Amravati: Andhra Pradesh’s own tax revenue was Rs 16,372.97 crore higher in the first eight months of the 2021-22 financial year, as compared to the corresponding period in 2020-21, but the state’s revenue deficit zoomed to a worrisome 803.72 per cent by the end of November, the Comptroller and Auditor General (CAG) has stated.
Overall, there has been an 8.82 percent increase in the state’s revenue receipts between April and November 2021, touching a sum of Rs 88,618.58 crore, but still the government borrowed Rs 49,570.31 crore, a jump of 133.87 percent than the budgeted estimate of Rs 37,029.79 crore.
The latest figures of the state’s accounts released by CAG showed a revenue expenditure of Rs 1,28,805 crore, including Rs 13,779 crore as interest payment on loans.
In the form of welfare schemes, the state spent Rs 61,746.91 crore in the first eight months this financial year, leaving little for budgeted development schemes.
AP’s total borrowings and liabilities have now touched a staggering Rs 6,35,265.63 crore, as per the CAG account.
At the end of the first half of the current financial year, the state’s revenue deficit was 662.80 per cent and the fiscal deficit was 107.79 percent. They have now shot up to 803.62 and 133.87 per cent respectively, according to the CAG’s latest numbers.
Though the state targeted to spend Rs 30,571.53 crore during the year on capital works, only Rs 8,804.71 crore (28.80 percent) has actually been spent in the first eight months, indicating low infrastructure development.
The state has received significant grants from the Centre amounting to Rs 23,273.33 crore between April and November, a jump of more than Rs 5,000 crore compared to last year.
The revenue earnings front is certainly looking good, with enhanced tax revenue showing up. At the same time, it is perplexing that the revenue deficit is mounting to unimaginable and unmanageable levels, a senior official of a revenue-earning department observed.
The official pointed out that the revenue deficit normally comes down after the first few months in a financial year but in AP’s case it has only been scaling up in an abnormal fashion. A lot of course correction is inevitable to keep this trend in check. Else, it will be nothing but doom ahead, he warned.
Attributing the current financial situation in the state to “gross fiscal indiscipline”, former finance minister Yanamala Ramakrishnudu said the government led by Chief Minister Jagan Mohan Reddy violated all constitutional and Fiscal Responsibility and Budget Management (FRBM) Act norms.
The Centre stipulated that 64 percent of the borrowings should be spent on capital works but the Jagan government has only been indulging in unbridled revenue expenditure. Fiscal deficit has crossed 13 per cent of the Gross State Domestic Product (GSDP). The unmindful acts of the government have pushed AP into a serious economic crisis, Ramakrishnudu, who is now the Leader of Opposition in the Legislative Council, said.
He pointed out that government expenditure was not in line with the approved budgetary allocations. This government has been showing utter disdain for legislative propriety. All budgetary rules are being flouted with impunity. It is high time that the Centre intervenes and conducts a high-level review of AP’s financial management, the senior TDP leader said.
Finance Minister Buggana Rajendranath, however, blamed the peaking revenue deficit on the “legacy” left behind by the state’s bifurcation in 2014. From a revenue surplus state, we have been pushed into a revenue deficit because of legacy issues. The economic upheaval caused by COVID-19 has only compounded the crisis, Rajendranath claimed.
We are now trying to ensure a sustainable economic revival, despite the hardships, the Finance Minister added.