VIJAYAWADA: The total outstanding debt of Andhra Pradesh by the end of 2021 financial year was more than Rs 3.60 lakh crore and it is estimated to cross the Rs 3.98 lakh crore-mark.In exact figures, the State had an outstanding debt of Rs 3,07,671.5 crore by the end of March 2020 and it went up to Rs 3,60,333.4 crore by March 2021. The debts are likely to increase to Rs 3,98,903.6 crore by March 2022.
Union Minister of Finance Nirmala Sitharaman gave these figures in the Lok Sabha on Monday, while replying to a question raised by a member, Kishan Kapoor, on the debt burden of the States.In her reply, the minister said instances of borrowings by certain State public sector undertakings (PSUs), special purpose vehicles (SPVs) and other equivalent instruments, where principal and/or interest are to be serviced out of the State budgets, had come to the notice of the Ministry of Finance.
“Considering the effect of bypassing the Net Borrowing Capacity (NBC) of the States by such borrowings, it was decided and communicated to the States in March 2022 that borrowings by State public sector companies/corporations, Special Purpose Vehicles (SPVs), and other equivalent instruments, where principal and/or interest are to be serviced out of the State Budgets and/or by assignment of taxes/cess or any other State’s revenue, shall be considered as borrowings made by the State itself for the purpose of issuing the consent under Article 293(3) of the Constitution of India,” she said.
With this, the Centre made it clear that if the interest or principal loan amount of any SPV or State PSU is serviced from the State Budget, it would be considered as borrowings made by the State government itself.
Further, the Finance minister said the Department of Expenditure of the Finance Ministry would exercise the powers to approve borrowings by States under Article 293 (3) of the Constitution of India.
“The normal NBC of each State is fixed by the Union government at the beginning of each financial year. Adjustments for the over-borrowing by States during previous years, if any, are made in the borrowing limits of subsequent years,” the Finance Minister said.
It may be recalled that recently the Special Secretary to CM (Finance & Economic Affairs) Duvvuri Krishna maintained that the debt situation of Andhra Pradesh in FY 2022 was quite encouraging.“The provisional figures released by the CAG convey that for the financial year 2021-22, the State government managed the State finances in the most fiscally prudent fashion with the revenue deficit being limited to Rs 8,370.51 crore and fiscal deficit to Rs 25,194.62 crore. This translates to a fiscal deficit to GSDP ratio of less than 2.10percent,” he had said.
At the time of bifurcation, the debt of the successor State of Andhra Pradesh was Rs 97,123 crore and when public account share was added to the same, the figure became Rs 1,20,556 crore.The debt, over the five years, increased to Rs 2,68,225 crore, he had elaborated.