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Debt-fuelled welfare a new norm
Hyderabad ranks second in India's ultrarich list (Representational Image)
Andhra Pradesh’s revenue deficit soared by an unprecedented662.80 per cent while the fiscal deficit was up 107.79 per cent in the firsthalf of the 2021-'22 financial year.
Andhra Pradesh's revenue deficit soared by an unprecedented 662.80 per cent while the fiscal deficit was up 107.79 per cent in the first half of the 2021-'22 financial year. According to CAG's accounts for the first half of the fiscal, AP's total receipts touched 1,04,804.91 crore, including Rs 39,914.18crore borrowings. However, half of the earnings (Rs 50,419.15 crore) have been used for welfare freebie schemes while interest payment (on old loans) and subsidy bills, along with salaries and pensions, rounded off the total expenditure of 1,04,723.91 crore, according to CAG accounts.
The state government defended borrowing of amounts against the backdrop of severe pandemic but stressed that the amounts directly went into the hands of people which helped the public to cope with the financial crisis induced by Covid-19.AP government has this argument: The Union government's CAGR(compounded annual growth rate) was 9.78 per cent during 2014-19 and during thesame period, the debt of the Andhra Pradesh government led by the TDP was at a CAGRof 17.33 per cent which was significantly higher (almost double) but now despite borrowing of amounts, the CAGR was 15.26 per cent which was lower than17.15 per cent of the Union government.
It seeks to highlight the point that there are no complaints of misuse or siphoning off of funds. The misgovernance and expenditure profligacy of the TDP government had resulted in the undue swelling of the liabilities of the state, it keep reiterating, is its justification. The public is not aware of these nuances nor does it seek tounderstand the economic compulsions that force the government to resort to borrowings.
It only understands that the state government is continuously borrowing. For people, it does not matter which party is in power as long asthe bad economy does not hurt them directly. Governance is a continuous affair. They repose their trustin the bureaucracy and face the consequences. It is up to the ruling parties tothink long term and steer the policies accordingly. Welfare measures are always welcome. However, the spiralling debts should be checked at the right time.AP has had the misfortune of not so good governance, the debts explain. Should it continue? Political acumen is good for the parties andthe leaders but not for the State.The year 2021 has not augured well financially for the residuary state of AP.
