Andhra Pradesh’s public debt has risen to ₹2,25,234 crore in the current financial year in the absence of any special assistance from the Centre.

During 2016-17, the total debt of the state was ₹2,01,314 crore. Market loans have a lion’s share in the debt, accounting for 60 per cent, followed by other sources at 24 per cent. Loans from the Centre constitute only 4 per cent of total outstanding debt. The market borrowings stood at ₹1,12630 crore.

Joint debt

The debt outstanding is 28.79 per cent of the State Gross Domestic Product (GSDP). As per government data, the outstanding debt includes the un-apportioned amount of ₹23,483 crore between Andhra Pradesh and Telangana. Andhra Pradesh is paying ₹14, 756 crore as interest.

On a comparative note, Telangana, which is a revenue surplus State, has ₹1.24 lakh crore debt, which accounts for about 21 per cent of GSDP.

The State’s own tax revenue, in which sales tax accounted for 62 per cent, is ₹52,717 crore in financial year 2017-18 while non-tax revenue was ₹5,347 crore.

Central transfers

In terms of the Central transfers, the State, which is alleging “negligence” by the Centre in allocation of funds to meet the post-bifurcation needs, has not received much other than the regular fund flow. The Central transfers as per the 14 th Finance Commission (FC) recommendation stood at ₹36,202 crore in FY 2017-18. In the two preceeding years, Central transfers as per FC norms were ₹33,630 crore and ₹34,309 crore during 2015-16 and 2016-17 respectively.

The Plan assistance stood at ₹28,747 crore in the present financial year while non-Plan grants were only at ₹3,100 crore.

The Normal Central Assistance (NCA) was subsumed in the increased rate of tax devolution (from 32 to 42 per cent by the 14th FC) from 2015-16 onwards and hence there has been no special benefit for AP under this head.

Andhra Pradesh was one of the States determined to be revenue-deficit, and the Commission recommended that the Centre provide revenue deficit grant for the period of the 14th Finance Commission. The amount of deficit for each year was mentioned in the report itself and a total of ₹22,113 crore is to be paid to Andhra Pradesh as revenue deficit grant for the 5-year period.

Centre’s claim

A part of the revenue gap compensation amounting to ₹3,979 crore has already been paid and the balance is being paid in annual instalments, the Centre claims. But this still leaves a huge gap to be bridged.

It remains to be be seen how Andhra Pradesh will meet the expenditure needs and tide over the debt burden.