Andhra Pradesh (AP)’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.
“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 sources said.
According to CAG’s accounts for the first half of the fiscal, AP’s total receipts touched 1,04,804.91 crore, including ₹39,914.18 crore borrowings.
However, half of the earnings (₹50,419.15 crore) have been used for welfare freebie schemes, while interest payment (on old loans) and subsidy bill, along with salaries and pensions, rounded off the total expenditure of ₹1,04,723.91 crore, according to the CAG accounts.
In the 2021-22 Budget, the state projected a revenue deficit of ₹5,000.08 crore, but between April and September alone, it shot up to ₹33,140.62 crore (662.80 percent).
The revenue deficit in FY21 (full) was ₹35,540.44 crore, against the projected ₹18,434.15 crore.
The state targeted to borrow a sum of ₹37,029.79 crore during the financial year, but within the first six months, it obtained loans to the tune of ₹39,914.18 crore.
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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,” the bureaucrat noted.
In the first half of the current fiscal, the state’s revenue receipts touched ₹64,871.69 crore, a ₹19,956.17 crore increase compared to the corresponding period last year.
The state’s tax revenue went up by ₹15,050.77 crore to ₹44,987.16 crore, and the Central grants rose by ₹4,438.77 crore to ₹18,117.56 crore.
But the state incurred a capital expenditure of only ₹6,419.51 crore, which was ₹2,912.39 crore less compared to the corresponding period last year.
The government, in fact, provisioned a sum of ₹30,571.53 crore for capital works this year.
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“It is obvious that we are not taking up any development works, what with the focus being only on direct money transfer schemes. Last year, the budgeted amount for capital works was ₹29,300.42 crore, but only ₹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, which could reduce the revenue deficit to some extent but the fiscal deficit might scale a new peak.
(With inputs from Agencies)