Austerity clouds over Andhra as sagging finances belie Naidu tall talk
Andhra Pradesh Chief Minister N Chandrababu Naidu has very high ambitions, but his exchequer is almost empty. He wants Amaravati to emerge as a world-class capital but his finance minister, Yanamala Ramakrishnudu, talks in despair while commenting on state’s finances, indicating that he may have to go in for overdraft.
Nothing could be more explicit than this contrast which sums up Naidu’s far-reaching ambitions and the stark realities in the state.
The other day Naidu was in Delhi, delivering a lecture on urbanisation and how he wants Amaravati and Andhra Pradesh to become hubs for a technology revolution. At the India Economic Summit organised there by the World Economic Forum and the CII, he spoke at length about the critical role urban planning should play in ensuring balanced and equitable development. He wants the state to become one of the top three in India by 2022 and emerge with the highest happiness index by 2029 and as the most-preferred destination by 2050.
But his finance minister eschews this bombastic talk. He is down to earth and keeps cautioning about the abysmal depths to which the state’s finances are sinking with each passing day. After presiding over a half-yearly review of the finances two days ago, Ramakrishnudu sent out a grim warning that the state may have to adopt strict austerity measures. He looked very tired apparently because his repeated calls for austerity had fallen on deaf ears.
Even as the finance department issued orders prescribing austerity measures after the state inherited a Rs 16,000-crore revenue deficit post the bifurcation, several ministers and babus kept jetting around the globe on one mission or the other, despite orders to the contrary.
Though Amaravati funding will have to come from the Centre and foreign investors, the tall talk of how the city will emerge as a spectacular capital sounds a little odd when the finance department is trying to make both ends meet.
Though the Centre has promised funds not only for Amaravati but for several other projects listed in the AP State Reorganisation Act, 2014, it has not yet released any substantial sums so far. The government estimated that it would require Rs 1,20,000 crore for Amaravati in the next 20 years and Rs 42,935 crore for building essential infrastructure, and government buildings, including the Raj Bhavan, Secretariat, High Court and an Assembly and a Legislative Council. But the Centre has released only Rs 1,850 crore so far.
The health of state’s finances is being hit by profligate spending. Take for instance the two river festivals on which the government spent more than Rs 1,000 crore each. Or the Amaravati foundation-laying ceremony by Prime Minister Narendra Modi where more than Rs 100 core was lavished. Or the construction of the Rs 250-crore temporary secretariat at Velagapudi — Naidu wants employees to shift from Hyderabad immediately and not until Amaravati is ready.
That the state finances are bleeding is no secret and the figures speak for themselves. The gap between receipts and expenditure is widening by the day. It has touched a whopping Rs 6,403 crore. The receipts were Rs 58,912 crore and expenditure is Rs 65,315 crore during the first two quarters.
As the state is hard-pressed for liquid cash, it has been borrowing left right and centre. It has already borrowed Rs 13,673 crore as against the projected figure of Rs 20,097 crore for the entire fiscal. Of the Rs 13,673 crore, Rs 12,661 crore is meant for servicing past loans.
The annual revenue deficit was estimated at Rs 4,868 crore but it has already reached Rs 6,641 crore. The projected accumulated debt for 2016-17 is Rs 1.9 lakh crore which would be 27.88 per cent of the GSDP of the state as against the prescribed limit of 25 per cent. Welfare schemes continue to be major drain. The state government is now preparing to release Rs 3,000 crore towards the second instalment for DWCRA (Development of Women And Children in Rural Areas) groups as promised by Chandrababu Naidu to them. Adding to the haemorrhage is the government’s commitment of Rs 3,000 crore for social security pensions and Rs 2,700 crore for PDS.
What is more worrying is the fact that no one is bothered about the state’s finances except probably the finance minister. The spending spree is continuing. Though the chief minister, on more than one occasion, had said the employees should be prepared to work from under the shade of the trees, he has raised a wonderful building at Amaravati, which will serve as a temporary secretariat, at Rs 250 crore. Which means that when it comes to living in class, Naiud does not bother about purse strings. Whether or not he has money, he does whatever he wants to international standards. Even the swanky offices, be they in Vijayawada or Velagapudi, make one wonder if the state is really going through a financial nightmare.
R Prithvi Raj
Assistant Resident Editor, Andhra Pradesh
Email: raj@newindianexpress.com