Deputy Chief Minister and Finance Minister Mallu Bhatti Vikramarka has said that the revenues to the State will reduce drastically with the Union government strategically reducing customs duties on certain goods while simultaneously increasing the cess.

“Such measures will further shrink the divisible pool of taxes, eating away at States’ share in devolution,” he said while alleging that there an erosion of fiscal federalism.

He said with a 30.5% increase in Centrally Sponsored Scheme (CSS) allocations to ₹5,41,850 crore (as compared to ₹4,15,356 crore in 2024-25 (RE)), the budget moves further away from the principles of fiscal federalism.

The Minister said the Union Budget allocated an excessive amount of funding to Bihar through various schemes and initiatives, despite the fact that the State has maintained surpluses on its revenue account and its fiscal deficit is also found to be lower than the permissible levels in many of the past years. States like Telangana, which have demonstrated a strong capacity for effective resource utilization, on the other hand, continue to remain neglected even in the 2025-26 Union budget.

Mr. Vikramarka said Telangana has consistently prioritized water conservation and irrigation through various irrigation projects. However, the Union Budget failed to allocate any significant funds for these projects. “The absence of support for Telangana’s irrigation initiatives is a direct blow to our farmers, who are the backbone of our economy”, he argued.

While the Budget has committed to the development of greenfield airports in Bihar, and announced the launch of a modified UDAN scheme to enhance regional connectivity, there is no mention of support for Warangal Airport.

Similarly, Telangana has been overlooked in the establishment of Centres of Excellence in Artificial Intelligence, he said despite Telangana being a national leader in the area of Artificial Intelligence, with a dedicated AI Mission (T-AIM) in partnership with global industry giants such as NVIDIA, Intel, and Adobe.