Hyderabad: Between 2015-16 and 2023-24, Telangana generated the bulk of its income through its own resources, reflecting a strong internal revenue base. As much as 63% of the state’s total revenue came from its own tax collections during this period, data has revealed. In addition, 14% of the revenue was mobilised through non-tax sources such as fees, fines and other income streams. Together, own tax and non-tax revenues formed the backbone of the state’s finances, the data said.
At the same time, Telangana continued to receive financial support from the Centre. Around 13% of its revenue came from the devolution of central taxes, while grants-in-aid accounted for another 10%. The revenue pattern indicates that while the state has strengthened its financial independence by relying largely on internal resources, central transfers remain an important component of its overall receipts. Broadly, a state’s revenue receipts are divided into two main categories: own revenue and transfers from the central govt. Own revenue includes collections from state taxes as well as non-tax sources. Transfers from the Centre comprise the state’s share in central taxes and grants-in-aid. The distribution of central tax revenue among states is based on the recommendations of the Finance Commission. Grants-in-aid include allocations for centrally-sponsored schemes and other grants recommended by the commission.
