PM ⚊ Updated Mar 19, 2025 | 2:22 PM
Deputy Chief Minister Mallu Bhatti Vikramarka with Chief Minister A Revanth Reddy before the Budget presentation on Wednesday, 19 March. (X)
Synopsis: Of the total budgetary allocations, ₹40,232 crore will go to Scheduled Castes welfare, followed by Panchayat Raj (₹31,605 crore), Agriculture (₹24,439 crore, including ₹18,000 crore for Rythu Bharosa), Education (₹23,108 crore), ST welfare (₹17,169 crore), BCs (₹11,405 crore), and STs (₹17,169 crore).
Telangana Deputy Chief Minister Mallu Bhatti Vikramarka presented a ₹3,04,965 crore Budget for the financial year 2025-26 in the Assembly on Wednesday, 19 February.
He expressed concern over the Centre’s discrimination against the state in tax devolutions and proposed a new methodology.
The minister’s focus on the state being deprived of its legitimate share in the central taxes reflected the overall mood of South Indian states, which have been raising their voice on the issue in several fora.
Vikramarka, who holds the finance portfolio in the A Revanth Reddy Cabinet, covered a wide gamut of issues that the state is facing in the Budget, ranging from finding funds for the redemption of the government’s commitment to Abhaya Hastam – a bundle of guarantees and promises made to the people on the eve of the Assembly elections.
He said the state government had proposed reforms in the horizontal tax devolution, suggesting a shift away from the current “Per Capita Income Distance” criterion.
Instead, it recommended assigning 50 percent weightage to GSDP (Gross State Domestic Product) to ensure a more equitable allocation of resources for states driving national economic growth.
Vikramarka said the state government has submitted a comprehensive report to the 16th Finance Commission, urging a fair share of central tax distribution for states.
Additionally, it has requested greater financial assistance for debt stability, infrastructure development, and social welfare programmes. The state government has proposed increasing the central tax devolution from the current 41 percent to 50 percent.
Telangana also highlighted to the Commission that the cess and additional charges imposed by the central government have significantly reduced the revenue allocated to states, he said.
The deputy chief minister said that the Telangana government has already expressed concern over the declining share of tax devolution to the state.
Under the 14th Finance Commission, Telangana received 2.437 percent of funds, which slid to 2.102 percent under the 15th Finance Commission.
“Our government represented that allocating fewer funds to well-performing states is unfair and advocated a more rational tax distribution system that incentivises states contributing significantly to the nation’s economic growth,” he said in his speech.
The finance minister — referring to the ₹3.04 lakh crore expenditure for the upcoming financial year — said revenue expenditure would be ₹2,26,982 crore and capital expenditure ₹36,504 crore.
Of the total allocations, ₹40,232 crore will go to Scheduled Castes welfare, followed by Panchayat Raj (₹31,605 crore), Agriculture (₹24,439 crore, including ₹18,000 crore for Rythu Bharosa), Education (₹23,108 crore), ST welfare (₹17,169 crore), BCs (₹11,405 crore), and STs (₹17,169 crore).
Dwelling at length on the state’s finances, he said that Telangana’s economy continues to achieve steady growth, effectively navigating the rapid changes in the global economic landscape.
In 2024-25, Telangana’s Gross State Domestic Product (GSDP) at current prices stood at ₹16,12,579 crore, registering a growth rate of 10.1 percent compared to the previous year.
During the same period, India’s GDP was ₹3,31,03,215 crore, with a growth rate of 9.9 percent.
As regards per capita income, in 2024-25, at current prices, it stood at ₹3,79,751, with a growth rate of 9.6 percent. In comparison, India’s per capita income is ₹2,05,579, with a growth rate of 8.8 percent. It indicated that Telangana’s per capita income is higher by 1.8 times—₹1,74,172.
He said in 2024-25, Telangana’s Gross State Value Added (GSVA) was primarily driven by the service sector, which contributes 66.3 percent, followed by the agriculture and allied sectors at 17.3 percent and the industrial sector at 16.4 percent.
At the outset, the finance minister explained how “some individuals” made it their mission to question every action of the government and indulge in baseless criticism.
“They manipulate public perception by spreading false narratives through social media and their publications. It is our responsibility to effectively counter such misleading propaganda and consistently present the truth to the people,” he said.
Vikramarka said that if the truth is not communicated clearly and frequently, there is a danger that the lies spread by self-serving individuals will be mistaken for reality.
“Hence, we are striving continuously to bring the facts to the forefront. Our government upholds the true spirit of federalism while prioritising the long-term welfare and inclusive development of the state and delivering welfare benefits to every citizen,” he said.
Asserting that the state has struck a perfect balance between welfare and development—much like a “twin-engine system”—driving the chariot of good governance forward with exceptional momentum.
Dwelling at length on Abhaya Hastam, the bouquet of guarantees and promises, the minister said: “Our strategic roadmap for the next decade envisions a fivefold expansion of the current USD 200 billion state economy into a trillion-dollar economy.”
He said to establish Telangana as a leader in modern technology, clean energy, and sustainable development, we have formulated the “Mega Master Plan 2050.”
“As part of this initiative, we are actively promoting the establishment of solar and wind energy projects, driving the state towards a greener and more energy-efficient future,” he further stated.
The finance minister explained how the government had made the dream of the Dalits come true by taking up sub-categorisation of the SCs, which he said was a historic milestone in Telangana, reaffirming the state’s commitment to social justice and equitable development.
He said the demand for SC sub-categorisation has been ongoing for many years. Its primary objective is to ensure fair representation for the most disadvantaged Scheduled Castes and to provide them with equitable access to education and employment opportunities.
Upon approval of the report by the Justice Shameem Akhtar Commission, the SC sub-caste classification law was enacted by the state government, he said, pointing out that “Telangana has become the first state in the country to implement this classification.”
Vikramarka also referred to the government’s commitment to the welfare of the Backward Classes. He referred to the commissioning of the “Comprehensive Social, Economic, Education, Employment, Political & Caste Survey (SEEEPC),” which formed the basis for providing 42 percent reservations to the BCs.
The minister also dwelt extensively on the Mega Master Plan – 2050, which the state government has drawn up. He said that it was intended to achieve widespread industrial growth across Telangana by 2050.
“The core objective of this policy is to decentralise industrial development, ensuring that Hyderabad is not the sole hub of industrial progress, but that all regions of the state experience balanced and sustainable growth,” he said.
As part of this endeavor, the government is establishing sector-specific industrial clusters across Telangana in key industries such as IT, pharmaceuticals, healthcare, food processing, sports, automobiles, garments, metalware, handlooms, and jewellery manufacturing, among others.
These clusters will drive economic expansion, job creation, and infrastructure development throughout the state. Further, the government is establishing the Hyderabad-Warangal Industrial Corridor along both sides of NH-163, creating a strategic growth corridor that will attract investments and boost regional industrialization.
He said to strengthen Telangana’s position as a global pharmaceutical and life sciences hub, the government plans to establish Greenfield Pharma Clusters in the Ranga Reddy and Mahbubnagar districts. These clusters will be equipped with world-class infrastructure, providing essential support for pharmaceutical, biotech, and life sciences companies to scale up their operations.
The Pharma City will serve as a dedicated hub for the production of antibiotics, synthetic drugs, vaccines, nutraceuticals, herbal medicines, and cosmetics-related products.
The Budget also featured the Future City, which the minister called India’s first Net-Zero Future City, setting a new standard in sustainable and smart urbanisation.
Designed to rival the world’s top cities, this eco-friendly, ultra-modern metropolis will feature state-of-the-art infrastructure, cutting-edge technology, and a pollution-free environment.
The Future City is coming up in 765 sq. km across 56 villages between the Srisailam and Nagarjuna Sagar highways. This transformative mega-urban project is meticulously planned to drive innovation and economic growth.
Additionally, it will house specialized zones such as an AI City, Pharma Hub, Sports City, and Clean Energy Innovation Zone, making it a global hub for technology, industry, and sustainable development.
The state government has launched SPEED (Smart, Proactive, Efficient, and Effective Delivery) to fast-track the completion of 19 key projects within the stipulated timeframe. This initiative focuses on real-time monitoring, proactive execution, and efficient resource management to ensure timely delivery and maximise public benefit.
Some of the major projects under SPEED include the Musi Riverfront Development, Metro Rail Expansion, Regional Ring Road Construction, Telangana Bhavan Construction in Delhi, and the New Osmania Hospital Building.
The minister touched upon the explosive issue of Telangana’s rightful share of Krishna waters. He said to secure Telangana’s rightful share of water, the state has presented comprehensive, data-backed arguments before the Brijesh Kumar Tribunal.
“We focused on how Andhra Pradesh, despite being allocated less water, has been utilising more than its fair share and urged the tribunal to take corrective measures,” he said.
Referring to irrigation projects, he said that the state has developed a strategic plan, prioritising them into Category A and B based on urgency and impact. The government’s primary goal is to bring maximum agricultural land under cultivation with minimal expenditure.
“As part of this effort, we have launched the Udaya Samudram Brahmana Velamala Lift Irrigation Project to provide water to drought-prone areas in Nalgonda and Yadadri Bhuvanagiri districts,” he said.
He said this project will lift 6.70 TMC of water from the Udaya Samudram Balancing Reservoir to the Brahmana Velamala Balancing Reservoir. Once completed, this project will irrigate one lakh acres across 94 villages and supply safe drinking water to 107 villages affected by fluoride contamination, significantly improving both agricultural productivity and public health.
(Edited by Majnu Babu).
