 "AP presents Budget with Rs 7,000cr revenue deficit")
However, it kept the rise in spending to less than one per cent from 2014-15’s revised estimate (RE), to Rs 113,049 crore. And, projected a revenue deficit of Rs 7,300 crore.
This was the first full-year budget presentation after the state’s bifurcation into Telangana and Andhra.
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“Our debt burden and fiscal deficit will continue to increase, as we keep borrowing to meet the revenue expenditure,” said Finance Minister Yanamala Ramakrishnudu.
He said the larger social goals such as elimination of poverty, reducing of inequalities and giving a thrust to infrastructure had guided his budget. The minister maintained the deficit would continue, as the state has little room to expand the revenue base. There were no new tax proposals.
According to the minister, the state's own tax and non-tax revenues are barely sufficient to meet the salaries, pensions and non-salary expenditure commitments. He assured members it was a realistic budget, while naming various welfare programmes and subsidies. “If we don’t borrow, we wouldn't be able to implement all these schemes,” he explained.
The government has provided Rs 4,300 crore towards farm loan waivers, Rs 4,230 crore for electricity subsidy, Rs 2,300 crore for a rice subsidy and huge allocations for social security pensions. An allocation of Rs 3,000 crore were made for the urban development department, including Rs 94 crore for land pooling for the new capital city.
The social sector received the highest allocation of Rs 14,904 crore, followed by Rs 10,424 crore for agriculture in the annual plan.
For the industrial sector, the government has allocated a Rs 100 crore venture capital fund, Rs 356 crore for disbursement of industrial incentives and Rs 40 crore towards power subsidy. The minister said he’d succeeded in reducing the non-plan expenditure, while increasing the plan allocations. About Rs 34,412 crore or 30 per cent of the total expenditure has been earmarked as plan spending, up from 20.3 per cent in the current financial year, in the RE.
The revised estimates also show the spending as well as the resources are not in line with what the government had estimated during the time of presenting the Budget in August last year, covering the 10-month period post bifurcation.
During 2014-15, even though the government had missed the revenue target by Rs 8,000 crore, it had maintained the level of expenditure by increasing the market borrowings at Rs 18,532.94 crore, originally proposed at Rs 10,532.95 crore. Also the non-Plan expenditure rose at the expense of Plan expenditure, originally pegged at 23.85 per cent of the total Budget. This resulted in a steep rise in revenue deficit to Rs 14,242.57 crore as against the Budget estimate of Rs 6,063,59 crore in 2014-15.
For 2015-16, the fiscal deficit has been pegged at Rs 17,584.24 crore — maintaining the mandatory limit of 3 per cent of the GSDP. However, the fiscal deficit for the current year has shot up to Rs 20,320 crore reaching around 3.8 per cent of the GSDP, according to the revised estimates.
The Budget has projected just a 5 per cent growth in state’s own revenues for 2015-16, mainly due to lower non-tax revenue projections, at Rs 49,764.76 crore from Rs 47,396.50 crore in the current year. However, the state tax revenues are estimated to grow at 15 per cent. Total revenues, including the share in central taxes and the grants-in-aid for the year, are pegged at Rs 90,124.99 crore as compared with Rs 84,066 crore in the current year. According to the 14th Finance Commission’s report, the tax-GSDP ratio for Andhra Pradesh is 7.98 per cent as compared with 9.99 per cent for Telangana for 2015-16.
“The state is poised to achieve a higher growth trajectory in the coming years. Reflecting the positive impact of the growth enabling initiatives taken by the government, the state recorded a growth of 7.21 per cent during 2014-15,”the minister said citing the advance estimates for the year.
The minister said the provisions made in the AP Reorganisation Act, 2014, for the development of Andhra Pradesh signified tokenism and they might not in anyway compensate the loss of opportunity for the people of the state due to the division.