Mystery Picture In AP Finance Minister Budget Lecture – Prof K Nageshwar

A report in a Telugu newspaper titled the budget news report has a history lecture and mystery picture drawing from a popular Telugu film lyric. It is certainly catchy. But, the attractive headline is not just to draw the reader’s attention which the newspapers normally do. A perceptive reading of the finance minister’s long speech reveals that his budget edifice is built on inflated estimates that may or may not materialize. This makes any analysis of allocations redundant.

Andhra Pradesh finance minister presented the budget for 2021-22 with a total outlay of 2.30 lakh crore. It is quite audacious given the shrinking character of public finances during COVID times. The Budget document reveals that only 82 percent of the last year’s outlays were realized.

In 2020-21 budget estimates, the YS Jagan government estimated tax revenue of Rs 71,000 crores. But, the revised estimates put it at Rs 57,000 crores. Yet, the finance minister pegged the tax revenues for 2021-22 at over Rs 85,000 crores. Similarly, the non-tax revenues in the last year’s budget were estimated at Rs 5,800 crores. But the revised estimates state it to be Rs.3, 300 crores. Yet, in the 2021-22 budget the non-tax revenues are estimated at over Rs.7,000 crores. Similarly, the central tax devolution to the states and other accruals are also inflated to give a rosy picture.
The finance minister estimated total revenue of Rs 1.62 lakh crores in last year’s budget. But, only Rs.1.18 lakh crore accrued. Notwithstanding such a whopping shortfall, the FM pegs the total revenue in the financial year 2021-22 at Rs.1.77 lakh crores.

The state government continues on a borrowing spree. The state’s public debt will mount to Rs 3,87,125 crore in 2021-22 from Rs 3,55,874 crore the previous year as the government targeted to borrow Rs 50,525 crore afresh. The state will spend a staggering Rs 23,205.88 crore this year towards debt servicing alone. This makes Andhra Pradesh public finances much more precarious.

Though the YS Jagan government claims of balancing the twin objectives of development and welfare, the latter takes precedence over the former as revealed in the budget outlays. The government has earmarked a whopping Rs 48,083.92 crore for 22 freebie schemes this year.

By Prof K Nageshwar

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