The State government defended its huge external borrowings and claimed that it was making most productive usage of debt in an interesting debate during Question Hour in the Assembly on Thursday.
The government patted itself by stating that it was in position to get higher credit (loans) as it was more productive than the previous TDP dispensation, while the Opposition said the government was turning Andhra Pradesh into a debt-ridden State.
Responding to a question posed by R. Chandrasekhar Reddy, P. Raghunatha Reddy and others of TDP, Finance Minister Anam Ramanarayana Reddy said the government had borrowed Rs. 95,609 crores from 2004-05 to 2010-11 and it would have to repay the loan with an interest of Rs. 86,085 crore in 7 to 25 years. Prior to 2004, the TDP government had borrowed Rs. 58,137 crore from 1994-95 to 2003-04 with an interest burden of Rs. 43,668 crore.
The TDP members alleged that most of the borrowings by the Congress government were spent on irrigation projects without creating any new irrigation potential so far and it helped in the increase of per capita debt to Rs. 20,200. Jayaprakash Narayan of Lok Satta said debt was being spent on many unviable schemes like lift irrigation projects requiring recurring expenditure of about Rs. 20,000 crore per year for political gains.
Reacting sharply to the observations, the Minister explained that their government had increased per capita income from Rs. 18,573 to Rs. 71,540. Capital expenditure in borrowings was only 76.89 per cent in 2003-04, while it had improved to 160 pc during 2004-05 to 2008-09 and 127 pc in the next three years.
It would clearly indicate that it was the TDP government that had been spending debt for cosmetic use (unproductive purposes).