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Bifurcation blues persist for AP

Bifurcation blues persist for AP
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Highlights

That there has been a huge impact of State bifurcation on the State Finance and that the State is not even left with reasonable resources for a meaningful plan outlay is quite evident.

Hyderabad: The residuary State of Andhra Pradesh is facing bifurcation blues and economic crisis. A State which used to be a revenue surplus has been pushed into a pathetic condition where it has a huge revenue deficit and the situation is unlikely to alter even after five years, according to Finance Minsiter Y Ramakrishnudu.

That there has been a huge impact of State bifurcation on the State Finance and that the State is not even left with reasonable resources for a meaningful plan outlay is quite evident.

The provisions made in the AP Reorganisation Act 2014 for the development of the State of Andhra Pradesh signify tokenism and they do not in any compensate the loss of opportunity for the people of Andhra Pradesh following bifurcation of the state. Income generation and employment opportunities, health and educational institutions, research and development and training facilities and social infrastructure are grossly inadequate in the residuary State. The decision to bifurcate the united state without even finalising the capital city itself signifies an epitome of irresponsibility, stresses Yanamala in his budget speech.

Even after taking into account the devolution on account of 14th Finance Commission recommendations and expected resource flow out of Union Budget 2015-16, the State continues reel under revenue deficit and this deficit continues even after the last year of the award of 14th Finance Commission. "Our debt burden and fiscal deficit will continue to increase as we keep borrowing to meet revenue expenditures," says the AP Finance Minister. Andhra Pradesh had requested 14th Finance Commission to provide a grant of Rs 1,00,213 crore for the capital construction and Rs 41,253 crore for other critical infrastructure requirements. But the Commission provided only Rs 22,113 crore as revenue deficit grant and Rs 1,823 crore towards disaster management. As against the requirement of Rs 29,805 crore for Urban Local Bodies projected by the State, only Rs 3,636 crore has been provided and for Rural Local Bodies as against the requirement of Rs 18,633 crore, only Rs 8,654 crore have been provided.

“Our own tax and non-tax revenues are barely sufficient to meet our salaries, pensions and non-salary expenditure commitments. Our non-tax resource base is very low. The 14th Finance Commission did not consider the special problems faced by the successor State of Andhra Pradesh on account of bifurcation," rues the AP FM.

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