AP clocks record fall in Q1 revenues

By Newsmeter Network  Published on  7 Oct 2019 1:36 PM GMT
AP clocks record fall in Q1 revenues

Hyderabad: Andhra Pradesh suffered a record drop in revenues during the first quarter 2019-20 financial year. The revenue drop will increase pressure on the YSRC-led government as Chief Minister Y.S. Jagan Mohan Reddy goes ahead with several welfare schemes and a huge recruitment drive.

According to Elara Capital's analysis of the CAG, data highlighted the significant revenue drop for 17 states across India, including Andhra Pradesh.

According to the CAG report, revenue growth for Andhra Pradesh was 5.9 per cent in 2018-19. However, during the first quarter (April-July) of 2019-20, the revenue growth was 42.7 per cent. Andhra Pradesh suffered the steepest drop in revenues followed by Punjab with 12.5 per cent dip, Karnataka with 12.3 per cent, Gujarat with 8 per cent and Kerala with 7.6 per cent.

K. Ram Mohan Naidu, TDP MP from Srikakulam Lok Sabha constituency said, “The new government has continued spending without working on revenue sources. This government lacks basic administrative capabilities about revenues and welfare spending. Andhra Pradesh is headed for a disaster.”

The drop in revenues is signaling an alarming situation for the second half as well. The state government is firm on its spending and welfare schemes. However, easing tax and non-tax revenues would put more pressure on the government, said an economist.

The overall expenditure of the states during the first quarter was more or less at the same level as the previous corresponding period. The steady flow of compensation from the Centre is helping states like Andhra Pradesh, observe economist. The compensation cess despite moderate GST collections is helping the states with moderate revenues.

GSDP (Gross State Domestic Product) of Andhra Pradesh rose 10 per cent to Rs 8,70,326 crore in 2018-19. Andhra Pradesh’s economy is estimated to be Rs 10.81 lakh crore for the current financial year. Projected revenues for the current fiscal are Rs 1.79 lakh crore and expenses are at Rs 2.28 lakh crore.

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