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Deficits wobble Andhra Pradesh finances
Deficits wobble Andhra Pradesh finances
- Andhra Pradesh’s budget estimated a revenue deficit of Rs 18,434 cr (or 1.82% of GSDP) in 2020-21 while fiscal deficit was estimated at be Rs 48,296 cr (4.78% of GSDP
- State’s gross debt burden has risen to Rs 3,73,140 cr November-end 2020
- According to CAG’s latest accounts, from April to Nov 2020 alone, AP borrowed Rs 73,811.85 cr from different sources as against the annual target of Rs 48,295.59 cr for the whole year
Amaravati: Andhra Pradesh's budget estimated a revenue deficit of Rs 18,434 cr (or 1.82% of GSDP) in 2020-21 while fiscal deficit was estimated at be Rs 48,296 cr (4.78% of GSDP State's gross debt burden has risen to Rs 3,73,140 cr November-end 2020 According to CAG's latest accounts, from April to Nov 2020 alone, AP borrowed Rs 73,811.85 cr from different sources as against the annual target of Rs 48,295.59 cr for the whole yearHow healthy is the Andhra Pradesh budget now? Is it on the way to recovery? Recently, the CAG (Comptroller and Auditor General) expressed concern over the AP budgetary position which raises questions regarding the health of the state finances.
These questions become pertinent and also disturbing in view of the welfare state module designed by Chief Minister Y S Jagan Mohan Reddy. Though there are several questions that cause anxiety, there is a little relief in the form of any assurances regarding the revival of the economy. A major hurdle in reviving the state economy is its revenue deficit. It is the difference between revenue expenditure and revenue receipts. The 14th Finance Commission had recommended that states should eliminate revenue deficit.
Andhra Pradesh budget estimated a revenue deficit of Rs 18,434 crore (or 1.82 per cent of GSDP) in 2020-21. The 15th Finance Commission has recommended a revenue deficit grant of Rs 5,897 crore for Andhra Pradesh for 2020-21.
In 2020-21, the fiscal deficit is estimated to be Rs 48,296 crore (4.78 per cent of GSDP). The estimate is higher than the 3 per cent limit as per the FRBM Act.
As per the revised estimates, in 2019-20, the fiscal deficit of the state is expected to be 3.75 per cent of GSDP, higher than the budget estimate at 3.26 per cent.
However, In 2020-21, Andhra Pradesh is expected to spend Rs 34,318 crore on servicing its debt. This is 3.1 per cent less than the revised estimates of 2019-20. This includes Rs 13,935 crore towards repaying loans (41 per cent of total), and Rs 20,383 crore towards interest payments (59 per cent of total).
In 2020-21, the outstanding liabilities are expected to be 34.6 per cent of the GSDP, higher than that in 2019-20 (28 per cent of GSDP). This is higher than the average level of outstanding liabilities of 29 states in 2019-20 (24.6 per cent of their GSDP).
The total outstanding government guarantees of the state at the end of 2019-20 is estimated at Rs 67,171 crore (6 per cent of GSDP).
The Andhra Pradesh government's gross debt burden has increased to Rs 3,73,140 crore by the end of November 2020. CAG's latest accounts revealed that from April to November 2020 alone Rs 73,811.85 crore was borrowed from different sources as against the annual target of Rs 48,295.59 crore for the whole year.
