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AP budget may focus on fiscal consolidation as deficits mount

Press Trust of India  |  Amaravati 

The Andhra budget, to be presented tomorrow, is likely to focus on fiscal consolidation to control the runaway fiscal and deficits despite robust growth.

and legislative affairs minister will table the annual financial statement in the Assembly tomorrow morning, wherein he is expected to essentially focus on fiscal consolidation.


While the budget 2017 was estimated at state's economy at Rs 1.36 trillion, the new budget is likely to estimate the size of the economy at over Rs 1.50 trillion, according to sources.

The state will also present a uniform budget without the classification of plan and non-plan expenditure, in line with the Union Budget 2018.

Though it actually failed to achieve the targeted 15 per cent growth, the state's economy grew at 11.61 per cent in 2016-17. But deficit shot up to Rs 14,134 crore as against the projected Rs 4,868 crore. Similarly, fiscal deficit too has become a major cause for concern as it is expected to touch about 3.6-4 per cent in 2016-17, more than the estimated 2.99 per cent.

Another worrying factor for the cash-starved is the significant drop in this year. While the state projected receipts of Rs 1.25 trillion this 2016-17, actual receipts so far is only Rs 88,957 crore.

The Chandrababu Naidu government, however, is banking on the grants from the Centre under the special economic package and also the additional accruals post GST rollout to bridge the gap.

Also, it hopes the Centre will grant its demand to enhance the Fiscal Responsibility and Budget Management Act limit to 3.5-4 per cent to tide control fiscal deficit.

The Centre still owes over Rs 7,000 crore to the state as per the AP Reorganisation Act of 2014 to bridge the deficit caused by the bifurcation.

On the eve of the Budget presentation, which will be his ninth over the years, Yanamala, exuded confidence that Budget will be robust with focus on welfare and development.

"The challenges before us are to reduce fiscal and deficits. At the same time, we have to increase our without taxing people," he said, adding the size of the 2018 Budget will not be less than the present one which is Rs 1.36 trillion.

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Tue, March 14 2017. 20:32 IST
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