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The alarming increase in liabilities of the Andhra Pradesh over the five year period 2014-19 has now become a problem with debt servicing cost at more than ₹25,000 crore.
According to the Jagan Mohan Reddy Government, “Owing to the misgovernance during the period 2014-19, sectors such as agriculture, health and education have fared poorly. The policies, programs and actions of the previous government deepened the agricultural distress, instead of alleviating the structural problem.”
To illustrate how the State debt zoomed, the Government stated that the AP debt which was at ₹1,11,528 crore in March 2014 had shot up by 132 per cent to ₹2,59,087 crore as of March 2019, with the debt going up by 18.36 per cent CAGR. During the same period, the Centre’s debt was up 49.92 per cent at ₹84,68,085.76, a CAGR of 8.44 per cent.
The Covid-19 pandemic has wrecked havoc on the State finances. Even if the assessment of the financial loss to the State is done on a conservative basis, a minimum loss of ₹21,500 crore has now been estimated. Revenue loss on account of State’s share in Central taxes alone is ₹7,780 crore and loss on account of State’s own revenues is ₹6,961 crore, taking the total revenue loss to ₹14,741 crore.
The additional expenditure due to the Covid-19 pandemic is estimated at ₹6,700 crore. If the loss on account of several lost opportunities is evaluated, it would additionally run into several thousands of crore, the State Finance Department said.
During 2020-21, the pandemic has taken a very heavy toll, both in terms of loss of lives and economic burden. To enable the economy to regain its lost momentum as well as to protect people from the deadly virus, the Governments had incurred heavy expenditure despite the steep fall in revenues.
Andhra Pradesh was facing many issues due to the unjust bifurcation, non-fulfilment of the commitments made,misgovernance and policy paralysis during the five-year period 2014-19 .
The borrowings during the period 2014-19 reached alarming levels.
The off-budget borrowings were estimated at ₹ 58,000 crore. In addition, the debt of the power sector corporations has increased from ₹33,588 crore to . ₹70,254 crore over the five year period 2014-19. The Discom dues to the power generators have increased from ₹2,893.23 crore to ₹21,540.96 crore during the five year period, 2014-19.
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