Andhra Pradesh is headed for a deep financial crisis given the huge gap between the estimated resources and expenditure in the last quarter of the financial year 2015-16.
While the expected total revenue including receipts from the Centre and State’s own revenue is about Rs.27,000 crore from January to March, the estimated expenditure including Plan (projects) and non-Plan expenditure comprising salaries, pensions and subsidies is around Rs.37,000 crore.
“We are staring at a revenue shortfall of Rs.17,000 crore to Rs.18,000 crore in the last quarter and it could have a huge impact on sustained development unless Centre without further delay releases Rs.12,000 crore revenue deficit grant pending for the year 2014-15,” official sources admitted.
Of Rs.14,430 crore revenue deficit finalised by the Accountant General for the year 2014-15, Centre so far sanctioned Rs.2,303 crore. While the State is banking on the provision in the AP State Reorganisation Act, 2014 that the Centre would make budget provision for revenue deficit of 2014-15 to bail it out of crisis, the Centre, according to sources, is not happy with the expenditure incurred by the State on various populist schemes. Debt redemption scheme for farmers, sops like Chandranna Kanukalu and release of Rs.1,500 crore towards industrial incentives of last several years at one go were some.
Niti Ayog Chairman Panagaria is believed to have submitted his report to the Prime Minister’s Office on the requirement of resources for the State and is under its consideration. “There is likelihood that the Centre may not accept certain expenditures incurred by the State if it chooses to analyse the expenditure. The other possibility is for political considerations, it may accept the AG’s recommendation and comply with the provisions of the Act,” sources added.
Some senior Government officials are actually surprised that Chief Minister N.Chandrababu Naidu who is known for his cautious approach in his earlier stint approved the runaway expenditure without sparing a thought for the State’s financial position which had been showing revenue shortfall in every quarter which worsened in the last quarter.
Andhra Pradesh, despite bifurcation woes, did not fare badly and registered a overall revenue growth of 10 to 12 per cent thanks to good revenues posted by Mining and Stamps and Registration. But the 10 per cent growth was just not enough to compensate the demands of the State both on revenue and development expenditure. State is struggling to release the second instalment of Rs.7,000 crore under debt relief to farmers.
The increase in salary bill after the 10{+t}{+h}Pay Commission to 3,400 crore from Rs.2,100 crore a month, various subsidies had huge implications on the revenue cushion State had. That the 35 per cent of total expenditure was on development projects was some solace.
“ We are looking at various options to ensure that development will not slow down- increase taxation, tighten the expenditure, prevail on people not to expect subsidies, so that precious resources could be spent on development projects to kick-start economic growth and which over time lead to revenue buoyancy,” sources said.
Headed for a deep financial crisis given the huge gap between the estimated resources and expenditure
