Andhra Pradesh Chief Minister Jagan Mohan Reddy. (Photo: Twitter/File)
Amaravati: Andhra Pradesh's revenues showed a buoyant growth at the end of the third quarter (Q3) of the 2021-22 financial year but the overall economic situation remained beyond alarming because of a 918 per cent revenue deficit, coupled with a 156.93 per cent fiscal deficit.
At the end of Q3, the state's revenues touched Rs 97,887.21 crore, an increase of Rs 18,797.94 crore over the corresponding period in 2020-21.
The state's own tax revenue was up by a significant Rs 16,232 crore by the end of December 2021, reaching Rs 69,943.71 crore, according to the State Accounts released by the Comptroller and Auditor General.
Interestingly, the state government borrowed Rs 58,111.85 crore in the first 9 months of the current financial year but it was Rs 10,424.58 crore less than the loans secured during the corresponding period last year.
But the state's fiscal deficit of Rs 58,111.85 crore has already surpassed the targeted Rs 37,029.79 crore, which was 156.93 per cent to the Budget estimate, the CAG pointed out.
Similarly, the revenue deficit rocketed to Rs 45,907.65 crore against the projected Rs 5,000.06 crore, which was a 918.14 per cent jump.
On one hand there is buoyancy with higher income but the mounting revenue and fiscal deficits to unprecedented levels is something beyond alarming, a senior Finance Department official observed.
Ours has become a consumption-driven economy and that is showing up in the form of higher GST collections.
Over the past couple of months, GST revenue has been growing at a steady 25 per cent while the compounded annual growth rate is over nine per cent, the official pointed out.
GST revenue in Q3 was Rs 23,386.89 crore, a growth of Rs 5,700.63 crore compared to last year.
GST apart, the Value-Added Tax on fuels and liquor has been keeping the state coffers brimming.
The state earned Rs 6,792.74 crore more in Q3 than the previous year from fuel and liquor tax.
While the revenues are on an upward scale, so is the revenue expenditure in the form of freebies and interest payments, not only negating the growth but also plunging the state economy into a morass, finance officials lament.
What all we earn, goes into only three things: salaries and pensions, debt servicing and the freebie schemes. Not a rupee for anything else, a top finance official pointed out.
That is reflected in the continued decline in the all-important capital expenditure front where the state spent only Rs 11,137.82 crore in three quarters, a drop of Rs 6,816.32 crore over the previous year.
With barely four per cent spent on capital (development) works every month, we may not even accomplish 50 per cent of the budgeted Rs 30,571.53 crore during the year, the official noted.
Meanwhile, the CAG said the AP government did not furnish details about the guarantees it extended to state-run corporations and public sector undertakings for securing loans.
The state government has also not provided information on the borrowings from the public account.
This has become a major controversy in the state with the opposition parties too demanding that the Jagan Mohan Reddy government publish a white paper on the borrowings.
The principal opposition Telugu Desam Party said the state's total debt touched Rs 7.30 lakh crore.
In the last 32 months alone, the Jagan government borrowed so heavily to the tune of Rs 3,71,756 crore, Leader of Opposition in the Legislative Council Yanamala Ramakrishnudu pointed out.
The Assembly Public Accounts Committee Chairman Payyavula Keshav said the state borrowed twice the limit permitted under the Fiscal Responsibility and Budget Management Act.
Let the Finance Minister release a white paper on the loans secured directly by the government and also through various corporations, Keshav demanded.
Reacting to the allegations, Finance Minister Buggana Rajendranath hit back at the TDP saying the state's economy was ruined during its regime.
"COVID-19 has badly hit our state's economy. We lost Rs 8,000 crore revenue last financial year besides spending Rs 7,120 crore on COVID-19 control measures. We are strictly following the FRBM norms and implementing the budget," Rajendranath said.