Former Finance Minister and TDP Floor leader in the Legislative Council Yanamala Ramakrishnudu has said the Comptroller and Auditor General of India (CAG) has, in its State Finances Audit Report for the financial year ending March 31, 2022, unveiled a worrisome picture of the State’s financial position, which is projected by the Jagan Mohan Reddy government as a trail-blazer in spite of the ominous signs of it heading towards a disaster.
In a press release, Mr. Ramakrishnudu said the average capital expenditure of all other States was 14.41% during the FY 2021-22, but it was just 9.21% in Andhra Pradesh, whose debt stood at a staggering 40% of the GSDP against the Fiscal Responsibility and Budget Management (FRBM) norm of 20%.
The quantum of debt raised by the State in the last four years, the limit which it was not supposed to breach, and the payments made towards the principal thereof and interest rates were shrouded in secrecy.
Mr. Ramakrishnudu said the revenue deficit increased alarmingly and the off-budget borrowings amounting to ₹1,23,948 crore vindicated the TDP’s stand that the State was teetering on the brink of collapse.
It was a classic example of a debt trap, wriggling out of which was an uphill task, but the government would obviously pretend to have everything under control.
The CAG made it clear that 80% of the newly-raised loans were being used to service old debts.
“The government has no other option except to borrow from outside to keep itself afloat. It is evident from the fact that about 91% (₹97,000 crore) of the State’s annual revenue (₹1,06,000 crore) goes towards repayment of loans, salaries and pensions. The position is so precarious that the government diverted funds meant to be spent on disaster relief (especially drought mitigation),” the TDP leader added.
