Hyderabad: The sword of fiscal deficit is hanging over AP, forcing the government to find ways of tightening its belt, taking some austerity measures and maybe amending the Fiscal Responsibility and Budget Management (FRBM) Act. The state is now thirsty for more loans to implement development projects and welfare schemes.
Finance minister Yanamala Ramakri-shnudu said on Thursday that his priority was to contain expenditure as the government is facing a revenue deficit. He said the state government will ask the Centre to amend the FBRM Act and relax certain fiscal parameters in order to increase AP’s borrowing capacity.
The FRBM Act currently limits the amount the funds-starved new state can borrow in order to fund its new capital and make good on its election promises like the farm loan waiver. “We are preparing a financial action plan to implement promises we made, including the farm loan waiver. We will get clarity on June 22, after the interim report,” he said.
“In this state economic crisis, if we can’t control expenditure, we can’t bail out the state. I am planning to curb unproductive expenditure,” he said.
