Payment of high interest for loans obtained by the BRS government continues to haunt the State finances in the year 2025, even as the Congress government is trying hard to improve the general economy of the State, which registered slow pace of growth over the past couple of years.
The interest burden of the State has been mounting with the State government paying ₹18,486 crore till November end against ₹19,369 crore budgeted for the entire financial year. The interest payment is indicative that the government could end up paying interest in excess of ₹25,000 crore, almost 10% of the overall revenue receipts estimated at ₹2.29 lakh crore, at the end of the fiscal.
The situation was not different during the previous fiscal year when the government remitted interest of ₹26,688 crore against ₹17,729 crore estimated for the financial year. A majority of these loans were obtained for the much-publicised Kaleshwaram project, which saw structural failures. “We have to borrow more to repay the interest,” was how a senior Finance department official summed up the situation.
Financial constraints notwithstanding, the government is ensuring payment of salaries to staff on the first of every month and clearing dues pending payment to employees over a period of time, releasing ₹700 crore every month. A major initiative has been taken in the last couple of months to overcome the frequent financial problems. The Finance department, after sustained efforts, secured approval of the Union Finance Ministry to swap high-interest loans with low-interest ones.
As a result, high-interest loans worth ₹26,103 crore with relatively short repayment tenures were swapped with low-interest ones with longer tenures, officials said. The government had targeted clearance of other higher-interest loans in the coming days easing strain on the finances.
The impact of the decision will be seen in the coming years with a reduction of the interest burden, allowing the government to spend on programmes aimed at boosting the general economic growth. One of the key areas that the department is trying to address is arresting the leakages, while initiatives like the recent Telangana Rising Global Summit, which saw memorandums of understanding (MoUs) signed for more than ₹5.75 lakh crore investments, are sure to boost the economy.
“Some of these MoUs will definitely materialise as we have focused on the follow-up action,” Finance Secretary Sandeep Kumar Sultania told The Hindu. He explained about the steps that were taken to ensure the revenue-earning departments increase their contribution to the exchequer with a focus on completion of the projects, attracting investments and giving boost to industry by improving infrastructure.
According to him, restructuring of high-interest loans would lead to a reduction in the interest burden, while the focus on projects and industry will create new jobs, thereby allowing money circulation. “We have the support of Chief Minister A. Revanth Reddy and Deputy Chief Minister Mallu Bhatti Vikramarka, who are in favour of initiatives like loan restructuring. We are moving ahead in a planned manner to balance growth/development by gradual restructuring to reduce negative impact on finances,” he said.
The department had therefore ushered in an Aadhar-based e-sign system for clearance of various bills, and the paperless system is being extended to all treasury offices across the State. The department took steps to clear pending bills worth around ₹3,000 crore pertaining to the Centrally sponsored Schemes. This was in addition to the payment of ₹926 crore, ₹50 a quintal, as a bonus for fine rice procured from the farmers. Steps were taken to ensure updation of Aadhar numbers of more than 10.7 lakh government employees, including contract, outsourcing, daily wage and honorarium to arrest leakages.
Published – December 24, 2025 07:17 pm IST
