AP Finance minister releases white paper on state finances

Two days ahead of presenting his first budget, Finance Minister Buggana Rajendranath Wednesday released a white paper on the State Finances, stating that the YS Jagan Mohan Reddy government inherited a "terribly mismanaged economy" from the previous dispensation that left the state with a staggering debt burden of Rs 3.62 lakh crore. Agriculture sector, the backbone of the state's economy, presented a dismal picture, registering negative growth in four fiscals through the overall Gross State Domestic Product (at current prices) for the year 2018-19 was expected to be Rs 9,33,402 crore as per advanced estimates.

"By any parameter, 2014-19 has been a bad period for Andhra Pradesh. While the unwanted bifurcation of the state was one reason, people didn't get the rule they wished for. The past five years of misgovernance, financial mismanagement, complete neglect of investment in human and physical capital, coupled with corruption, have pushed the state into the dark ages that were never experienced in its history," the State finance minister observed.

Noting that 2004-09 (when late Y S Rajasekhara Reddy was Chief Minister) was a golden period for the agriculture sector in the state when 5.07 percent growth was registered, Buggana said 2014-18 period was the worst as the growth sunk into the negative (4.12 percent). In 2014-15, the agriculture sector per se registered -0.35 percent growth followed by -12.28 percent and -7.36 percent in subsequent years.

In 2017-18, the sector turned around to witness 15.31 percent growth but slid once again to -9.83 percent in 2018-19 (advance estimates), the minister elaborated. He said the states revenue deficit stood at an aggregate Rs 66,000 crore at the end of 2018-19 fiscal.

"It is evident that the previous government has had little control over the revenue expenditure, which continued to grow unabated, as it failed to manage its finances efficiently and prudently in accordance with the established norms, despite receiving revenue deficit grant awarded by the 14th Finance Commission. Making matters worse, (the TDP) government used borrowed funds for financing revenue expenditure, which substantially reduced the resource availability for capital investment," Buggana pointed out.

This pushed critical sectors like education, health care, and nutritional services into an abysmal state, he added. Talking about the debt, the minister noted that APs burden was Rs 97,000 crore at the time of bifurcation in June 2014.

"In five years, it peaked to a whopping Rs 2,58,928 crore. Interest payment alone on the debt 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," he said.

Huge off-budget borrowings by various corporations floated by the state government pushed the aggregate debt to a staggering Rs 3.62 lakh crore, the minister said. "This is enormous but we have to slowly clear it.

Its a tough situation but we will face it boldly," Buggana said, adding that their government's emphasis would be on building human capital through a slew of welfare schemes. "Everything will be made public in my Budget. Just wait for two days," he said.

Buggana Rajendranath would present the annual budget for 2019-20 to the House at 11 am on July 12.