VIJAYAWADA: The State government on Tuesday said the outbreak of Covid-19 and the last minute sops announced and implemented by the previous TDP regime had resulted in increased borrowings. The government, however, said though it had to borrow heavily, unlike the previous regime, it did not borrow recklessly. Presenting the details of borrowings and the factors that led to the State to borrow more, the government said 2020-21 is an ‘extraordinary year’ during which the entire world has been subjected to pain and stress of unprecedented proportions.
“The global outbreak of Covid-19 pandemic necessitated governments to impose lockdown to contain the spread of the infection. This has resulted in an economic upheaval. The pandemic has taken a very heavy toll, both in terms of loss of life and economic burden,’’ the government said in a statement. To enable the economy regain its lost momentum as well as to protect people from the deadly virus, the government had to incur heavy expenditure despite the steep fall in revenue. “Consequently, there was an over-reliance on debt,” the statement said, adding that the Centre was forced to make a borrowing of Rs 18,48,655 crore this fiscal, which is the highest in the country’s history.
As a consequence of lockdown, the Real GDP contracted by 23.9 per cent during the first quarter of the financial year compared to the corresponding period of the previous year. Andhra Pradesh faced many more disabilities with unjust bifurcation, non-fulfilment of the commitments made to the State, misgovernance and policy paralysis during 2014-19. As a result, the State’s borrowings during the five year period of the TDP regime reached alarming levels, it stated.
The previous TDP government hurriedly introduced welfare schemes and disbursed the benefit amount to people just days before the Assembly elections in 2019 and spent Rs 6,000 crore during the first 10 days of April 2019. Making a comparison between the debts raised by the Centre and the AP government during 2014-19, the statement said the Centre’s debt had increased by 49.92 per cent whereas the State debt had gone up by a whopping 132.31 per cent.
Adding to this, the State had been left with outstanding payables to the tune of Rs 39,000 crore as on March 31, 2019 due to the ‘misgovernance’ during 2014-19. The off-budget borrowings were to the tune of Rs 58,000 crore and the debt in the books of the power sector corporations had increased from Rs 33,587.98 crore to Rs 70,254 crore over the five year period.
Further, dues by Discoms to the power generators had increased from Rs 2,893,23 crore to Rs 21,540.96 crore during 2014-19. The alarming increase in liabilities of the State during 2014-19 led to servicing cost of the debt increase to more than Rs 25,000 crore. The borrowings, however, did not support productive expenditure and owing to the misgovernance during 2014-19, sectors such as agriculture, health and education had fared poorly. Though agriculture debt waiver was promised by the previous government, which was to the tune of Rs 87,612 crore as on March 31, 2014, the then government limited the waiver amount to Rs 24,000 crore and of that only close to Rs 15,300 crore was actually disbursed to farmers.The YSRC government formulated may interventions to ensure progress in all the sectors.
Modernisation and upgradation of education infrastructure, introduction of English as a medium of instruction, improving existing medical colleges and construction of new medical colleges, financial incentives to mothers for sending their children to school, financial support to mothers of students pursuing higher education, investment support to farmers and woman empowerment are some of the initiatives taken by it and the government, even against impossible odds, has incurred the necessary expenditure and fulfilled all its commitments, the statement said.
Though the rural spending and consumption has taken a nosedive during the year across the country, the necessary impetus has been provided to private consumption in the State. Admitting that the State had to borrow heavily, the government said it did not borrow recklessly. The statement said the assessment of the financial loss to the State on a conservative basis would be Rs 21,500 crore. “The revenue loss on account of State’s share in Central taxes alone is Rs 7,780 crore and loss on account of State’s own revenue is Rs 6,961 crore, taking the total revenue loss to Rs 14,742 crore. The additional expenditure on account of the Covid-19 pandemic is close to Rs 6,700 crore. If the loss on account of lost opportunities is evaluated, it would be thousands of crores,’’ it said.
Debt burden
Centre
March 31, 2014 - Rs 56,48,471 crore
March 31, 2019 - Rs 84,68,085 crore
Debt growth - 49.92%
State Government
March 31, 2014 - Rs 1,11,528 crore
March 31, 2019 - Rs 2,59,087 cr ore
Debt growth - 132.31%