AP finances on right track despite odds

AP finances on right track despite odds
Highlights

Andhra Pradesh, despite bifurcation woes, has been able to maintain its finances on right track last fiscal by keeping its fiscal deficit at 2.82 per cent of Gross State Domestic Product (GSDP) and revenue deficit at 0.69 per cent.

Andhra Pradesh has contained fiscal deficit at 2.82% and revenue deficit at 0.69% last fiscal
The Revised Estimates for 2015-16 demonstrate that our performance during 2015-16 fiscal year was outstanding and as close to the original budget estimates as could be. This was unprecedented in the budget history of the State – Yanamala Ramakrishnudu AP Finance Minister

Hyderabad: Andhra Pradesh, despite bifurcation woes, has been able to maintain its finances on right track last fiscal by keeping its fiscal deficit at 2.82 per cent of Gross State Domestic Product (GSDP) and revenue deficit at 0.69 per cent.

“The Revised Estimates for 2015-16 demonstrate that our performance during 2015-16 fiscal year was outstanding and as close to the original budget estimates as could be. This was unprecedented in the budget history of the State,” AP Finance Minister Yanamala Ramakrishnudu said during his Budget speech for 2016-17 in Assembly on Thursday.

Accordingly, the revenue deficit for 2015-16 is around Rs 4,140.12 crore while the fiscal deficit for the same period is around Rs 17,004.91 crore, which amounts to 0.69 per cent and 2.82 per cent of the GSDP respectively, he added.

However, the State government has changed base year to 2011-2012 from the earlier 2004-05 to bring economic indicators in line with those of the central government. This move has partly helped the AP government in its fiscal consolidation efforts.

The revised estimates for the plan expenditure were Rs 73,544.65 crore, whereas the Plan expenditure was Rs 38,671.43 crore. While the revised estimates for the plan expenditure is 112 per cent of the estimated plan budget, the non-plan expenditure is just 93.5 per cent of the budget estimates. That means AP has managed to reduce its non-plan expenditure significantly.

“The non-plan expenditure was managed with the greatest diligence and without any explicit cuts, notwithstanding the fact that the State government employees and pensioners were sanctioned 43 per cent fitment, fourteen points higher than the level recommended by the tenth pay commission,” the Minister said.

Also, the Andhra Pradesh has made far-reaching changes in the way public finances are managed by the government. Comprehensive annual Budget Release Order (CBRO) has replaced the quarterly budget release system, eliminating the need for the departments to approach the Finance Department for funds every quarter.

It also ensured timely availability of funds at the time and place of requirement, which has resulted in increased utilisation of Plan resources and enhanced capital expenditure. “Above all, we have adhered to the statutory requirements of the Fiscal Responsibility and Budget Management (FRBM) Act, notwithstanding the difficult financial situation,” he added.

Meanwhile, the advance estimates for 2015-16 have put the GSDP of AP at Rs 6,03,376 crore and per capita income at Rs 1,07,532. The State achieved a growth of 10.5 per cent led by services (11.39 per cent) and industrial growth (11.13 per cent).

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