Andhra Pradesh Finance minister Yanamala Ramakrishnudu, tells Ch V.M. Krishna Rao that all depend on the NDA government’s budget on July 10, and everything has become confusing post bifurcation.
How difficult is the financial situation of Andhra Pradesh?
We are really facing a tough time on finances. We will get an idea on how the Centre is going to help us when the Central Budget is presented on July 10. Everyone knew that while approving the State Bifurcation Bill in Rajya Sabha, the Centre gave some commitments on adjusting finances to AP. We are not in a position to know revenues and expenditures this year, again due to the division of the state.
That means you are depending on the Centre’s assistance in the July 10 Budget?
What can we do? It is the Centre which divided the state. It is the Centre which promised us help. So naturally we should look at the Centre and how they are going to meet their commitments. They had said earlier they will fill the Budget gap for the first year for AP. According to initial estimates of the Centre it is Rs 7,000 crore. But according to our estimates it is Rs16,600 crore. The exact amount will be known on July 10. Based on that we will proceed with our Budget here.
For getting Special Status or Category there is a process. The National Development Council consisting of all states need to approve this.
Who are the Chief Ministers who participate in the NDC? They are from UPA and NDA. The commitment was given by UPA government while passing the bill. So they will anyway agree to it. The NDA is at the helm now, and it is friendly towards us. So they won’t object.
What about generating your own revenues through taxation?
One thing is clear. We are not going to hike any taxes. My answer would be a firm ‘No’ on raising taxes at least this year. The Centre is also saying they will bring a single tax structure from this year. We have asked them to compensate the revenue loss on account of this and they have agreed. But there is total confusion this time due to the Bifurcation. So I am not in a position to tell you how our incomes and expenditure will be this year.
In that case your Budget this year will also be confusing?
Everything will be decided based on the Central Budget on July 10. I can tell you that my Budget this time will be an ‘adjustment’ Budget. You cannot expect miracles. From next year onwards, we will try to bring in reforms. Stringent measures will be taken to put everything back on the track.
What about your promise to waive farm loans? How much more time will it take to implement?
We have asked the RBI to reschedule farm loans as most of the mandals in AP were hit by floods, cyclones and drought last year. I think the RBI is going to allow rescheduling of loans. This means farmers need not pay now. Instead of the farmers, the AP government will pay the loans in five to seven years with 10 per cent interest. That is not going to be a problem for us.
If the RBI doesn't agree to rescheduling? What are the alternatives?
We may think of going for securitisation.
Why can’t you have a re-look at schemes that involve huge expenditures, so that you can raise more revenue?
You mean to say the welfare and subsidy schemes. We will not touch any of the welfare schemes that are being implemented.
According to you when will AP recover from this crisis and become financially viable?
If the Centre is going to fulfil all its promises, we will recover next year itself. We have heard that Centre may announce an industrial corridor between Chennai and Visakhapatnam in this Budget. If that is done we will be happy.
