Vijayawada: Economists and financial experts are voicing different opinions over finance minister Yanamala Ramakrishnudu’s statement on increase in the state’s revenue and fiscal deficit. According to government documents, the administrative expenditure has not increased since no employment opportunities were provided, and there was no sanctioning of dearness allowance.
Only Rs 3,120 crore was allocated to the loan wavier scheme. The subsidy account shows that there was a decline in this account. Pensions were pruned. The Budget had mentioned 17 per cent increase in the allocation to school education but in its report the finance ministry stated that 1,200 schools were being closed down and some would be handed over to corporate groups. There were no recruitments made to the education sector. Hence, there was no question of increase in revenue expenditure, according to economists.
The finance minister said there would a huge revenue deficit this fiscal. In fact, there was no revenue deficit in the undivided state of Andhra Pradesh. Either due to higher-than-expected receipts or due to a cut in the allocated expenditure to various departments, the erstwhile governments appeared to have taken adequate care to ensure that the finances of the state did not land in a deficit.
In order to ensure efficient and equitable fiscal management and long-term macro-economic stability, the Union government had passed the Fiscal Responsibility and Budget Management (FRBM) Act-2003. The finance minister mentioned about this legislation, and the state government bypassed all norms in fiscal responsibility in maintaining the Budget assurances.
The total expenditure for 2016-17 was estimated at Rs 1,35,689 crore, a 20.9 per cent increase over the revised estimate of 2015-16. In 2015-16, there was a decrease of Rs 833 crore (0.8 per cent) in the revised estimates over the Budget estimates. Total receipts (excluding borrowings) for 2016-17 were estimated at Rs 1,10,578 crore, an increase of 22.4 per cent over the revised estimates of 2015-16.
In 2015-16, total receipts fell short of the budgeted target by Rs 745 crore. Revenue deficit for 2016-17 is targeted at Rs 4,868 crore, or 0.7 per cent of the Gross State Domestic Product.
Though the allocation to some sectors increased quantitatively, the department of agriculture witnessed an 8.8 per cent decrease in allocation in 2016-17. The government has targeted industrial and job growth through investments worth Rs 11,500 crore, in 2016-17.
In the food-processing sector, it is targeting an investment of Rs 1,552 crore and the creation of 15,000 jobs in 2016-17. There is no such allocation and visible impact on the job creation in this sector.
Figures, claims don’t match up
Major and medium irrigation sectors were allocated '7,180 crore which includes Polavaram main canal. The allocation for the Polavaram project will come from the Centre. Economists are questioning how the state government would allocate money to this project.
The irrigation sector was the worst hit despite Chief Minister N. Chandrababu Naidu stating that there was tremendous growth in the agriculture sector, experts said. Only a paltry amount was allocated to the medical and health sector, which is in great need of funds. Though the government said in the Budget that there was a 64-per cent increase in allocation to this sector, the government hospitals are struggling to get minimum infrastructure.
The 14th Finance Commission had allocated Rs 1,463 crore to the panchayat raj sector. The government in turn has allocated very little money to the sector. In recent months, Mr Naidu mentioned many times that the state growth would be pegged at 15 per cent. But in the Budget, the government had mentioned that the growth at constant prices (adjusted for inflation) witnessed a decline from 6.6 per cent in 2005-10 to 4.9 per cent in 2010-15.
No investment was made in this state and no software company brought in money. No manufacturing unit was established. With all these statistics in its Budget documents, how can the government claim 15 per cent growth and increase in revenue expenditure, Professor of economics Dr L.S.N. Prasad said.
“The government has followed unethical Bud-get expenditure to push up the pseudo brand value of the Chief Minister. Other than that, there is no reason to increase the revenue expenditure,” Dr Prasad said. The reasons for the poor set of figures mentioned by finance minister Yanamala Ramakrishnudu, such as demonetisation and GST, affect all states similarly. AP is no exception, he added.
