The State government is now striving for re-scheduling the debts, creating revenue and attracting private investments, says Chief Minister Chandrababu Naidu.
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Pointing out that Andhra Pradesh stands at 17th position among 18 States in India as per the newly introduced Fiscal Health Index 2025 prepared by the NITI Aayog for 2022-23 financial year, Chief Minister N. Chandrababu Naidu has expressed concern about the future of the State.
Addressing the media at the Secretariat on Monday, Mr. Naidu said that Andhra Pradesh was facing an ‘alarming situation which could lead to a debt trap’.
The State’s debt sustainability score reached zero by 2022-23 fiscal year from 22.7 in 2014-15 financial year. “The debt sustainability score becomes zero when the growth rate of interest payments is more than the Gross State Domestic Product (GSDP) growth rate, he explained.
“Reduced revenues, higher taxes, more borrowings, high debt servicing, decrease in capital expenditure and no productive investments are the reasons for this debt trap, which is a vicious cycle,” he said.
Discussing the final rankings of the 18 States with respect to Financial Health Index, Mr. Naidu said Odisha ranked 1st with 67.8 FHI score, Chhattishgarh at 2nd rank with 55.2 FHI score, Goa 3rd with 53.6 FHI score, Jharkhand at 4th with 51.6 FHI score, Gujarat at 5th with 50.5 FHI score.
“Even neighbouring Telangana got 8th rank with 43.6 FHI score, but Andhra Pradesh was at the 17th position with the FHI score of 20.9,” said the Chief Minister.
He explained that the assessment is based on five major sub-indices and nine minor sub-indices. The major sub-indices include quality of expenditure, revenue mobilization, fiscal prudence, debt index and debt sustainability.
Mr. Naidu said that Andhra Pradesh registered a poor performance in all indices during the tenure of YSRCP between 2019 and 2024 . He said despite the bifurcation problems, the State’s financial performance was good between 2014 and 2019 during the TDP’s tenure.
“Sustainable development is possible only through sustainable good governance. The State is now paying a heavy price for the YSRCP’s tenure,” Mr. Naidu said.
The Chief Minister said the capital expenditure had fallen to ₹7,044 crore during 2022-23 from ₹19,061 crore in 2018-19. “The State had miserably failed in generating revenue. Since 2018-19, the capital expenditure in social services and economic services sectors came down by 84.3% and 60.1%, respectively on a cumulative basis,” he said.
On the other hand, the share of committed expenditure, which includes expenditure on salaries, pensions, interest payments and administrative expenditure increased at an average annual rate of 11.6% in the last five years, resulting in limited availability of revenue for other purposes.
The revenue growth in the State came down to 9.8% in 2022-23 from 17.1% in 2018-19, necessitating more borrowings, he said.
The State lost at least ₹7 lakh crore because of the reduced growth rate which came down to 12.94% between 2019-2024 from 13.49% between 2014 and 2019. “Had the State continued the growth rate of 13.5%, it would have generated an additional revenue of ₹76,195 crore per year,” Mr. Naidu explained.
Per capita income
The per capita income of Andhra Pradesh declined heavily when compared with Telangana. Mr. Naidu said that the per capita income of the State was ₹2,42,479 for 2023-24 against Telangana’s ₹3,56,564 and all India’s ₹1,84,205.
Mr. Naidu said thanks to the Central government’s support, Andhra Pradesh is now able to spend money on capital expendintures such as the construction of Amaravati, Polavaram and other projects.
In the last seven months, the State has gathered investment commitments of more than ₹6.3 lakh crore which would generate employment for 4.2 lakh people.
“The State government has been striving to re-schedule the debts, increasing capital expenditure, creating revenue, attracting private investments and committed to increasing the GSDP growth,” Mr. Naidu added.
Published – January 27, 2025 09:16 pm IST
