Financial burden on Telangana government to provide Rythu Bharosa and crop compensation

The Telangana government is coming under heavy financial strain in the coming days to fulfill its commitments to the agricultural sector. According to a report by The Hindu, providing assistance under the Rythu Bharosa scheme or giving crop compensation to farmers has become a major challenge for the state government. Especially keeping the El Nino weather phenomenon in mind, the government is encouraging farmers not to cultivate crops requiring more water, such as paddy, and plans to provide them compensation in return.

The state government has demanded a special assistance package of ₹30,000 crore from the Central Government to provide relief to various affected groups, including farmers. Initially, this demand was ₹20,000 crore, but seeing the expected severity of El Nino, it has been increased by ₹10,000 crore to ₹30,000 crore. It is estimated that the impact of El Nino will continue until the next rainy season, creating the need for this amount for direct crop loss compensation.

During the first six months of the financial year 2026-27, the state's revenue income has not been as expected, making it difficult for the finance department to gather the necessary resources. In the budget estimates, a total income of ₹2.41 lakh crore was projected for this financial year, but at the end of the first six months, the total income was recorded at only ₹92,013 crore. This amount is only 38.14% of the total estimated income.

A large portion of the income sources consists of borrowed amounts. By the end of September, the borrowed amount was ₹44,612 crore. Subsequently, adding the amount obtained through the auction of securities in October, the total borrowed amount has increased to approximately ₹50,000 crore. These figures indicate that the government is becoming more dependent on borrowings to meet its requirements.

All eyes are now on the relief amount to be provided by the Central Government, as the decision on how much compensation will be given to farmers will depend on the Centre's assistance. It is noteworthy that in July, the state government deposited approximately ₹9,000 crore into the accounts of 71.38 lakh farmers under Rythu Bharosa for the Vanakalam (Kharif season).

Generally, the date for announcing the Yasangi (Rabi season) installments is declared by the end of December. However, this time the announcement will depend on the government's compensation plan. Since the government has instructed farmers not to take up Rabi crops given the current El Nino situation, the decision will depend on the plan for how to compensate them.