Liabilities swelled to Rs. 2.72L cr during TDP rule, AP CMO claims

An attempt is being made with illogical statements on State finances, exposing their lack of basic understanding of public finances, purely to create a panic among the people that the State is on the brink of financial collapse. One of the so-called experts did not present even a single figure to substantiate his claims. He has passed disparaging remarks not only against the State but also against institutions like RBI and CAG, says a statement released by the CMO

Vijayawada: Stating that the liabilities swelled to Rs 2,71.797 crore during the erstwhile TDP regime post-bifurcation, the YSRCP Government in Andhra Pradesh on Thursday described as handiwork of TDP-affiliated media publications for trying to project the State finances in poor light.

Special Secretary to Chief Minister, Finance and Economic Affairs Duvvuri Krishna at a media conference rubbished the reports in a section of the media as ‘figment of imagination and classic instance of spreading falsehood by twisting facts.’

Later in the day, in a detailed statement released by the Chief Minister’s Office, the State Government said in the light of the misinformation propaganda, particularly articles being written in Opposition-affiliated media by so-called financial experts, an attempt is being made with irresponsible and illogical statements on State finances, exposing their lack of basic understanding of public finances, purely to mislead the people and create a panic among the people that the State is on the brink of financial collapse.

The government clarified that one of the so-called experts did not present even a single figure to substantiate his claims. He has passed disparaging remarks not only against the State but also against institutions like RBI and CAG. The intent of the Opposition-affiliated media and the extent to which they can stoop is quite apparent.

The government quoted a report released by the Reserve Bank of India on State finances, which is released every year titled, ‘State Finances - A study of Budgets’. This report contains the State-wise details of outstanding liabilities for the past 15 years. In fact, the RBI has taken into consideration the audited numbers released by the CAG and after making some minor adjustments to better reflect the actual position and arrives at the figures for State-wise outstanding liabilities.

This year’s report was released by the RBI in January, the government said. As per this report the total outstanding liabilities of Government of Andhra Pradesh at the end of March, 2023 were estimated at Rs 4,42,442 crore.

According to the statement, an assessment on the basis of the figures provided by this report would convey the following: The outstanding liabilities of the combined State of Andhra Pradesh on March 31, 2014 was Rs 1,96,202.40 crore. To this, Rs 7,333 crore would be added as this is the fiscal deficit for the first two months of 2014-15 financial year. Of this, as per the State Reorganisation Act, 58 per cent was devolved to the successor State of Andhra Pradesh.

“Therefore, we can say that the liability of the State of AP at the time of formation of the TDP Government in June 2014 was Rs 1,18,051 crore and the same has increased to Rs 2,64,451 crore as of March 31, 2019.”

“However, the TDP Government was in existence till almost the end of May 2019 and during the first two months of the financial year 2019-20, the government had borrowed another Rs 7,346.56 crore. Therefore, by the time of dissolution of the TDP Government, the liabilities had swollen to Rs 2,71,797.56 crore.”

The government clarified that the State PSUs that are able to secure debt without the strength of a government guarantee possess assets that can be securitised and a credible revenue model. Therefore, for giving a loan to those entities, no government guarantee is sought. Further, the majority of the PSUs are limited liability companies under the Companies Act and there is no recourse to the government in the absence of a guarantee. With respect to AP State Government, only corporations pertaining to the power sector have been historically securing debt without government guarantee. Though, by no stretch of imagination can these debts be regarded as government debts, owing to the constant allegations by the Opposition-affiliated media that the government is deliberately avoiding disclosure of this information, the position of the same is included in the liabilities of the government.

“The outstanding liabilities have increased by 169 per cent during the five- year TDP period. This translates to a compounded annual growth rate of the liabilities of 21.87 per cent during 2014-19. As against that, the outstanding liabilities have increased by only 58 per cent during the five year YSRCP rule from 2019-23, translating to a compounded annual growth rate of only 12.69 per cent during the period 2019-23. With respect to off budget borrowings, all kinds of rumors are being circulated,” the statement claimed.