AP Government Accuses Previous TDP Regime For Unprecedented Financial Mess

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New Delhi: The YSR Congress government accused the previous Telugu Desam Party regime headed by N Chandrababu Naidu of pushing the state into an unprecedented financial crisis and leaving it bankrupt.

“In the last five years after bifurcation of combined Andhra Pradesh, the TDP government had pushed the state into dark ages with its mis-governance, financial mismanagement and complete neglect of investment in human and physical capital, coupled with corruption,” state finance minister Buggana Rajendranath Reddy told reporters while releasing the white paper on the state’s financial position.

Reddy said the new government had inherited a bankrupt exchequer with a deficit of Rs 3.62 lakh crore, including outstanding debt of Rs 2.58 lakh crore, off-budget borrowings (contingent liabilities) of Rs 58,000 crore and outstanding dues of Rs 18,375 crore to power sector, Rs 10,000 crore to civil supplies department and Rs 18,000 crore to other departments.

He said the previous TDP regime had shown the worst performance on the financial front. The total tax revenues from the states’ own sources in the last five years were far below the expectations made by 14th Finance Commission which projected 10 per cent of the Gross State Domestic Product (GSDP). With respect to non-tax revenues, the State’s collection on per capita basis is one of the lowest in the country.

“The fiscal deficit which was 2.11 per cent in 2013–14 ballooned to 4.42 per cent in 2016-17 and reached an unsustainable level of 27.87 per cent of GSDP by 2016-17. Similarly, the revenue deficit which was Rs 16,078 crore during 2014-15 was supposed to be offset by the grants from the Centre, but the state could get only Rs. 3,979 crore. Now, post devolution of central grants, the revenue deficit stood at a whopping Rs 66,362 crore,” he said.

Reddy pointed out that the debt of Andhra Pradesh at the time of bifurcation was Rs 97,000 crore and it had reached a whopping Rs. 2,58,928 crore by 2018-19. The interest on the debt alone is projected to be over Rs. 20,000 crore per annum, in addition to the repayment of principal to the tune of another Rs. 20,000 crore. “Further, there are huge contingent liabilities in the form of guarantees given for loans availed by the state government entities,” he said.

The minister rejected the theory that the state had registered compounded annual growth rate (CAGR) of 10.36% in the past five years. “This growth was on the back of only two subsectors - livestock and fisheries. In fact, agriculture sector registered negative CAGR of 4.12 per cent, reflecting the deep crisis that has engulfed the farm families, leading to suicides and chronic rural distress,” he said.

 

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