The change of guard at the helm of the Finance Department is expected to bring in the much-needed reality check to keep the expenditure in line with the resource mobilisation capacity of the revenue-earning departments.
After bifurcation, Andhra Pradesh had been struggling to mobilise resources, its own revenues as well as allocations from the Centre. While the main revenue-earning departments — commercial taxes, excise and stamps and registrations— have been doing reasonably well, the Finance Department has been setting highly ambitious targets for these departments, sources said.
Unrealistic target
The three departments were given a target of earning an additional Rs. 11,000 crore for 2016-17 over and above that of last year which is not realistic. That means, the sources said, straight away there will be a minimum of Rs. 6,000-crore shortfall.
The Finance Department, on its part, has been stating that given the growth targets set by the government, it will not be in a position to allocate funds to infrastructure projects unless targets are also substantially increased for the revenue-earning departments.
Interestingly, Ajeya Kallam who is Special Chief Secretary, Commercial Taxes, Excise and Stamps and Registration, will also head the Finance following Friday’s administrative reshuffle. This would not only provide him a clear picture of the income but also the amount available for capital projects and accordingly balance the releases right from the first quarter.
Not much help
from Centre
But since the budget for 2016-17 is already passed with an outlay of Rs.1.35 lakh crore and allocations made on the basis of estimated revenue, which the sources say, is ambitious, the new finance head has to explore ways and means to mobilise additional resources.
The State government spent Rs. 18,000 crore more than the budgeted amount during 2015-16 with the hope that the Centre would release dues of Rs. 13,000 crore under revenue deficit compensation, a provision included in the AP State Reorganisation Act and other promised funds for Polavaram, capital construction, backward areas development, etc. The expected funds did not come and the State crossed its FRBM norm of 3 per cent of GSDP. The State has been requesting the Centre to relax FRBM norms in view of its special situation post bifurcation, but in vain.
