Three budgets that tell their own tale

V Rishi Kumar Hyderabad | Updated on September 06, 2019 Published on September 06, 2019

Anam Ramnarayan Reddy, finance minister of united AP   -  BUSINESS LINE

Eatala Rajender, former finance minister, Telangana   -  Special Arrangement

Yanamala Ramakrishnudu, former finance minister, AP   -  THE HINDU

A study of budgets of unified AP, AP and Telangana shows not only mounting debt but also rising income

This is a tale of three budgets: of the unified Andhra Pradesh in 2013-14, and of the two successor Telugu States — Andhra Pradesh and Telangana — in 2018-19.

The tenures of Andhra Pradesh Chief Minister N Chandrababu Naidu and Telangana Chief Minister K Chandrasekhar Rao saw the individual Budgets ballooning more than that of the unified entity, and their debt too has simultaneously zoomed.

An analysis of the budget presented in the then unified AP in 2013-14 and of the separate States four years after their formation, shows that both have grown significantly, but they have also piled up huge debt, a worrisome aspect from a macro-economic perspective. When Anam Ramnarayan Reddy, the finance minister of united AP presented the Budget for 2013-14, the total expenditure was pegged at ₹1,61,346 crore as against ₹1,45,854 crore in the previous year. Public debt then was ₹1,48,743 crore, amounting to 28.25 per cent of the Gross State Domestic Product.

In contrast, Yanamala Ramakrishnudu in 2018-19 had presented a budget of ₹1,91,000 crore for the truncated AP.

Likewise, in the same year, the budget presented by Eatala Rajender, Finance Minister of Telangana had programmed an outlay of ₹1,71,453 crore. The budgets of both States had outgrown that of the unified State.

Debt at alarming levels

Also, in the five years since their formation in June 2014, their debt has grown to alarming proportions.

AP’s debt has gone up from ₹1,48,743 crore in 2014-15 ( 28.25 per cent of the GSDP) to ₹2,49,435 crore in 2018-19 (28.66 per cent). For Telangana, the outstanding debt has gone up from ₹93,115 crore as of 2015-16 (16.18 per cent of the GSDP) to ₹1,80,238 crore (21.39 per cent of the GSDP.)

Per capita income soars

State Socio Economic Surveys show that while the State budgets swelled and their investments showed upward trend, the per capita income (PCI) numbers, a measure of living standard of the people, have also risen significantly for both States as against the all India numbers.

As per CSO guidelines, the PCI is estimated by dividing the Net State Domestic Product (NSDP) with midyear projected State population.

In the United AP, the PCI in 2013-14 was estimated at ₹85,797, up 14 per cent over ₹76,041 in the year before period as against the all India average estimated at ₹74,380. This has now grown to ₹1,64,025 in 2018-19 as against ₹1,43,936 a year before.

In the case of Telangana, the PCI is much higher than the all India figures over the years. It has grown from ₹1,12,162 in 2013-14 to ₹1,75,534 in the year 2017-18 as against the all India PCI of ₹63,462 in 2011-12 and ₹1,12,764 in the year 2017-18.

Given the focus of both States on welfare measures, those watching the developments closely believe that the capital investments could have been much more than what was allocated in the past five years.

Published on September 06, 2019

A letter from the Editor

Dear Readers,

The coronavirus crisis has changed the world completely in the last few months. All of us have been locked into our homes, economic activity has come to a near standstill. Everyone has been impacted.

Including your favourite business and financial newspaper. Our printing and distribution chains have been severely disrupted across the country, leaving readers without access to newspapers. Newspaper delivery agents have also been unable to service their customers because of multiple restrictions.

In these difficult times, we, at BusinessLine have been working continuously every day so that you are informed about all the developments – whether on the pandemic, on policy responses, or the impact on the world of business and finance. Our team has been working round the clock to keep track of developments so that you – the reader – gets accurate information and actionable insights so that you can protect your jobs, businesses, finances and investments.

We are trying our best to ensure the newspaper reaches your hands every day. We have also ensured that even if your paper is not delivered, you can access BusinessLine in the e-paper format – just as it appears in print. Our website and apps too, are updated every minute, so that you can access the information you want anywhere, anytime.

But all this comes at a heavy cost. As you are aware, the lockdowns have wiped out almost all our entire revenue stream. Sustaining our quality journalism has become extremely challenging. That we have managed so far is thanks to your support. I thank all our subscribers – print and digital – for your support.

I appeal to all or readers to help us navigate these challenging times and help sustain one of the truly independent and credible voices in the world of Indian journalism. Doing so is easy. You can help us enormously simply by subscribing to our digital or e-paper editions. We offer several affordable subscription plans for our website, which includes Portfolio, our investment advisory section that offers rich investment advice from our highly qualified, in-house Research Bureau, the only such team in the Indian newspaper industry.

A little help from you can make a huge difference to the cause of quality journalism!

Support Quality Journalism
This article is closed for comments.
Please Email the Editor
You have read 1 out of 3 free articles for this week. For full access, please subscribe and get unlimited access to all sections.