Andhra Pradesh govt blames COVID-19 for state's growing debt
The Central government was forced to borrow Rs. 18,48,655 crores in 2020-21, the highest ever. The pandemic put a heavy burden on the state and Central exchequer.
By Newsmeter Network Published on 30 March 2021 2:36 PM GMT
Hyderabad: At a time when opposition parties are criticizing the Andhra Pradesh government about the state's rising debts, the state government on 30 March clarified that the borrowings by the government are well within the limits and almost similar to the Centre's borrowings. The AP government said that the government was compelled to borrow heavily due to the COVID-induced revenue losses. Interestingly, the state government said that the borrowings during the TDP regime were much higher than the debts incurred in the last two years.
The Central government was forced to borrow Rs. 18,48,655 crores in 2020-21, the highest ever. The pandemic put a heavy burden on the state and Central exchequer. Economic growth in the country even before the pandemic was dismal. GDP growth at fixed prices was limited to 4.18 % in 2019-20, while the gross tax revenue contracted by 3.39 %. As a consequence, the real GDP during the first quarter of this financial year contracted by 23.9 %.
In addition to the aforementioned issues, the Andhra Pradesh government said it had to deal with other woes due to the unjust bifurcation and the subsequent failure to implement all the clauses listed in the AP Reorganization Act. It also recalled that while the Centre's debt had increased by just 49.92 % between 31 March 2014 and 31 March 2019, the state's debt under the TDP government for the same period had increased by a whopping 132.31%.
Last-minute sops declared and implemented by the then Chief Minister Chandrababu Naidu, right before the 2019 general elections, heavily dented the state's financial position, it alleged. The state government claimed that the Centre's debt increased by 32.86 % between 31 March 2019 and 31 March 2021 and the state's debt also increased by just 34.70 %, despite the unprecedented situation that the government had to deal with due to the COVID-19 outbreak.
According to estimates, the state has incurred a loss of at least Rs. 21,500 crores due to the pandemic. The loss incurred by the state on account of the state's share in Central taxes itself is Rs. 7,780 crores. Additionally, a loss of Rs. 6,961 crores to the state's revenue was reported. Similarly, the state's COVID-19 expenditure came up to nearly Rs. 6,700 crores.
