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Andhra Pradesh’s debts have increased exponentially under the YCP government’s rule and reached a staggering Rs 8.51 lakh crore.
Apparently, the Fiscal Responsibility and Budget Management (FRBM) Act which is considered to act as a deterrent on the borrowing powers of the states had ceased to check the YCP government from searching for alternative sources to borrow money. This is due to the provisions in the Money Bill which allow budget and financial bills to get cleared easily, said economist and ex-vice chairman of AP State Planning Board C. Kutumba Rao.
The FRBM Act was introduced in 2003-2004 and the Centre took a resolution to end the revenue deficit by 2008 but it gradually got postponed till 2025. This means the Centre itself is in a fund crisis and cannot limit the states to follow the rules. In fact, violation of the FRBM Act does not attract any serious action either on the states or on the Centre, he revealed. Borrowing loans is not a fault as long as the state spends it to create assets which can help the future generations earn livelihood.
However, the YCP government which has set a target to spend Rs 31,000 crore under capital expenditure, which is supposed to be spent on development works, for 2022-23 spent only a meagre Rs 4,500 crore till August.
The imbalance in the ratio of money being borrowed and the expenditure on capital expenditure is a worrisome factor, he said. The debts have crossed the roof but capital expenditure remains to be abysmally low in AP, lamented the financial expert.
Of the Rs 8.51 lakh crore, Rs 4.15 lakh cr is public debt while Rs 1.38 lakh crore was borrowed through various government entities.
Reminding about finance minister Buggana Rajendranath’s press conference on the debt buden left by the TDP government, Kutumba Rao said that it stood at Rs 18,000 crore in 2019.
Now, the pending bills have mounted to Rs 1.5 crore which can help one gauge the increased financial burden on the public in the last three years. This amount is included in the Rs 8.51 lakh crore debts the state had borrowed.
The huge debt burden indicates that the government will have to allocate at least 6-7 per cent of the State GDP for clearing the loans. In such a situation, the government cannot think of any capital expenditure, he pointed out.
These figures should help the public understand why the YCP government is neglecting development, said the opposition leaders.
Tags ANdhra Pradesh Andhra Pradesh Debts
