Both Andhra Pradesh and Telangana are facing mounting fiscal stress in the first quarter of the 2025-26 financial year. Reports and opposition leaders highlight that revenues have failed to meet expectations, while borrowings have surged, with Telangana exhausting over a third of its annual borrowing limit already. Declining non-tax income and reduced central grants are compounding the problem, raising concerns about the states' ability to fund welfare and development programs. Former Andhra Pradesh CM YS Jagan Mohan Reddy has been vocal about the worsening financial health, citing CAG data to warn of a precarious situation. The fiscal challenges are prompting urgent calls for better financial management and strategic expenditure.
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