Amidst a severe financial crisis, the Andhra Pradesh government has presented a tax-free Budget with an expenditure of R1.36 lakh crore for 2016-2017, an increase of 20% over last fiscal estimates to balance growth and welfare. This constitutes a non-plan expenditure estimated at R86,554.55 crore, an increase of 10% and the plan expenditure estimated at around R49,134.44 crore, which grew by 42.78% over last fiscal.
Presenting the Budget, finance minister Yanamala Ramakrishnudu in the Assembly said that the estimated revenue deficit is around R4,868.26 crore and the fiscal deficit is estimated at around R20,497.15 crore. The fiscal deficit will be around 2.99% of the GSDP whereas the revenue deficit is around 0.71% of the GSDP.
The finance minister said that the state received only R50 crore per district per year over the past two years for development of four Rayalseema and three north coastal districts. Besides, R850 crore for construction of Amaravati city, R345 crore for Polavaram project and R1,000 crore for water supply and drainage projects for Vijayawada and Guntur districts.
“Tax incentives for industrial development of the state, grants for construction of capital city and conferring special category status, which are all part of the AP Reorganisation Act 2014, have remained unfulfilled and causing severe strain on the state’s fiscal situation,” he said.
“We continue to carry a revenue deficit of R13,897 crore inherited from 2014-15 as a consequence of irrational bifurcation of the state,” he said. The division also resulted in the residuary state receiving 46% of the revenues of the combined entity with 58.3% of its population. This resulted in a revenue deficit of R16,200 crore in the first 10 months of the new state’s existence.
“We expect the Centre to step up its support to state development plan in the form of increased central assistance and special grants apart from R3,000 crore to partially offset the revenue deficit,” Ramakrishnudu said.