Hyderabad: Andhra Pradesh government is worried over the prevailing drought situation for second consecutive year. The officials said the drought situation will have cascading effect on the state government revenue as well as on the people.
Officials said about six districts are facing drought situation in the state. Due to drought, the production of food grains will come down. At the same time per capita income and Gross Domestic production will also come down.
The state’s revenue through Vat and excise will have great impact. The state is getting Rs 2,500 crore from Vat and about Rs 600 crore through excise department every month.
If the people lack purchasing power, the sales of various goods will come down, and as a result, the state government’s revenue through Vat will have a negative impact.
The government has to depend for funds on the Centre or borrowings. In the first quarter, the government’s own tax and non- tax revenue is not bad.
Compared to last June, this year state government got around RS 1,200 crore more revenue. But in the coming months the state government will face financial crisis due to drought.
AP finance minister Yanamala Ramakrishnudu said if there is severe drought situation it will impact the state government’s revenue. He said, the business activity will come down government’s income will reduce and expenditure will increase.
However, Mr Ramakrishnudu said it is too early to predict on drought situation and have to wait and watch for some more time.
