EscapeRevolution

Escape Revolution

Three budgets that tell their own tale

A study of budgets of unified AP, AP and Telangana shows not only mounting debt but also rising income

This is a tale of three budgets: of the unified Andhra Pradesh in 2013-14, and of the two successor Telugu States — Andhra Pradesh and Telangana — in 2018-19.

The tenures of Andhra Pradesh Chief Minister N Chandrababu Naidu and Telangana Chief Minister K Chandrasekhar Rao saw the individual Budgets ballooning more than that of the unified entity, and their debt too has simultaneously zoomed.

An analysis of the budget presented in the then unified AP in 2013-14 and of the separate States four years after their formation, shows that both have grown significantly, but they have also piled up huge debt, a worrisome aspect from a macro-economic perspective. When Anam Ramnarayan Reddy, the finance minister of united AP presented the Budget for 2013-14, the total expenditure was pegged at 1,61,346 crore as against 1,45,854 crore in the previous year. Public debt then was 1,48,743 crore, amounting to 28.25 per cent of the Gross State Domestic Product.

In contrast, Yanamala Ramakrishnudu in 2018-19 had presented a budget of 1,91,000 crore for the truncated AP.

Likewise, in the same year, the budget presented by Eatala Rajender, Finance Minister of Telangana had programmed an outlay of 1,71,453 crore. The budgets of both States had outgrown that of the unified State.

Debt at alarming levels

Also, in the five years since their formation in June 2014, their debt has grown to alarming proportions.

AP’s debt has gone up from 1,48,743 crore in 2014-15 ( 28.25 per cent of the GSDP) to 2,49,435 crore in 2018-19 (28.66 per cent). For Telangana, the outstanding debt has gone up from 93,115 crore as of 2015-16 (16.18 per cent of the GSDP) to 1,80,238 crore (21.39 per cent of the GSDP.)

Per capita income soars

State Socio Economic Surveys show that while the State budgets swelled and their investments showed upward trend, the per capita income (PCI) numbers, a measure of living standard of the people, have also risen significantly for both States as against the all India numbers.

As per CSO guidelines, the PCI is estimated by dividing the Net State Domestic Product (NSDP) with midyear projected State population.

In the United AP, the PCI in 2013-14 was estimated at 85,797, up 14 per cent over 76,041 in the year before period as against the all India average estimated at 74,380. This has now grown to 1,64,025 in 2018-19 as against 1,43,936 a year before.

In the case of Telangana, the PCI is much higher than the all India figures over the years. It has grown from 1,12,162 in 2013-14 to 1,75,534 in the year 2017-18 as against the all India PCI of 63,462 in 2011-12 and 1,12,764 in the year 2017-18.

Given the focus of both States on welfare measures, those watching the developments closely believe that the capital investments could have been much more than what was allocated in the past five years.

[“source=thehindubusinessline”]