CAG flags heavy borrowings, Polavaram delays

Vijayawada: Andhra Pradesh relied heavily on borrowings from the Reserve Bank of India (RBI) during the 2024–25 financial year, maintaining the minimum cash balance without availing Ways and Means Advances (WMA) for only eight days, according to a report by the Comptroller and Auditor General (CAG) tabled in the Assembly on Friday.

The report stated that the state government availed Rs 1.72 lakh crore through Special Drawing Facility (SDF), Ways and Means Advances and overdrafts during the year, paying Rs 303 crore as interest. Of this, Rs 42,004 crore was drawn through SDF for 71 days with an interest payment of Rs 188.82 crore, Rs 73,897 crore through WMA for 179 days with`82.30 crore interest, and Rs 56,631 crore through overdrafts for 107 days with Rs 32 crore interest.

The CAG noted that the state’s revenue deficit remained at 3.75 per cent of Gross State Domestic Product (GSDP), exceeding the Fiscal Responsibility and Budget Management (FRBM) target of 2.7 per cent. The fiscal deficit also crossed the mandated ceiling of 4 per cent, reaching 5.05 per cent, pushing total borrowings to Rs 81,071 crore. The report observed that the high deficit forced the government to borrow even for day-to-day expenditure, increasing the interest burden and restricting fiscal space for capital spending and future growth.

Responding to the findings, TDP spokesperson Neelayapalem Vijay Kumar said the NDA government inherited a heavy debt burden from the previous YSRCP regime. He claimed that by the time the new government assumed office on June 10, 2024, borrowings had already touched ₹38,000 crore, and the remaining Rs 42,000 crore was raised during the rest of the year to manage pending liabilities such as unpaid contractor bills and employee dues.

The CAG report also flagged delays in the Polavaram Irrigation Project, noting that the headworks remained incomplete even after 17 years. Although works worth Rs 7,422.6 crore were awarded, only Rs 5,757.4 crore had been spent by March 2023. The audit further pointed out irregularities in tendering, incomplete land acquisition and slow rehabilitation of displaced families, while recommending transparent tender processes and adequate budgetary support for timely completion of the project.