Naidu’s growth story may miss the target

​Vijayawada: The Andhra Pradesh government, buoyant over scripting a double-digit growth story by weathering the hiccups of the bifurcation, finds the going tough in meeting its annual targets for 2016-17 fiscal.

The trends pertaining to the state’s first half year (H1) performance were made available at a Collectors’ conference here on Wednesday. The government aims to achieve 15.28 per cent growth rate in the current fiscal over 10.5 per cent in 2015-16.

It is also targeted to ensure gross value addition of Rs 5.25 lakh core by maintaining the growth rate at 15.28 per cent at the end of the current fiscal. The performance of the first half year reveals that the
state economy posted 12.23 per cent growth.

A copy of the “Quarter 2 (July –September) Year 2016-17-Assessment and Way forward for Balance quarters” indicated that the daunting task of realizing a net increment of 14,000cr seemingly poses a great challenged to the government which is in a hurry to achieve the targeted growth.

The H1 trends for the year 2016-17reveals that as against the target of 2.30 lakh crore the achievement is 2.22 lakh crore, registering a growth rate of 12.23 per cent, leaving a shortfall of Rs 8,287 crore.

The shortfall was projected mainly from industry (Rs 5017 crore) and the service sectors (Rs 3,694 crore).
However, agriculture and allied sector has a surplus of Rs 423 crore in terms of GVA (Gross Value addition) by achieving 30.09 per cent growth rate as against the targeted 25.61 per cent .

Although all the sub-sectors such as livestock, fishing, horticulture, forest and logging clocked a robust growth, the growth story in agriculture with 3.69 per cent however looks gloomy.

Overall growth in agriculture and allied sector registered 30.09 per cent. Industry and service sectors with 16.13 per cent and 12.27 per cent targets ended up with only 9.46 and 9.02 per cent respectively.

The downward graph in industry is attributed to closure of 30 per cent of industries (10,600 units) as against the total 15,100 for a variety of reasons.

Strikingly, 63 per cent of industries are located in six districts such as Guntur, Prakasam, Krishna, Kurnool, Chittor and West Godavari. Obviously, these six districts trailed in development indicators during the first year as a sequel to a decline in revenues from the industrial sector.

The government proposes to reorient itself to revive the sick industries to accelerate growth on industrial front.

A shortfall of Rs 3694 crore is noticed in the industrial sector as a result of slowdown in growth. Manufacturing sector clocked 10.20 per cent over the target of 14.94 per cent. Construction sector witnessed a poor show with 8.52 per cent as against the ambitious target of 17.83 per cent.

Strikingly, Industry, manufacturing, construction and service sectors contribute a major part of revenues to the state exchequer.

The service sector too failed to meet the target of 14.28 per cent by ending up with just 9.57 per cent. The service sector achieved the GVA (gross value addition) of Rs 116673 crore as against the targeted Rs 121690 crore.

In the backdrop of the slowdown in growth, the document observes, “Assuming the growth achieved during H1 (First half of the year) will be continued at the same rate for the second half year as well, the estimated annual gross value addition for 2016-17 would be at Rs 5.11 lakh crore only against the targeted Rs 5.25 lakh crore, leaving a shortfall of around Rs 14,000 crore to achieve the targeted 15.28 growth rate.

Bridging the gap of Rs 14,000 crore appears to be a Herculean task for the government in the backdrop of economy getting crippled by the PM’s surgical strike leading to currency crisis.

Finance Minister Yanamala Ramakrishnudu, who held a review meeting with his department a few days ago in the run to the H1 review, went on record saying the state economy has been suffering a whopping Rs 1,000 crore a month since the second week of November due to the problems associated with the availability of currency.

Faced with the looming gloomy scenario, the Chief Minister at the Collectors’ conference put up a brave front to meet the targets with a steely resolve.