Andhra Budget: Can Naidu govt keep tall promises amid fiscal challenges?

The Chandrababu Naidu-led Andhra Pradesh government has presented its much-delayed budget for the fiscal year 2024-25. The Budget, which covers only four months, has sparked discussions on the government’s priorities, fiscal constraints, and ability to fulfil its ambitious pre-election promises.

Reasons for delay

During The Federal discussion, economist Papa Rao noted that the delay stemmed from the transitional challenges between the outgoing YSR Congress Party (YSRCP) and the incoming Telugu Desam Party (TDP)-BJP coalition. The previous government had tabled a vote-on-account budget in February, leaving the Naidu government to inherit fiscal uncertainties.

However, Rao emphasized that the delay raised concerns over the new government’s intent to make a definitive policy statement.

Also read: Andhra Pradesh govt presents Rs 2.94-lakh-crore budget for FY25

Budget highlights and concerns

The budget provides limited scope for ambitious projects. Key announcements included increasing pensions from Rs 3,000 to Rs 4,000 and offering three free LPG cylinders annually for women. However, major promises under the “Super Six” scheme, such as unemployment allowances, 20 lakh job creations, and free bus travel for women, remain largely untouched.

Rao pointed out that while financial constraints are understandable, the lack of sincerity in fulfilling even partial promises undermines public trust. “A government can prioritize a few key promises if not all, but this budget has mostly sidestepped its commitments,” he observed.

Fiscal deficit and borrowing challenges

The state projects a fiscal deficit of 4.3 per cent, exceeding the Finance Commission’s recommended 3 per cent. This raises questions about Andhra Pradesh’s borrowing capacity and its ability to fund mega projects such as the Polavaram irrigation scheme and the Amaravati capital city project.

While Polavaram is a central project, Naidu’s government may request additional central funding. Similarly, Amaravati has seen a potential Rs 15,000 crore allocation from the Union government, signalling possible relief. Rao stressed the importance of leveraging the TDP’s alliance with the BJP-led central government to secure critical resources for these projects and overall state development.

Also read: Andhra CM launches free cooking gas cylinder scheme 'Deepam - 2'

Backward regions still await development

Backward areas such as Uttarandhra and Rayalaseema continue to struggle despite promises of special development packages. Rao highlighted the persistent neglect of these regions, urging the government to focus on making them self-sufficient and competitive with other districts.

The road ahead

The Naidu government faces a challenging path to balance fiscal discipline with ambitious promises. While its alliance with the BJP at the Centre may prove advantageous, realizing the aspirations set during the elections requires strategic prioritization and sincere implementation.

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