AP, Telangana pin hopes on Centre’s support

V Rishi Kumar Hyderabad | Updated on February 19, 2015 Published on February 19, 2015

Yanamala Ramakrishnudu, AP Finance Minister

Etela Rajender, Telangana Finance Minister

Both States set to finalise first full budgets for 2015-16

Telangana and Andhra Pradesh are at an advanced stage of finalising their first full budget for 2015-16, both expecting to outline their Plan outlay and strategy for the next four-five years.

Post bifurcation, they presented interim budgets and had hardly any time to get hold of the changed reality of two States.

Packages awaited

Both are banking on the Centre’s support as also a liberal approach from the Fourteenth Finance Commission to accelerate growth.

They expect the Centre and the Union Budget to provide additional funding and come out with development packages.

Assurances such as Special Status for AP, incentives for industries in AP and Telangana, made on the floor of the House during the passage of AP Reorganisation Act, are yet to be passed on.

Except for one package of incentives announced recently, nothing much has been forthcoming. This has put both States under financial stress.

AP, which started off with a deficit of ₹16,000 crore, has seen it shoot up to ₹20,000 crore.

The efforts of Chief Minister N Chandrababu Naidu in seeking the Centre’s support to bridge the deficit by requesting additional funds for capital and other infrastructure, have still not materialised.

During the Fourteenth Finance Commission meet, both States had petitioned the Commission to consider them for special treatment.

While Telangana has mentioned that revenues are below expectations, AP wants assurances made to be honoured for a level playing field.

The Finance Commission recommendations will play a big role over the next five years. Assurances made by Union Finance Minister Arun Jaitley to extend financial support are crucial.

Telangana Finance Minister Etela Rajendar and AP Finance Minister Yanamala Ramakrishnudu have concluded majority of the meetings in charting out the budget.

AP has hinted at a zero-based budget where funds are allocated after reviewing the progress of works to keep a tight leash on treasury.

Different challenges

Both States are faced with different challenges. While revenue flow has not been encouraging, fund requirement has shot up.

Allocations for asset creation and capital formation are major challenges, apart from tackling the power sector problem, Telangana in particular. It would have to foot in a bigger bill to meet additional purchases to bridge the deficit. The idea of both States holding the Budget session around the same time in a common premise is also a matter of concern.

Published on February 19, 2015
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