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 2021-2022 financial year. A steady increase in revenue receipts, aided by hike in taxes and Central grants, brought no cheer to the administration as all other revenue streams seem to have dried up, Finance Department authorities lament.
Deficit in just 6 months stood at Rs. 33,100 crore
According to CAG’s accounts for the first half of the fiscal, the state’s total receipts touched 1,04,804.91 crore, including Rs 39,914.18 crore 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.
In the 2021-22 Budget, the state projected a revenue deficit of Rs. 5,000.08 crore but between April and September alone it shot up to Rs 33,140.62 crore (662.80 per cent). The revenue deficit in FY21 (full) was Rs 35,540.44 crore against the projected Rs 18,434.15 crore.
The state targeted to borrow a sum of Rs 37,029.79 crore during the financial year but within the first six months it obtained loans to the tune of Rs 39,914.18 crore.
Financial crash imminent?
When the top officials of the Finance Department held their routine internal meeting recently to take stock of the situation, the topic hotly debated was the timing of the ‘crash.’ “The (financial) crash has to happen. But when, is the question. There is no question of if,” one bureaucrat noted.
In the first half of the current fiscal, the state’s revenue receipts touched Rs 64,871.69 crore, a Rs 19,956.17 crore increase compared to the corresponding period last year. The state’s tax revenue went up by Rs 15,050.77 crore to Rs 44,987.16 crore and the Central grants rose by Rs 4,438.77 crore to Rs 18,117.56 crore.
But, the state incurred a capital expenditure of only Rs 6,419.51 crore, which was Rs 2,912.39 crore less compared to the corresponding period last year. The government, in fact, provisioned a sum of Rs 30,571.53 crore for capital works this year.
“It is obvious that we are not taking up any development work, with the focus being only on direct money transfer schemes. Last year, the budgeted amount for capital works was Rs 29,300.42 crore but only Rs 18,385.49 crore was actually spent,” a finance department official said.
Officials, however, feel the second half of the financial year might make things a little better as the government is focusing on improved tax collections. That could reduce the revenue deficit to some extent but the fiscal deficit might scale to a new peak, bringing in a financial emergency very soon into the state.