'Naidu Govt Left Terribly Managed Economy': Andhra Minister Releases White Paper on State's Finances

Amaravati: Two days ahead of presenting his first budget, Finance Minister Buggana Rajendranath on Wednesday released a white paper on the state's finances, stating that the YS Jagan Mohan Reddy government inherited a "terribly mismanaged economy" from the previous dispensation that left the state with a staggering debt burden of Rs 3.62 lakh crore.

Agriculture sector, the backbone of the state's economy, presented a dismal picture, registering negative growth in four fiscals though the overall Gross State Domestic Product (at current prices) for the year 2018-19 was expected to be Rs 9,33,402 crore as per advanced estimates.

“The previous government had said agriculture, industry and service sectors had grown, but when we dug into the details, aqua culture and livestock were also included in agriculture which is against the normal standard practice and does not sound convincing.

"By any parameter, 2014-19 has been a bad period for Andhra Pradesh. While the unwanted bifurcation of the state was one reason, people didn't get the rule they wished for. The past five years of mis-governance, financial mismanagement, complete neglect of investment in human and physical capital, coupled with corruption, have pushed the state into the dark ages that were never experienced in its history," the finance minister said.

“Tall claims were also made of industrial growth, but there was no corresponding increase in power utility which calls the bluff of the previous government. It had crossed all limits in raising loans and putting them to unproductive and needless use. Many times it was very extravagant. Also, there are many unpaid bills which we have to clear other than these loans,” the minister said.

Noting that 2004-09 (when late Y S Rajasekhara Reddy was Chief Minister) was a golden period for agriculture sector in the state when 5.07 per cent growth was registered, Buggana said 2014-18 period was the worst as the growth sunk into the negative (4.12 per cent).

In 2014-15, agriculture sector per se registered -0.35 per cent growth followed by -12.28 per cent and -7.36 per cent in subsequent years. In 2017-18, the sector turned around to witness 15.31 per cent growth but slid once again to -9.83 per cent in 2018-19 (advance estimates), the minister said. He said the state's revenue deficit stood at an aggregate Rs 66,000 crore at the end of 2018-19 fiscal.

"It is evident that the previous government has had little control over the revenue expenditure, which continued to grow unabated, as it failed to manage its finances efficiently and prudently in accordance with the established norms, despite receiving revenue deficit grant awarded by the 14th Finance Commission. Making matters worse, (the TDP) government used borrowed funds for financing revenue expenditure, which substantially reduced the resource availability for capital investment," Buggana said.

This pushed critical sectors like education, health care and nutritional services into an abysmal state, he added. Talking about the debt, the minister noted that APs

burden was Rs 97,000 crore at the time of bifurcation in June 2014.

"In five years, it peaked to a whopping Rs 2,58,928 crore. Interest payment alone on the debt is projected to be over Rs 20,000 crore per annum, in addition to the repayment of principal to the tune of another Rs 20,000 crore," he said.

Huge off-budget borrowings by various corporations floated by the state government pushed the aggragate debt to a staggering Rs 3.62 lakh crore, the minister said.

“A majority of the electoral promises made by the TDP ahead of the 2014 elections have remained partially or entirely unfulfilled. The All India Rural Financial Inclusion Survey, 2016-17, says that the incidence of indebtedness among agricultural households in the state is as high as 77%, as compared to the national average of 47%,” the finance minister said.

"This is enormous but we have to slowly clear it. Its a tough situation but we will face it boldly," Buggana said, adding that their governments emphasis would be on

building human capital through a slew of welfare schemes.

"Everything will be made public in my Budget. Just wait for two days," he said. Buggana Rajendranath would present the annual budget for 2019-20 to the House at 11 am on July 12.

(With inputs from PTI)