AP First Budget Pins Hopes on Central Funds and Grants

The first Budget of successor Andhra Pradesh state has focused on building the economy with the hope that it will get funds and grants from the Central government.

Published: 21st August 2014 06:00 AM  |   Last Updated: 21st August 2014 11:41 AM   |  A+A-

HYDERABAD: The first Budget of successor Andhra Pradesh state has focused on building the economy with the hope that it will get funds and grants from the Central government.

Despite “complexities and problems” of the new state to be dealt with, Finance Minister Yanamala Ramakrishnudu on Wednesday presented `1,11,823 crore tax free budget for the year 2014-15.

Ramakrishnudu has the privilege of presenting the first budget of AP. With his past experience of presenting the budgets of united AP state, Ramakrishnudu tried to overcome the problem of lack of resources with a firm commitment to re-draft the vision document 2020, which will set standards for a new paradigm in sync with the changed circumstances to place AP among the best three performing States in the country by 2022.

However, as it was not a full budget, but only for the next seven months, the Finance Minister decided to keep the non-plan expenditure intact. Of the `1.11 lakh crore budget, the non-plan expenditure is `85,151 crore and the plan expenditure is projected as `26,673 crore.

To augment the State’s finances, the Finance Minister hoped to get `16,000 crore Central grants to fill the revenue gap.

The Finance Minister, however, allocated funds for the newly announced schemes by the government, like NTR Sujala Sravanti and others.

“The United AP has been a surplus sate as far as non-plan revenue is concerned. Unfortunately, the division made the residuary AP a huge revenue deficit state on non-plan account. There is a huge impact of State bifurcation on State finances. Since the debt, employees, pensioners are allocated based on population ration, the expenditure naturally will be more than 58 percent of the United AP,” the Finance Minister said in his address.

“Overall revenue share of residuary state from tax and non-tax sources is estimated to be around 47 percent of the combined AP’s. The State is not left with reasonable resources for a meaningful plan outlay,” Yanamala stated.

In addition to skewed distribution of revenue, most of the critical infrastructure in socio and economic sectors is also going to Telangana, the Finance Minister said.

Despite the gloomy scenario, a fallout of division of AP, the Finance Minister in his concluding remarks stated that the Budget would initiate the process of building the new State on sound lines and pave way for taking rapid strides in the years to come.

“Our priority is inclusive growth in which equitable opportunities are advanced to all participants in the process of economic growth and benefits accrue to all sections of the society, particularly those belonging to vulnerable sections,” Yanamala  said.


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