NITI Aayog releases fiscal health index report
Hyderabad: Health spending as a ratio of total expenditure has declined from 4.67 per cent in 2018-19 to 4.57 per cent in 2022-23 in Telangana, according to NITI Aayog Fiscal Health Index report-2025 for the financial year 2023. The report was released in 2025.
The report further stated that the State has allocated a lower percentage of its total expenditure to health and education compared to the other major States. The State’s strong revenue growth is encouraging. It may however, focus more on increasing capital expenditure, mainly in the social (health and education) sector services.
Referring to quality of expenditure, the report said the State’s developmental expenditure has increased due to higher economic services spending. However, Capex and spending on health and education have declined
The States’ developmental expenditure as a ratio of total expenditure was around -0.70 and has been higher than the average of other major States. This is mainly due to higher expenditure on economic services but there is a decline in the allocation towards social services.
Capex decreased in absolute terms as well as in terms of percentage of GSDP. Capex as a share of total expenditure declined from 17.6 per cent in 2018-19 to 9.3 per cent in 2022-23. Though higher than many major States, it represents a significant decline.
The State has allocated a lower percentage of its total expenditure to health and education compared to the other major states. Health spending as a ratio of total expenditure has also declined from 4.67 per cent in 2018-19 to 4.57 per cent.
With regard to revenue mobilization, during 2022-23, State’s own tax revenue constituted 67 per cent of total receipts. Own tax revenue as a ratio of GSDP stood at around 10 per cent in 2022-23
The State’s own tax revenue increased by 65.3 per cent from 2018-19 to 2022- 23. The State’s own revenue buoyancy ratio of 1.65 with respect to GSDP indicated faster growth than the GSDP.
In FY 23, non-tax revenue rose due to higher receipts from various sectors, including miscellaneous general services, non-ferrous mining and metallurgical industries, forestry and wildlife, crop husbandry, interest receipts, and major irrigation. Key contributors to tax revenue were State GST, taxes on sales, trade, State excise, and stamps and registration.
Receipts from own tax revenue consistently grew, except in 2020-21, and remain the most reliable income source, while other components showed uneven trends.
The State’s fiscal deficit target was set at five per cent of GSDP, but it recorded a lower deficit of 2.48 per cent in 2022-23. It achieved a revenue surplus after three years of deficits and remained compliant with the FRBM targets for both fiscal and revenue deficits in 2022-23.
Referring to debt index and debt sustainability, the growth rate of outstanding public debt ranged between 11.9 per cent-19.1 per cent over the last five years. The ratio of outstanding Debt to GSDP which was increasing year after year until 2020-21, has shown a decreasing trend in the last two years.
This year, the ratio decreased (27.2 per cent) when compared to the preceding year (28.6 per cent).
The average interest rate of outstanding public debt has decreased from 8.2 per cent in 2018-19 to 7.6 per cent in 2022-23. The State’s reliance on debt has led to a considerable portion of resources being allotted to debt and interest payments, which have increased by 73 per cent from Rs.12,586 crore in 2018-19 to Rs.21,821 crore in 2022-23, consuming a high share of revenue expenditure.
