In place of values like social benefit, social welfare, creation of public assets, and governmental responsibility, we now have values like private gain, private greed, accumulation of private property, and governmental irresponsibility. This policy has also flung open the gates to corruption.
Published Sep 26, 2025 | 8:00 AM ⚊ Updated Sep 26, 2025 | 8:00 AM
In truth, this crisis did not emerge in a single day. But as this government completes two years in power, it can no longer repeatedly point fingers at its predecessor as an excuse.
Synopsis: If, instead of Arogyashree, the government had built one fully equipped public hospital in each district, the costs would not have been higher. The same story applies to college fee reimbursement. Instead of setting up educational institutions, the government has abdicated its duty and left students at the mercy of private players. These policies were not motivated by concern for people’s health or a desire to provide better services; they were motivated by loyalty to private interests and the kickbacks and election funds they return.
Two or three news items that surfaced this week have raised serious doubts and concerns about the health of Telangana’s economy.
Managements of private professional colleges warned that unless the government clears the thousands of crores of rupees due to them under the fee reimbursement scheme, they will resort to direct action.
At the same time, hospital managements announced that unless the government pays them the thousands of crores of rupees pending under Arogyashree, they will stop providing medical services.
News reports also say that contractors who undertook government works in the construction and service sectors are agitated that their dues are not being paid.
Finally, it has come to light that the government owes newspapers and TV channels a few hundred crores in arrears for nearly two years of advertisements issued by the Department of Information and Public Relations.
The reason the Telangana state government is unable to pay the bills it is obliged to clear lies in its steadily deteriorating financial condition.
Reports suggest that the government is surviving only on loans; that it has already exhausted 85 percent of the loans permitted by the central government for the entire year within just six months; and that for the remaining six months of this financial year it will have to somehow manage with the meagre 15 percent that is left, a distressing situation to say the least.
In truth, this crisis did not emerge in a single day – it may well have been inherited from the previous government. That is true. But as this government completes two years in power, it can no longer repeatedly point fingers at its predecessor as an excuse.
Over these two years, it has made no attempt to pursue economic policies different from previous governments or to adopt new methods of revenue and expenditure.
It is reported that the arrears the government owes to private colleges under student fee reimbursement have piled up for six years now and stand at over ₹8,000 crore.
Similarly, the dues owed to private hospitals under the Arogyashree scheme, which covers health services for the poor, the middle class, employees, and pensioners, amount to about ₹1,400 crore.
Although suggestions have often been made that the very design of both the reimbursement and Arogyashree schemes is flawed and needs reform, successive governments—including the present one—have continued them to serve the interests of private corporate educational institutions and hospitals.
Instead of spending a few hundred crores to set up government hospitals, dispensaries, and medical colleges, the government declared that it would provide medical services to people through private hospitals and pay the costs. In other words, it gave primacy to private interest over collective and public interest.
Instead of building hospitals that serve all, it promised healthcare access to individuals separately. The government itself thus prioritised individual gain over social benefit. As a result, health has become a marketable commodity. Corporate hospitals mushroomed, carefully nurturing the golden goose called Arogyashree.
This practice, begun in undivided Andhra Pradesh during YS Rajasekhara Reddy’s tenure as Chief Minister, has continued even after state bifurcation. Though two chief ministers succeeded in the united state and another two in the separated states, and though there were attempts to rename the scheme, it has remained unchanged.
These policies were not motivated by concern for people’s health or a desire to provide better services. They are motivated by loyalty to private corporate hospital managements – for the kickbacks and election funds they return. By one estimate, under the Arogyashree alone, the Telangana government spends at least ₹100 crore every month.
In the past 11 years, it is reported to have paid ₹1,629 crore just for treatment of heart diseases. This means that since the formation of Telangana, about ₹20,000 crore of public money might have flowed into the coffers of corporate hospital owners.
How much of that amount truly represented the cost of health services, and how much was inflated by charging double in billing, is unclear.
This scheme may have provided better medical services to some individuals, but it allowed the government to abdicate its responsibility of providing healthcare to all.
In place of values like social benefit, social welfare, creation of public assets, and governmental responsibility, we now have values like private gain, private greed, accumulation of private property, and governmental irresponsibility. This policy has also flung open the gates to corruption.
If instead of Arogyashree, the government had built one fully equipped public hospital in each district, the costs would not have been higher. The people would have received better health services free or at low cost.
Medical staff appointments would have created large-scale employment. And the government and people would have been left with permanent public assets.
The same story applies to college fee reimbursement. College managements claim arrears have piled up for six years.
It is said that more than 2,000 colleges in the state receive reimbursement funds, including 1,000 degree and PG colleges, 175 engineering colleges, 120 pharmacy colleges, 250 MBA and MCA colleges, and so on.
Some small colleges may have shut down for lack of reimbursement. But there are also colleges that, despite years of arrears, continue to run because they earned vast funds through irregularities and corruption, and use the institutions for other lobbying purposes.
Here too, instead of setting up educational institutions, appointing teaching and non-teaching staff, and providing education facilities as a social benefit, the government has abdicated its duty and thrown students at the mercy of private corporate educational entrepreneurs.
Many of these education barons are themselves part of the political leadership and participate in shaping the government’s educational policies.
Although these schemes were designed in the first place to serve the interests of the health and education business sectors, and although the government remains favourable to them, today we see signs of conflict simply because the government’s financial position has slipped into disarray.
So how did the government’s finances deteriorate?
Even if revenue falls short of projections, expenditure cannot be avoided. Employee salaries and allowances, pensions, subsidies, and repayment of loan principal and interest – none of these can be skipped.
For example, in April 2025 alone, the government spent ₹3,968 crore on salaries and allowances, ₹2,260 crore on loan repayment and interest, ₹1,569 crore on pensions, ₹4,187 crore on subsidies, and, including other expenses, a total of ₹15,262 crore.
But revenue that month amounted to only ₹11,238 crore. This means that in the very first month of this financial year, there was already a deficit of ₹4,024 crore. Borrowing therefore became inevitable.
For 2025–26, the state government estimated it would raise ₹64,539 crore in loans. But under the Fiscal Responsibility and Budget Management (FRBM) Act, the central government determines how much states can borrow.
Ironically, the Union government, which imposes restrictions on states citing the FRBM Act, itself flouts those limits and borrows recklessly – but that is another story.
Coming back to Telangana: the Centre reduced the state’s borrowing estimate and permitted only ₹54,009 crore in loans. By September 23, the state government had already borrowed ₹45,900 crore. This leaves only ₹8,109 crore that it can borrow for the rest of the year.
That is, the government will have to manage with loans far smaller than what it borrowed earlier in each month since June.
The current government keeps blaming the previous one for this financial malaise. There is some truth in that, but as it completes two years in power, it must answer why the cart has still not been set back on track.
At the time of bifurcation, the combined state’s debt burden stood at ₹1.66 lakh crore, of which ₹18,000 crore was disputed. The remaining ₹1,48,060 crore was divided between the two states, leaving Telangana with ₹61,711 crore in debt.
Over nine-and-a-half years of Telangana Rashtra Samithi (TRS, now Bharat Rashtra Samiti) rule, that figure multiplied exactly tenfold to ₹6.71 lakh crore. In the last 20 months, the Congress government is estimated to have added another ₹1.66 lakh crore to that burden.
All these debts, with varying interest rates and repayment periods spanning 20 to 25 years, will have to be paid by the people of Telangana.
In effect, we are mortgaging not just our present for our current needs, but also our future, the future of our generation, and even the next generation.
If borrowing were avoided, we might look to land sales or privatisation of public enterprises as alternatives – but those too would mean mortgaging and destroying the future.
A patient on a ventilator may endure their own suffering quietly, but those around them—their dependents, their relatives, their wife and children—experience even greater anxiety and distress.
(Edited by Dese Gowda)
