In the month of November alone, the government borrowed Rs 13,001 crore to foot the freebies bill.
Against the targeted Rs 18,434.15 crore for the entire financial year, the revenue deficit shot up to Rs 57,925.47 crore by the end of November itself.
The state government borrowed Rs 9226.375 crore on an average per month so far during the 2020-21 financial year.
The current borrowing trend indicated that the state government may raise a loan of at least another Rs 30,000 crore by the end of March 2021, taking the total borrowing to over Rs 1.04 lakh crore in the 2020-21 financial year, sources in the Finance Department said.
APs debt burden was Rs 97,000 crore at the time of bifurcation in June 2014. In five years (till 2019 March), it peaked to Rs 2,58,928 crore.
From April 2019 to November 2020, Rs 1,14,212.81 crore was taken as loan from banks and other sources, with Rs 1,06,866.25 crore of it secured by the Y S Jagan Mohan Reddy regime since June 2019, the sources said.
In the first eight months of the current financial year, the state government incurred a revenue expenditure of Rs 70,082.90 crore, almost all of which went towards the numerous freebie schemes of the ruling YSR Congress.
Earlier, the Jaganmohan Reddy regime had imposed taxes and cess totalling around Rs 21,000 crore on people, citing shortfall in revenues due to Covid-induced lockdown.
Despite the lockdown during the first quarter of the fiscal, the states revenue touched Rs 46,589 crore by November, just about Rs 4,500 crore short compared to the corresponding period in the previous year.
The state also got Rs 8,000 crore extra in grants from the Centre compared to the corresponding period.
The government created a new entity called State Development Corporation exclusively to raise loans and it so far secured Rs 10,000 crore from SBI, Canara Bank and Punjab National Bank, Finance department sources added.
The administration is waiting for the SBI to release another tranche of Rs 3,000 crore loan as yet another cycle of freebies starts with the Rs 6,500 crore Amma Vodi scheme under which over 43 lakh mothers would be paid Rs 15,000 each for sending their kids to school.
But only Rs 14,000 will be actually paid to the mothers as the government will deduct Rs 1,000 towards Toilet Development Fund.
“The way things are going reminds me of a Telugu movie we were shown during training in the Lal Bahadur Shastri National Academy of Administration. It’s something like Appu Chesi…which means living off debts,” a senior IAS officer noted.
Senior bureaucrats point out that the state will have to shell out close to Rs 35,000 crore per annum from the next fiscal only towards interest on the existing loans.
“Given our own resources, the Central grants and outgoing towards salaries, pensions and the various doles, we will be required to raise more loans even for debt servicing. That’s what you call the classic debt trap,” a top bureaucrat lamented.
Former Finance Minister Yanamala Ramakrishnudu expressed anguish over the state’s financial condition as the fiscal deficit was about to touch Rs 1,10,320 crore.
“In the last 19 months, the government borrowed Rs 1.5 lakh crore besides imposing a tax burden of Rs 75,000 crore on people.
This, despite a six per cent growth in revenue in the first six months of the current fiscal,” Yanamala pointed out.
AP has now become the state with maximum borrowing and minimum development because of the ‘crooked policies’ of Jaganmohan Reddy, the Leader of Opposition in the Legislative Council said.
When contacted, Finance Minister Buggana Rajendranath Reddy did not respond to queries on the state finances.