Given the ‘grim financial situation’ Andhra Pradesh Government will present a full Budget for the year 2024-25 in due course.
“Perhaps for the first time in the country, members are not in a position to rejoice and meet people’s aspirations immediately. Keeping this in view, my Government is proposing to go for the Budget after meaningful deliberations,’‘ Andhra Pradesh Governor S Abdul Nazeer said in his address to the Andhra Pradesh Legislature on the first day of the assembly sessions in Amaravati on Monday.
Financial Damage
Referring to the ‘destruction and financial damage’ during 2019-24 under YSR Congress Party rule, the Governor said: “In fact, the damage and losses during the period 2019-24 have been more severe compared to the State re-organisation in June 2014. Capital expenditure was reduced by 60 per cent in 2019-24 compared to 2014-19. Departments such as Water Resources and Transport, Roads & Buildings which handle substantial capital works, were critically short of funds to carry out any projects.’‘
Capital expenditure on water resources was reduced by 56 per cent while spending on roads and buildings decreased by an alarming 85 per cent during this period. The compound annual growth rate of the State’s own tax revenue fell from 12.8 per cent to 8.1 per cent. On the other hand, revenue expenditure increased from 7.8 per cent to 10.5 per cent, the Governor said.
Debt burden
Lower share of capital expenditure to public debt during the period 2019-24 was a clear indicator that the government met revenue expenditure through borrowed funds. The CAGR in per capita debt was 14 per cent while the CAGR in per capita income was only 9.7 per cent. “This reflects the fiscal profligacy of the previous regime as no capital formation took place,’‘ he added.”
As a result, the new government is struggling to meet even the essential committed expenditures with the reduced revenue of the State. Overall debt has more than doubled in the last 5 years, with huge outstanding payments of salaries and pensions, debt repayments for the debt burden of about ₹10-lakh crore, payments for power sector dues, Civil Supplies and other liabilities became challenging.
The Chief Minister visited New Delhi to meet the Prime Minister and other Union Ministers and appraised them of the grim financial situation. “During the visit, special requests were also made for support from the Centre and extending liberal support to the State.,’‘ the Governor said.
In February, the then YSRCP Government tabled an interim budget for the period between April and July due to general elections.