Deccan Chronicle

Chandrababu Naidu govt presents first Budget, says bifurcation had huge impact of AP finances

Deccan Chronicle | DC Correspondent

Published on: March 12, 2015 | Updated on: Invalid date

‘Andhra Pradesh not even left with reasonable resources for a meaningful plan outlay’

Andhra Pradesh Finance Minister Y Ramakrishnudu presenting the Budget (Photo: Facebook)

Andhra Pradesh Finance Minister Y Ramakrishnudu presenting the Budget (Photo: Facebook)

Hyderabad: In its first full-fledged Budget 2015-16, the Andhra Pradesh government on Thursday presented a Rs 1,13,049 crore Budget with an estimated non-plan expenditure of Rs 78,637 crore and plan expenditure of Rs 34,412 crore, projecting a revenue deficit of Rs 7,300 crore.

The bifurcation of undivided Andhra Pradesh had a massive impact on the state's finances, AP State Finance Minister Y Ramakrishnudu said in his Budget speech. "The honourable members are also aware that there has been a huge impact of state bifurcation on state finances and that the state is not even left with reasonable resources for a meaningful plan outlay."

"Even after taking into account devolution on account of 14th Finance Commission recommendations and expected resource flow out of Union Budget 2015-16, the state continues to reel under revenue deficit. This deficit continues even after the last year of the award of 14th Finance Commission," Ramakrishnudu said.

AP State Finance Minister proposed an expenditure of Rs 1,13,049 crore -- an estimated non-plan expenditure of Rs 78,637 crore and plan expenditure of Rs 34,412 crore. The debt burden and fiscal deficit will continue to increase as borrowings to meet revenue expenditure continue, he said.

"We had requested 14th Finance Commission to provide us with a grant of Rs 1,00,213 crore for capital construction and Rs 41,253 crore for other critical infrastructure requirements. The 14th Finance Commission has provided only Rs 22,113 crore as revenue deficit grant and Rs 1,823 crore towards disaster management."

"As against the requirement of Rs 29,805 crore for urban local bodies projected by us only Rs 3,636 crore has been provided and rural local bodies as against the requirement of Rs 18,633 crore only Rs 8,654 crore has been provided," he said.

Observing that the state has also suffered blows in the form of the devastating Cyclone Hudhud and drought in large parts of the state, he said that the government is moving ahead to realise the dream of a 'Swarna (golden) Andhra Pradesh'. 

The state Finance Minister further said in his Budget speech that the government's tax and non-tax revenues are barely sufficient to meet salaries, pensions and non-salary expenditure commitments.

"Our non-tax resource base is very low," he said. Having received no relief from the 14th Finance Commission, the allocation to the state in the budget for 2015-16 is not up to expectations, he said.

"As a result of difficulties mentioned above, we are constrained to present a budget with a modest increase over the year 2014-15. It is a matter of significance that the projected tax to Gross State Domestic Product (GSDP) ratio as per the report of 14th Finance Commission for Andhra Pradesh is 7.98 per cent whereas for Telangana, it is 9.99 per cent for the year 2015-16."

The tax to GSDP ratio is expected to go up to 8.41 per cent by the year 2019-20 for Andhra Pradesh whereas by the same year the ratio for Telangana is expected to touch 10.26 per cent," Ramakrishnudu said. However, the government has taken care to protect the interests of vulnerable sections, agriculture, irrigation, social and physical infrastructure, while making allocations, he said.

Though the total increase in the size of the AP state Budget from Rs 1,11,823 crore to Rs 1,13,048 crore is only 1.1 per cent, the increase in plan budget from Rs 26,672 crore to Rs 34,412 crore, which is 29.02 per cent and increase in capital budget from Rs 7,069 crore to Rs 9,818 crore which is 38.88 per cent, is a significant achievement, he said.

"We have actually been able to bring down non-plan expenditure from Rs 85,151 crore to Rs 78,636 crore and non-plan revenue expenditure from Rs 78,976 crore to Rs 73,223 crore," he said.

The AP government plans to explore possibilities to increase non-tax revenues as it would not impose any tax burden on the people. In a positive impact of "growth-enabling initiatives recently taken by the government", the state, as per advance estimates, has recorded a growth of 7.21 per cent during the year 2014-15.

Observing that the overall objective of the government is to eliminate poverty and reduce economic as well as social inequalities, the Budget said that the state government aims to be among the top three states in the country by 2022 and become the "number one state" by 2029.

The AP government has launched seven missions like the primary sector mission, social empowerment mission, knowledge and skill development mission, urban development mission, industry sector mission, infrastructure mission and service sector mission, besides five campaigns like Swachh Andhra as well as five grids projects like the water grid, road grid, power grid, natural gas grid and fibre optics grid.

In order to boost the agriculture sector, a separate Agriculture Budget, which is a part of the general budget would be presented in the Legislative Assembly on Friday.

The state government's proposed allocations to various sectors include -- school education Rs 14,962 crore, rural development Rs 8,212 crore, law and order 4,062 crore and energy Rs 4,360 crore.

Other major allocations are: higher education Rs 3,049 crore; healthcare Rs 5,728 crore; civil supplies Rs 2,459 crore; social welfare Rs 2,123 crore; irrigation Rs 5,258 crore; backward classes welfare Rs 3,231 crore; Panchayat Raj Rs 3,296 crore and roads Rs 2,960 crore. The Budget proposed an allocation of Rs 3,168 crore for urban development, including development of new state capital.

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