Nation Current Affairs 29 Sep 2017 Andhra government in ...

Andhra government in financial crisis, unable to clear pending bills

Published Sep 29, 2017, 1:56 am IST
Updated Sep 29, 2017, 8:15 am IST
Andhra Pradesh government’s own revenues fall short, it has borrowed two-third of limit.
Andhra Pradesh Chief Minister Chandrababu Naidu
 Andhra Pradesh Chief Minister Chandrababu Naidu

Hyderabad: The Andhra Pradesh government is in such a deep financial crisis that it is unable to clear pending bills.

In the annual Budget, the AP government had projected that at end of the financial year, the revenue deficit would be Rs 415.80 crore. According to finance department officials, the figure has already reached Rs 1,400 crore. 


Judging by the rate at which the revenue deficit is increasing, it is expected to touch an all-time high of Rs 10,000 crore at the end of 2017-18..

The income-expenditure sheet shows that the total expenditure was about Rs 64,000 crore. Of this, the revenue expenditure was more than Rs 57,000 crore and capital expenditure Rs 8,832 crore.

The state's tax and non-tax revenue failed to reach the target projected in the Budget. It had estimated that its own revenue would be Rs 26,343.41 crore but the actual revenue was only Rs 21,882 crore.


The state government had projected the non-tax revenue at Rs 2,497 crore but the actual revenue was Rs 1,986 crore. 

The large chunk of expenditure is towards bill payments. The state government has cleared Rs 13000 crore worth of pending bills of the previous financial year. In the current financial year, the state government has received bills to the tune of Rs 50,000 crore and has to clear bills amounting to about Rs 10,000 crore.

Failure to reach targets set in the state's own tax and non tax revenue structure combined with the absence of central government grants is compelling the state to depend on borrowings. The state government has already borrowed Rs 16,325.78 crore till the last week of September against the annual target of Rs 13,986.32 crore. 

The borrowing limit for 2017-18 is about Rs 24,000 crore according to Fiscal Responsibility and Budget Management Act. In the first five months, AP has borrowed two thirds of the limit and took Rs 1,500 crore ways and means advances.

A finance official said the Centre had to release Rs 4,000 crore as its GST share and grants. The Centre had released Rs 5,000 crore as grants two days back.

Location: India, Andhra Pradesh