AP fast-tracks borrowings to offset revenue shortfall

The state received Rs 400 crore less than the anticipated Rs 4,200-crore revenues last month due to the ongoing general strike, which started on September 14 by government staff in the Telangana region, according to official figures.

If the strike continues for the whole of October, it would be difficult to manage the expenditure, which has further grown on account of additional spending towards security arrangements and power purchases during the strike period, officials said.

However, they maintain that the state is in a position to meet any shortfall in revenues as the fund flows from market borrowings are available to take care of emergencies.

Interestingly, the state government had already raised Rs 11,000 crore through bonds by September end itself, which is over 60 per cent of the total Rs 17,900 crore it was allowed to raise through market borrowings during the current fiscal.

On average, the government spends upwards of Rs 4,000 crore on various programmes in a month and any shortage of funds normally leads to stoppage of payment of major bills to contractors towards the works that usually come under plan expenditure. This will have a cascading effect resulting in a slowdown of execution of works proposed in the Budget.

“We are still hopeful that the revenue gap reported for the month of September would come down after we get the final numbers. But there are obvious revenue losses. For example, we lost Rs 75 crore of sales tax from Singareni Collieries due to stoppage of coal production,” a senior government official said.

The state government had targeted Rs 59,957 crore tax revenues for 2011-12 and growth in revenues especially on the commercial taxes front was almost on the anticipated level till the strike started, according to the officials. The only exception being the mining sector, which has been registering a negative growth since the second half of the last financial year.

Revenues from the stamps and registrations department also got affected as land registrations in the Telangana region stopped due to strike. However, this stream of revenue would be restored once offices start functioning, they said.