The looming debt crisis in Andhra Pradesh once again came to the fore following the latest budget for 2021-`22. The Jaganmohan Reddy Government has proposed to limit its loans this year to just Rs. 31,251 Cr. This is over Rs. 22,820 Cr less when compared to the overall Rs. 54,071 Cr loans taken by the Government during the previous year, 2020-`21. On the other hand, the State revenues are not showing a promising growth.

Now, questions are being raised how the Chief Minister can go ahead with his multi-crore welfare promises without taking maximum loans possible. Considering the past track record, the YCP regime has taken more loans than it has projected in the past two years.

In 2020-`21, the Government set the loans limit at Rs. 3.48 lakh Cr but it has taken over Rs. 6,876 Cr additionally. It would have taken more loans but could not be possible because of lack of support from the open market. In 2019-`20 also, the Government said the overall debt burden would only reach Rs. 2.91 lakh Cr. However, it had taken Rs. 10,457 Cr additionally.

A greater challenge to the Jagan regime was how to reduce debt burden as a percentage of the state GDP. Already as per its latest estimates, the percentage reached 36.46 percent. This indicated the deepening financial crisis in the State. Any additional loans more than the estimates would push the State into bankruptcy.