Zero growth in GST: Telangana is struggling financially

Telangana’s economy hit a concerning milestone in March 2025, with the state reporting zero percent growth in Goods and Services Tax (GST) collections compared to the same month last year. The latest data from the central government has sparked a major political backlash, with the Bharat Rashtra Samithi (BRS) launching a scathing attack on Chief Minister A. Revanth Reddy and the Congress-led administration, accusing them of misgovernance and derailing the state’s economic progress.

Official figures show that Telangana collected ₹5,401 crore in GST revenue in March 2025, a marginal uptick from ₹5,399 crore in March 2024—effectively reflecting stagnation. This lack of growth stands in sharp contrast to the national average GST growth of 8.79% for the same period. Only Andhra Pradesh performed worse among major states, registering a 1% decline.

Telangana’s flat growth

Telangana’s flat growth is especially notable considering the state’s historically strong double-digit GST growth since its formation in 2014 (excluding the COVID-19 downturn), which had once been a key indicator of its robust economic health.

Harish Rao: “This Is a Warning Sign”

Former Finance Minister T. Harish Rao called zero percent GST growth “a warning sign” of a broader economic downturn.

“This is not just a statistic—it’s proof of Revanth Reddy’s failure to sustain the prosperity we built over a decade,” he said in a fiery statement.

Harish Rao pointed to earlier signs of economic distress: a 1% GST growth in February 2025 and a mere 5.1% for the fiscal year 2024–25, well below the national average of 10%. He also refuted claims made by Deputy CM Mallu Bhatti Vikramarka, who had cited a 12.3% growth figure in the Assembly—calling it “misleading and false.”

Delayed welfare payments

BRS leaders also blamed the Congress government’s handling of fiscal resources, highlighting delayed disbursement of crucial schemes like the ₹12,000 crore pending RythuBharosa payments.

“When people have no money in their hands, how will consumption rise? How will GST grow? This government has betrayed every hardworking citizen of Telangana,” Harish Rao said, demanding an apology from Revanth Reddy and an immediate policy reversal.

Congress blames broader economic trends

In its defense, the Congress government pointed to broader economic challenges, with Chief Minister Revanth Reddy previously suggesting that a nationwide recession had affected revenue across states.

The stagnation in GST collections has also raised red flags among economists, who warn that it could undermine the state’s ability to fund welfare programs and development initiatives, given that GST is Telangana’s largest source of revenue. With the opposition’s pressure mounting and public confidence wavering, Revanth Reddy’s government finds itself in a tightening political and economic bind.