Mathematically it is not possible that the whole be lesser than the sum total of its parts. But this is what has been proven wrong in the real world when the AP budget was put together in one piece.
The segregation of erstwhile Andhra Pradesh into two different states is now working strongly in Andhra’s favor, despite many hurdles. The budget has multiplied amazingly which is more than the budget of the undivided state three years ago.
Both the states revealed their budgets last week and it was noted that these figures when put together add up to a much higher amount than the budget of Andhra Pradesh in the fiscal year 2012-2013.
Now, it is not just the budget that has gone up. The debts of Andhra Pradesh have also risen to INR 1.92 lakh crores which is actually higher than the proposed budget for the current fiscal year. This figure however, includes INR 33,478 crores which is yet to be divided between the two states. It is believed that the debt amount can rise to a whopping INR 2.16 lakh crores by the end of this fiscal year.
Disheartening as this may sound, there is surely some consolation in the fact that the state is showing a growth in double digits when the company as a whole displays a single digit growth.
The debt of the state of Telangana is estimated to rise by 18% of the GSDP (Gross State Domestic Product) which could be roughly around INR 1.40 lakh crore. The same for the state of Andhra Pradesh is estimated to be at 28%.
Chief Minister of AP, N Chandrababu Naidu and his government are putting in great efforts to develop the capital city Amaravati which demands a huge capital investment.
In order to ensure that the Telugu states do not go overboard with their borrowing limits and fiscal deficits, the Fiscal Responsibility and Budget Management Act is keeping a close eye on them. However, both the states have been requesting for some more flexibility which can come in handy for raising funds.
The per capita income of a state is what demonstrates the well being of the people living in it. In case of AP, the per capita income is estimated at INR1,22,376. It should be noted that the average per capita income of the country is projected at INR1,03,818.
According to experts, the rise in the debts is surely a matter of concern for both the states. Though most of the funds are being raised by borrowing money from the market, further efforts are being made to explore newer possibilities of raising funds like by using “masala bonds” etc.