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The residual Andhra Pradesh state will have a revenue deficit of around Rs 7,500 crore for the financial year 2014-15.
The figure is arrived based on the region-wise income and expenditure data prepared for 2012-13 by the AP finance department. During 2012-13, the revenue deficit for Seemandhra stood at around Rs 6,400 crore. This is expected to grow 17.43 per cent or Rs 1,115 crore according to the latest revenue estimates presented in the vote-on-account Budget.
This gap would put serious limitations on the revenue expenditure and also narrow the window of borrowings if residual AP is not adequately compensated by virtue of the special category status promised by the Prime Minister, a senior official said.
“As it represents 58 per cent of the combined population, the de-merged AP will have to continue to spend more on the welfare programmes like fee reimbursement, which alone costs almost Rs 5,000 crore a year now. On the other hand, there is this revenue gap, which would not only continue to remain for years to come but also grow at the rate of 16 per cent if the average revenue growth of the combined state is considered,” the official, who refused to be named, told Business Standard.
The new Telangana state is likely to have a revenue surplus of around Rs 6,400 crore on the back of huge surpluses generated by Hyderabad and the surrounding Rangareddy district in the very first year of its birth, based on the similar projections.
For 2012-13, AP’s total income, which includes state’s own revenues, share in central taxes and central grants, stood at Rs 1.27 lakh crore. According to the finance department, the whole of Telangana region accounted for Rs 61,400 crore of this income while the expenditure for the year was Rs 56,000 crore. Similarly, the entire Seemandhra accounted for Rs 66,152 crore while expenditure was Rs 72,573 crore.
The likely revenue deficit and the revenue surplus situation of the respective states of Andhra and Telangana is arrived based on the growth in estimated revenue receipts (Rs 1,49,149 crore) in 2014-15 in relation to the 2012-13 figures.
If Telangana Rashtra Samithi (TRS) president K Chandrasekhara Rao wants to keep his promise of making the salaries of Telangana government staff on a par with that of the central government employees he can do it.
But if the same may not happen for their estranged brethren of residual Andhra Pradesh as its government would not not be in a position to take any extra financial burden.
The 27 per cent interim relief announced to the government staff last month by the Kiran Kumar Reddy government will alone require an additional Rs 7,681 crore for the full year, over and above the present salary bill of Rs 51,719 crore in the combined state. The residual AP will take more hit as everything, including the staff, will now shared on the basis of population.
However, on the power front ,Telangana will be sharing a larger portion of the Rs 5,000-crore subsidy burden as most of the free power is being currently given to the farmers of this region.
