Andhra Pradesh Chief Minister Chandrababu Naidu is putting efforts to make people believe that there is rapid economic growth in the state, even after overcoming financial strains and steep fall in revenues following bifurcation and demonetisation. He has been claiming that the `reforms’ introduced by him helped the state to achieve record level of 12.23 per cent economic growth.
However, finance minister Yanamala Ramakrishnudu is not so comfortable with economic affairs of the state and is admitting that the financial position is “alarming” and in “deep trouble”. During pre-budget consultation, explaining the poor conditions of state finances, he expressed concern over sharp drop in revenues and an “extraordinary” hike in both fiscal and revenue deficits in the 2016-17 budget.
According to him the revenue deficit has been increasing abnormally. As against the budgetary estimate of 4,868 crore rupees, revenue deficit is shooting up to a staggering 14,134 crore rupees. Likewise, the fiscal deficit is touching 24,000 crore rupees against the estimated 20,497 crore rupees. This will be about 3.6 per cent to 4 per cent, much above the 3 per cent norm under the Fiscal Responsibility and Budget Management Act.
He also admitted the state’s revenue has decreased by seven per cent in December, as compared to November post demonetisation, but did not provide the exact amount of shortfall. “We are still computing the figures,” he added.
While AP’s budget for 2016-17 was pegged at Rs 1,35,688 crore, the government has already spent Rs 94,415 crore. The departments have now come up with fresh proposals for an additional expenditure of Rs 22,160 crore, over and above the budgetary allocations.
Expressing his inability to meet such demands, he said that the only option he has is to borrow heavily. He said that the government is seeking one per cent relaxation in the FRBM limit to be able to borrow, for which the Union Cabinet’s decision is awaited. However, he claims that the increased revenue expenditure exemplifies “good development”. “We are spending more on energy, infrastructure, capital city, water resources and panchayat raj and rural development. This is a good sign of development,” he added.
