A.P. budget exposes huge fiscal deficit

Deficit projected at Rs.12,064 crore for the financial year and reduced plan outlay

August 20, 2014 10:24 pm | Updated June 02, 2016 12:43 am IST - HYDERABAD:

Finance Minister Y. Ramakrishnudu presenting the budget in the A.P. Assembly in Hyderabad on Wednesday. Photo: PTI

Finance Minister Y. Ramakrishnudu presenting the budget in the A.P. Assembly in Hyderabad on Wednesday. Photo: PTI

Finance Minister Yanamala Ramakrishnudu presented Andhra Pradesh’s maiden budget of Rs. 1.11 lakh crore for 2014-15 to the Legislative Assembly, which clearly lists the precarious fiscal position it has inherited and dependence on Centre’s munificence. 

The first indication of the financial difficulties was in the way the fiscal deficit was projected at Rs.12,064 crore for remaining part of the financial year and reduced plan outlay. The budget comprised non-plan expenditure of Rs. 85,151 crore and plan expenditure of Rs. 26,673 crore.

The Finance Minister who presented a tax free budget attributed the shortfalls faced by the State to the ‘irrational and unscientific manner’ in which the then UPA government went ahead with the bifurcation of the State. Against a revenue surplus of Rs. 1,128 crore in 2012-13 and Rs. 1,023 crore in 2013-14, the government estimated a revenue deficit of Rs. 6,064 crore (1.16 per cent of Gross State Domestic Product). The fiscal deficit of Rs. 12,064 crore worked out to 2.3 per cent of GSDP.

The Finance Minister tried to strike a fine balance between welfare and development. Accordingly, school education secured a major chunk of allocation at Rs. 12,595 crore followed by irrigation Rs. 8,465 crore and energy Rs. 7,164 crore. Backward classes welfare has been allotted Rs. 3,130 crore and tribal welfare Rs. 1,150 crore while minority welfare department secured an allocation of Rs. 371 crore. 

The budget estimates include receipts and expenditure of two months relating to undivided State of A.P. and the anticipated additional assistance of Rs. 14,500 crore from the Centre post-bifurcation.

Mr. Ramakrishnudu lamented that there were technical difficulties in estimating revenue receipts with reasonable accuracy. The budget presented the financial status of the combined State for the first two months and new State for the remaining ten months. As a result, the estimates of receipts and expenditure and the revenue and fiscal deficit figures got impacted making it highly difficult for the State to comply with the norms prescribed by the Andhra Pradesh Fiscal Responsibility and Budget Management Act. This was already brought to the notice of the Central government.

 

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