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Andhra Pradesh in for trouble financial trouble, reveals white paper on State’s finance

Submitted by admin on July 29th, 2024

Banking on the recommendations made in the paper, the on June 12, 2024, the debt and liabilities were at ₹9. Payable to Government of India for appropriation amounted to ₹ 9.74 lakh crore and liabilities payable due to court orders equalling ₹3542 crore.

The going gets rough for Chief Minister of Andhra Pradesh Chandrababu Naidu and his team if one goes by the State’s balance- sheet presented in a white paper unveiled by his government on Friday. The State is looking at a kind of severe stress situation as far as expenditures for the fiscal year 2024-25 is concerned with a gap of ₹ 1,46,909 crore. This is on account of gap in crucial circulation expenditure due to vendors, schemes and due to employees.

In the context of the paper, the debt and other liabilities within that particular date of June 12, 2024 were recorded to be to the tune of ₹9.74 lakh crore lakh crore and liabilities payable on account of directions of the Court were ₹ 3,542 crore.

“The journey ahead is challenging due to the messed-up situation left by the previous government,” the paper said adding that discussion and debate is the key in order to have a collective understanding of the particular problem and also to identify the short-term, medium-term and long-term remedies that can nourish the growth of the state. “We assure that we shall be able to take this responsibility and deliver as per the commitments with the support and active participation,” Naidu added.

Decline in GSDP

According to the paper, there are indications of destruction of State Economy between 2019 and 2024. This paper has pointed out that there was a slow down in growth of GSDP. The State lost ₹6. 94 lakh crore because of the option of a lower growth rate.

“In case the growth rate of 13. 5 percent was maintained: State would have seen an additional earning of ₹76, 195 crore”, the paper added although the Covid impact has to be taken into account, additional earning of ₹52,197 crore should have come to the State.

Describing Direct Benefit Transfer schemes which were to increase the wealth with the people, the paper said. But, the growth of per capita income comes down, for the reason that, the DBT expenditure compel more borrowings by the State and with the help of which per capita debt upsurge.

The paper also explains how the process of State bifurcation affects the present financial situation of the newly formed independent Andhra Pradesh. The residual State of Andhra Pradesh has got only 46 percent of the tax revenue for 58 percent population, Quoted. Hence, the absolute amount returned the per capita income in Andhra Pradesh to below that of Telangana. They are also pointing at some sort of an inefficiency in the hasing of public finances.