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Tuesday, Aug 20, 2019

‘Chandrababu Naidu left Andhra bankrupt’, says white paper on finance

Andhra Pradesh finance minister Buggana Rajendranath Reddy said the previous TDP government had pushed the state into dark ages with its mis-governance, financial mismanagement and corruption

india Updated: Jul 10, 2019 19:52 IST
Srinivasa Rao Apparasu
Srinivasa Rao Apparasu
Hindustan Times, Hyderabad
The YSR Congress party government  has accused N Chandrababu Naidu’s regime of pushing the state into an unprecedented financial crisis and leaving it bankrupt.
The YSR Congress party government has accused N Chandrababu Naidu’s regime of pushing the state into an unprecedented financial crisis and leaving it bankrupt.
         

The YSR Congress party government on Wednesday accused the previous Telugu Desam Party regime headed by N Chandrababu Naidu of pushing the state into an unprecedented financial crisis and leaving it bankrupt.

“In the last five years after bifurcation of combined Andhra Pradesh, the TDP government had pushed the state into dark ages with its mis-governance, financial mismanagement and complete neglect of investment in human and physical capital, coupled with corruption,” state finance minister Buggana Rajendranath Reddy told reporters while releasing the white paper on the state’s financial position.

Reddy said the new government had inherited a bankrupt exchequer with a deficit of Rs 3.62 lakh crore, including outstanding debt of Rs 2.58 lakh crore, off-budget borrowings (contingent liabilities) of Rs 58,000 crore and outstanding dues of Rs 18,375 crore to power sector, Rs 10,000 crore to civil supplies department and Rs 18,000 crore to other departments.

He said the previous TDP regime had shown the worst performance on the financial front. The total tax revenues from the states’ own sources in the last five years were far below the expectations made by 14th Finance Commission which projected 10 per cent of the Gross State Domestic Product (GSDP). With respect to non-tax revenues, the State’s collection on per capita basis is one of the lowest in the country.

“The fiscal deficit which was 2.11 per cent in 2013–14 ballooned to 4.42 per cent in 2016-17 and reached an unsustainable level of 27.87 per cent of GSDP by 2016-17. Similarly, the revenue deficit which was Rs 16,078 crore during 2014-15 was supposed to be offset by the grants from the Centre, but the state could get only Rs. 3,979 crore. Now, post devolution of central grants, the revenue deficit stood at a whopping Rs 66,362 crore,” he said.

Reddy pointed out that the debt of Andhra Pradesh at the time of bifurcation was Rs 97,000 crore and it had reached a whopping Rs. 2,58,928 crore by 2018-19. The interest on the debt alone is projected to be over Rs. 20,000 crore per annum, in addition to the repayment of principal to the tune of another Rs. 20,000 crore. “Further, there are huge contingent liabilities in the form of guarantees given for loans availed by the state government entities,” he said.

The minister rejected the theory that the state had registered compounded annual growth rate (CAGR) of 10.36% in the past five years. “This growth was on the back of only two subsectors - livestock and fisheries. In fact, agriculture sector registered negative CAGR of 4.12 per cent, reflecting the deep crisis that has engulfed the farm families, leading to suicides and chronic rural distress,” he said.

Andhra Pradesh had registered negative growth rate in the manufacturing and service sectors as well, indicating that under-employment and unemployment reached its heights during the past five years.

“At a time when inflation at the national level had fallen from 9% to 4.5% on account of good monsoon and low global fuel prices, Andhra Pradesh recorded an average inflation was around 7.6%. The human development had fallen sharply owing to neglect of education, nutrition, health care, skills, employment, etc,” he said.

The minister said the new government had inherited a deeply indebted public financial system, empty treasury, and a gigantic debt, apart from unpaid bills amounting to more than Rs 16,000 crores. The state’s crippled financial situation is the biggest legacy of the previous government, he said.

“The resources are limited, the debt servicing obligations are overwhelmingly huge and the vast unavoidable liabilities had placed the government in an unenviable situation. In this background, this government has to address the much-neglected welfare, development and institutional needs of the State, meet the expectations of the people, and honour the commitments made to the people of the state,” Reddy said.

First Published: Jul 10, 2019 19:52 IST

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