The Andhra Pradesh government is all set to present its Rs 1-lakh-crore-plus annual Budget on February 23. However, in doing so, the government seems to be only fuelling the aspirations of people with little resources to back the budgetary commitments.
“In fact, this Rs 1-lakh-crore figure has been bothering me ever since the Budget size was jacked up to this level three years ago. Now, everybody thinks that the government is not willing to spend on their needs in spite of having Rs 1 lakh crore in its kitty,” said a senior minister, who is negotiating with the agitating engineering colleges on the release of money towards reimbursement of tuition fee of 2.4 million students for the current year.
With the matter reaching the Supreme Court, the government is struggling to find a way out by at least paying a part of the whopping Rs 3,500 crore bill. “As far as I know, the state exchequer gets only about Rs 76,000 crore through all means, including grants and devolution from the Centre. Even if we add 10 per cent to this figure, it would not be more than Rs 90,000 crore next financial year,” the minister said.
The total expenditure in any given fiscal in the past three years has never been more than Rs 90,000 crore. The government is expected to further inflate the size of the Budget that may touch the Rs 1.25-lakh-crore-mark as compared with Rs 1.13 lakh crore of the current annual Budget on immediate compulsions.
Though the bills on subsidies and welfare programmes are getting bigger by the day, the government has not been able to make up for the gap as revenue targets are being partly met. One-time revenues such as Rs 6,700 crore that came through sale of land in 2007-08 seem no longer possible.
The immediate fallout of increased non-plan spending reflects on the irrigation projects, which stood about Rs 5,500 crore so far as compared with Rs 15,000 crore allocated in the current year.
On the question of government compromising on its Plan priorities, an official in the state finance department said it was due to additional financial burden that it had to bear on account of additional expenditure, including input subsidy to farmers. “When it comes to the Budget size, you can straight away take out Rs 10,000 crore, including Rs 7,000 crore being shown as contra interest and Rs 3,000 crore of ways and means amount, which the government does not intend to use. The net expenditure will be what the government has at its disposal,” he said.
With the state finances likely to turn revenue deficit next financial year, the finance department is working overtime to balance the estimates on capital and revenue expenditure in the ensuing annual Budget.
Moreover, the Centre has not been releasing funds under different heads as it had done during the YSR regime, according to an official involved in the Budget preparation.
“Leave alone the paltry releases under the Accelerated Irrigation Benefit Programme, the Centre did not even allow us to raise the allotted quota of funds through market borrowing,” the official told Business Standard.
So far, the state government could raise Rs 10,000 from markets as against Rs 13,700 crore permitted as a percentage of gross state domestic product (GSDP), according to him.
