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The public debt of Andhra Pradesh has hit ₹3.89-lakh crore in the financial year 2021-22, registering an increase of almost ₹40,000 crore compared to previous year, accounting for 32.4 per cent of the Gross State Domestic Product.
Though outstanding debt includes the un-apportioned amount of ₹4,422 crore between Andhra Pradesh and Telangana, the surge in other forms of debt has been quite noteworthy. The market borrowings stood at ₹2.64,837 crore in FY22. The high amount of debt has been increasing the interest burden on the State which is at about ₹22,000 crore.
Drivers
“The State finances have been under stress on account of various factors such as shrinking of revenue base, bludgeoning expenses and due to various factors such as increase in the establishment costs, interest payments, welfare commitments and loss of the capital city as a major commercial hub,’‘ the government said in an update on the public finance.
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Welfare schemes get primacyThe fiscal stress is the result of expenditure commitments rising faster, lesser than promised and anticipated flow of funds from the Government, it claimed.
Revenue
The revenue increase for the State government has been offset by higher expenditure. Its own tax revenue in FY22 increased to ₹73,690 crore from ₹57,427 crore in the previous year. The Central transfers and own non-tax revenue too had gone up to ₹77,947 crore (₹59,703 crore) and ₹5,451 (₹2,295 crore) respectively. The total expenditure including ways and means advance and public debt repayments had grown up from ₹1,73,367 crore in the FY21 to ₹1,93,548 crore in FY22.
A substantial part of revenue expenditure went for welfare schemes such as rice subsidy, power subsidy, Navaratnalu, old age pensions, housing programmes.
Impact
The debt burden is impacting the image of the government and development works. According to reliable sources, there has been delay in government payments to contractors and other tender-related outgo of about ₹1 lakh crore which even forced some contractors to move the State High Court. The Comptroller and Auditor General had also expressed its displeasure over ‘expenditure without allocation’ of ₹ 90,000 crore
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