AP State demands 4.79 L cr to bridge revenue deficit

Amaravati: The Andhra Pradesh Government has demanded Rs 4,79,823 crore as revenue deficit grant from the Central government. If the revenue deficit grants are not provided, the state will have to meet the same from the borrowings, which cripple capital expenditure and growth. 

The state government strongly argued to continue revenue deficit grant in the interest of states’ development and award revenue deficit as projected from 2020-25. 

During a presentation to the 15th Finance Commission, Chief Minister N Chandrababu Naidu requested them to suggest the Central government to provide this grant to meet the revenue deficit.

The state government requested the Finance Commission to recommend distribution of 50 per cent of net proceeds of taxes of Union between Union and States (commonly referred to as vertical devolution). At present this is 42 per cent.

The government also asked the Commission to allocate shares of such proceeds between the states (commonly known as horizontal devolution) based on 1971 population, instead of 2011 census. Naidu asked to give weightage to various parameters including 25 per cent for 1971 population, 15 per cent on area, 47.5 per cent for income distance (GSDP net of agri share) and the remaining 12.5 per cent based on growth performance.  

Naidu asked the Commission to sanction Rs 22,250 crore for development of backward districts and added the Centre promised to provide Bundelkhand package to AP, but they gave just Rs 50 crore per each district of seven backward districts in the state.  

Naidu explained the Centre took back Rs 350 crore from the state government, which were released under backward districts grants this year and termed it as ‘unethical’ and ‘unconstitutional.’

Naidu said Andhra Pradesh is a ‘political victim’ as both the Congress and BJP governments did injustice to the state. Explaining the state government has been striving for construction of capital city Amaravati, he asked the FC to recommend at least Rs 37,437 crore for construction of vital and basic infrastructure. 

Naidu said the construction of capital city would be the responsibility of the Centre and they did not cooperate during last four years. He explained the 12 and 13 Finance Commissions recommended Rs 4,500 crore for construction of Naya Raipur, capital city of Chhattisgarh, and requested 15th FC to recommend Rs 37,437 crore for Amaravati.

He requested the Commission to recommend Rs 10,000 crore for development of road connectivity to all ports and airports. For state specific needs, Naidu said the government needed Rs 5000 crore from the Centre.

Naidu said the Centre did not fulfil their 18 promises mentioned in AP Reorganisation Act and added the Central government has been asking Viability Gap Fund for construction of Petro Chemical Complex at Kakinada, from the State government.

“This was not possible to provide by state government since the state has been facing financial burdens due to unscientific bifurcation and non-cooperative attitude of Central government,” Naidu said.

He alleged the Centre was not considering the promises of constructing metro rail projects in Visakhapatnam and Vijayawada but they were enthusiastic to construct same projects in Madhya Pradesh and other BJP ruled states in the country.

The state government proposed to consider Rs 1,000 per capita per annum at an aggregate level as grants to local bodies as 14 Finance Commission awarded Rs 488.

No conditions shall be imposed by the Central government for the release of grants other than those recommended by the Commission. Since the local bodies are also part of the states, the formula adopted for horizontal distribution may be adopted for local bodies also.