Cash-strapped State goes into fire-fighting mode

Will propose deep cuts in revenue expenditure: Yanamala

With State finances in the red, the Finance Department is proposing a 10 to 15% cut in revenue expenditure. The Finance Department is also suggesting other departments not to ask for additional budget.

The department found that the revenue expenditure has been going up in the recent past though the receipts were not matching. It is estimated that the about 84% of the revenue receipts were being spent on establishment expenditure. Only 16% is being utilised as “productive expenditure.”

In fact, revenue expenditure has been showing an upward trend since 2010-11 barring 2015-16 financial year. It was ₹78,534 crore during 2010-11 and touched ₹1,10,374.49 crore by 2013-14. It was ₹1,14,986 in 2014-15, year of bifurcation of Andhra Pradesh. Revenue expenditure, however, was pegged at ₹93,520 crore in the following year, 2015-16. Again, the expenditure touched ₹1,12,306 crore in 2016-17. The budget estimate of revenue expenditure is 2017-18 is ₹1,25,911 crore.

Widening gap

What worries the government is that increase in revenue expenditure will not lead to creation of assets in comparison with capital expenditure. Also, the revenue receipts were not growing on a par with the expenditure. The receipts were ₹93,553 crore in 2011-12 and rose to ₹1,07, 708 crore in 2016-17. Though revenue expenditure was pegged at ₹93,520 crore in 2015-16, the receipts were also low at ₹88,647 crore compared to previous year, which was lowest in recent past, sources say.

“We have been asking the government departments to control the revenue expenditure. In the coming budget, we propose to cut the revenue expenditure by 10 to 15%,” says Finance Minister Yanamala Ramakrishnudu. Any expenditure should result in asset creation. The government is focusing on it, he explains.

The departments such as Roads and Buildings, Irrigation, and Municipal Administration were asking for additional funds. The Ministers and Secretaries need to understand that finances were difficult to come by. They would have to stick to the approved budget and spend accordingly. Later on they can seek additional funds, he says. Income from the Stamps and Registration Department was not on expected lines though revenue from the Excise Department was satisfactory.