'AP plunge into Rs 2.58 lakh cr debt in Naidu's term'

The first ever white paper on the state of finances by the Y S Jaganmohan Reddy government, released by the state finance minister Buggana Rajendranath Reddy here on Wednesday, held Nara Chandrababu Naidu’s five-year rule responsible for the present financial turmoil the state is facing.

The report explains that the irresponsible and extravagant management of finances during the past five years has pushed the otherwise vibrant state into deep financial crisis. “The new government has inherited a deeply indebted public financial system, empty treasury, and a gigantic debt, apart from unpaid bills amounting to more than Rs 16,000 crores,” the finance minister noted.

The state had resorted to overdraft almost every month, thus resulting in serious debt, which has increased to whopping Rs 2,58,928 crores. Further, there are huge contingent liabilities to the tune of Rs 57,000 crores, in the form of guarantees given for loans availed by the state government entities.

“Had all this debt gone to fund capital expenditure, it would have been partially excusable, as capital expenditure has the potential to bring about a paradigm shift in the economy of the state. However, the entire debt has gone to fund the excessive revenue expenditure” the white paper reads.

During the period between 2014 and 2018, the average inflation in AP was around 7.6%. Andhra Pradesh has had the highest level of consumer inflation, especially food inflation, for any state in the country. The previous government not only contributed to the deepening of rural agrarian crisis but further accentuated the problem by its failure to harmonize supply-demand management, the report says.

Addressing the media, the finance minister also said that the unpardonable silence of the TDP government with regard to Special Category status and a complete surrender to the BJP government by accepting a package in place of the SCS further drove the financial status of the state into the doldrums.

The report has been kept in public domain for the public to have a look, the minister said.

However, the TDP, which has warned the state government not to attribute its failure to secure special category status and funds from the Narendra Modi’s government to Naidu’s rule, said that it will come up with its own status report to counter the allegations.