Special Adviser Duvvuri Krishna has said the ‘actual achievement of AP to budget’ was 918%, which indicates the effectiveness of the fiscal policies of the State government.
Addressing the media on Tuesday, Mr. Krishna said the reports that the revenue deficit of the State had reached 918.4% of the annual budget was misleading and attempted to convey that the State’s financial condition was dire straits.
In contrast, the TDP government had reported an actual revenue deficit of ₹20,562.44 crore at the end of the first three quarters in 2016-17, ₹22,803 crore during 2017-18, and ₹18,824 crore during 2018-19, and the percent of actuals to be budgeted reached a whopping 5,484.28 in 2017-18, Mr. Krishna said.
“In the current financial year, the actual performance to the budget is 918%. The same source conveys that the actual performance during the corresponding period during the financial year 2017-18 was as high as a whopping 5,484%. These high deficit numbers during the TDP period were not during unstable times. As compared to that, the current period is quite chaotic, the pandemic necessitated imposition of restrictions in economic activity and this has a huge impact on the State’s finances. Therefore, one cannot find fault with the State government not being able to effectively project the figures at the time of the presentation of the budget,’’ said Mr. Krishna.
Pandemic blues
The pandemic had resulted in higher rates of revenue deficit, and the Central government’s revenue deficit to GDP ratio increased to 7.34% in the financial year 2020-21. The State’s share in Central taxes was projected to be ₹33,050 crore, which was almost the same as the amount received in 2018- 19, which translates to a loss of growth for almost four years.
Even a moderate year on year growth of 8% would have led to a revenue of ₹44,600 crore accruing to the State, increasing at that rate going forward. This loss of growth for such a prolonged period would have disastrous consequences on the State’s finances, he said.
Despite such odds, he said the government had kept its word and implemented all the welfare schemes, he added.
‘Debt inherited’
Further, the government had inherited a heavy debt. The debt of the combined State assigned to the government of the successor State of Andhra Pradesh was ₹97,123 crore. When the public accounts share was also added, it would be ₹1.20 lakh crore. Over the five years, it had increased to ₹2.68 lakh crore, he said.
The outstanding payables as on March 31, 2019 were ₹39,000 crore. The off-budget borrowings were ₹58,000 crore. They were ₹14,028 crores at the time of bifurcation.
In addition, the TDP government had “hurriedly” introduced schemes and disbursed amounts days before the 2019 general elections to “lure voters,” he alleged. The TDP government had spent a whopping ₹6,000 crore during the first 10 days of April 2019, he added.
Further, the TDP government had raised a whopping ₹5,000 crore through SDL auction on a single day on April 9, 2019, two days before the elections. This was possibly the highest debt any government would have raised on a single day. Nearly 15% of the annual limit for the financial year 2019-20 had been exhausted on the first day itself, Mr. Krishna said.
Arrears cleared
Further, the State government also cleared the arrears pertaining to the fee reimbursement programme for the years 2016-17, 2017-18 and 2018-19 aggregating to ₹1,880 crore, he said.
In spite of the financial constraints, the YSRCP government had credited ₹1.27 lakh crore directly into the accounts of the poor and the needy through Direct Benefit Transfer, he added.
The CAGR (Compounded Annual Growth Rate) of debt during the TDP period was 17.33% against 14.88% now, he said
“The economic slowdown and two years of the pandemic have resulted in steep increase of outstanding debt of the Central government from ₹90.83 lakh crore as on March 31, 2019 to ₹135.88 lakh crore as on March 31, 2022,” he said.
