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Yanamala presents gloomy picture, asserts loans must
Finance minister Yanamala Ramakrishnudu said the state’s economy was in critical condition due to the increasing debt burden of the government and efforts were on to overcome the situation.
Amaravati: Finance minister Yanamala Ramakrishnudu said the state’s economy was in critical condition due to the increasing debt burden of the government and efforts were on to overcome the situation. Replying to a discussion on public outstanding debt in the state in Assembly on Wednesday, Yanamala rejected the criticism of YSR Congress Party on rising debt burden in the last three years.
He said the borrowing in TDP rule was not as much as under Congress rule before 2014. “Borrowing is not bad provided it is used for capital purposes. We are borrowing for developmental and welfare schemes. As a result, the GSDP (Gross State Domestic Project) has increased in the last three-and-a-half years. So, borrowing in our government is inevitable,” he said.
The finance minister said that after the bifurcation, Rs 97,123.91 crore was apportioned to the residuary State of AP and Rs 67,842.33 crore had been added to the public debt between June 2, 2014 and October 31, 2017. Thus, the total outstanding public debt reached Rs 1,64,966.24 crore, the Minister said.
Accepting that the state finances had been under stress, he said it was due to increase in revenue and capital expenditures. “This is resulting in rise in expenditure commitments faster than revenue receipts, consequently increasing the debt burden of the government,” he said.
The state’s own revenues by the end of October have registered a growth rate of 12.57 per cent as against the Budget estimate projections of 19 per cent for the current financial year. Similarly, receipts from the Centre were likely to fall short of the target by about Rs 10,600 crore, he said.
Yanamala said the total revenue receipts, excluding borrowings, have increased only by 8 per cent whereas the revenue expenditure has increased by 1 per cent. “So, the revenue gap and the capital expenditure are being met with the borrowings,” he stated.
The minister said the state has been permitted to avail Rs 23,794 crore of net borrowings being 3 per cent of GSDP for current year. The borrowings were Rs 17,333 crore till October 31. “As AP’s borrowings crossed 3.5 per cent of GSDP, we requested the Centre for amending FRBM Act,” he said.
He also said the bifurcation of the state resulted in high revenue deficit and fiscal deficit for the residuary State of AP like never before. The revenue deficit was around Rs 17,000 crore for 2014-15 but the Centre did not accept it, he said. “The Centre has calculated that the revenue deficit was Rs 7,000 crore and released Rs 4,000 crore only. Now the Centre is indicating that it will give Rs 138 crore only,” he said.
The finance minister also said that recommendations of 14th Finance Commission were also not favourable to states though the Centre said that grant would be increased to the state as per those recommendations.
