Keshav cites efforts to bring AP’s economy back on track

Vijayawada:Finance Minister Payyavula Keshav has said the TD- led alliance government is making serious attempts to bring AP’s economy back on track from a “weak” five-year scenario.

“A stage had come when the government was having revenue only to pay wages for its staff, he claimed while replying to the general discussion on the state budget in the legislative council on Friday.

The minister said that out of state’s own revenue of 1,01 lakh crore during 2024-25, a whopping `89,008 crore was spent on salaries and pensions and wondered how a government could implement welfare and developmental schemes with no revenue.

He said that during the previous term of the Telugu Desam, economic growth including agriculture and service sectors was at 13.5 per cent, while under YSR Congress rule, it fell to 10.5 per cent. The decline in the growth of GSDP resulted in the state losing `6.94 lakh crore, he said.

“Had the state continued with the same growth rate of 13.5 per cent during 2019-24, it could have helped AP to get an additional revenue of `76,195 crore. Even if the Covid factor was taken into consideration, the additional revenue could have been of `52,197 crore.”

Referring to the capital investment for creation of wealth, the minister said that development of Pattiseema project at a cost of `16,500 crore helped generate wealth worth `44,000 crore as Godavari water was diverted for cultivation of crops not only in Krishna delta but even in Rayalaseema and north Andhra regions.

“Our government is in the process of taking up corrective measures to overcome the financial destruction. The YSR Congress government borrowed money at a high interest rate of 13.4 per cent against the normal rate of 7 to 8 per cent in the case of AP Power Company, he said.

“We are renegotiating with the bankers with March 31 as the deadline to reduce interest rate to 9 per cent,” he said.

He listed a series of steps to overcome financial trouble like debt swapping by negotiating afresh with the bankers for low interest rate, extended period of repayment and for moratorium on the loans for two to three years to get some breathing space.

The minister said that they were trying to avail central financial aid under Special Assistance to States for Capital Investment so that they need to repay principal amount only after 50 years with no interest at all for capital investment projects only. “We had brought `5,000-`6,000 crore so far,” he said.

He criticised the previous government for getting 95 central sponsored projects on the ratio of 60 per cent funding by the Centre and 40 per cent by the state government for capital expenditure, but failing to submit utilisation certificates for the 60 per cent money on these projects. This resulted in a situation of no funds to take the projects forward.

“We are now holding talks with the Centre to restore the funding,” he said.