Revenue deficit soars; AP govt on the edge

While the monthly revenue generated is Rs 5,000 cr, the expenditure varies between Rs 7,500 cr and Rs 8,000 cr

Hyderabad: The State government is all set to extend freezing of payments for some more time. Because, the expenditure is growing but, the revenues are not showing any major increase.

According to sources in the finance department, the monthly revenue from the revenue earning departments like commercial taxes, stamps and registration and geology and mines, nala tax from revenue and forest departments is coming to around Rs 5,000 crore per month. But the monthly expenditure bills stand between Rs 7,500 crore and Rs 8,000 crore. Thus, there is a deficit of about Rs 3,000 crore every month.

The major expenditure is the salary bill of the employees that comes to around Rs 3,500 crore. This is met mostly from the revenue generated by the Commercial Taxes Department. The remaining Rs 4,000 and odd crore expenditure has to be met from the revenue earned by the other revenue earning departments. However, revenues from these departments are not on expected lines. In particular, while the revenues from the departments like forest are meagre, except the Stamps and Registration, income from geology and mines and nala tax too are not up to the mark, the officials pointed out.

It was due to these factors that the government will have to go for Over Draft Facility from Reserve Bank of India (RBI) for three times. “The State government has to borrow Rs 1,500 crore from the open market and repay the OD it has taken from the RBI. That’s how it managed payment of salaries, clearing some urgent payments in September.

But, the situation did not change in October and it is likely to remain the same in November,” the sources added. In addition to the deficit, Andhra Pradesh had inherited following bifurcation, it has to bear an additional burden Rs 9,000 crore on account of various welfare schemes being implemented by it during the last 18 months with a tag of ‘Chandranna Kanuka’.

The government has taken up on its shoulders implementation of some major projects. For example, now it has to execute the Polavaram Irrigation Project. Though it is a national project, the State wants to implement it. This in turn made the State government to spend first from its resources, and send bills to the Centre, for reimbursement.

Shifting of administration from Hyderabad to Vijayawada, repayment of debt to farmers, DWACRA groups and weavers, promise to set up an exclusive corporation for Kapus with Rs 100 crore and several others are hanging on the head of the government to address in near future. On the top of it, the government is also proposing to take up development of new roads from Itchapuram to Tada for better road connectivity along the proposed industrial corridor. Road connectivity from Kurnool and Anantapur to Amaravati too need the state to foot its share of funds.

This situation is making Finance Minister Yanamala Ramakrishnudu and his team to invent a new mode of adjustment algorithm, divert, re-direct, adjust and re-adjust from one source to another to run the show and with whatever funds are coming from the Centre, the sources pointed out.

By:VRC Phaniharan