The Centre’s imposition of a major cut in the market borrowing by the State was a tight slap in the face of the YSRCP government, said TDP politburo member Yanamala Ramakrishnudu.
Incidentally, the Centre’s decision came close on the heels of Finance Minister Buggana Rajendranath Reddy’s visit to Delhi, he said.
In a statement on Thursday, he claimed that the a report on the ‘borrowings by the State government’ presented by the Finance Department for April, 2021 ‘shocked’ the Central government officials. “The Centre has fixed a cap on open market borrowings by the State. However, the government is yet to learn its lessons. Andhra Pradesh borrowed ₹17,924 crore in 2020-21 fiscal, which was more than 4 % of the Gross State Domestic Product (GSDP) in the previous year. Another ₹6,000 crore was also taken as debts. Hence, a cap has been fixed on the borrowings, confining it to ₹27,668 crore for 2021-21 fiscal,” he said.
Mr. Ramakrishunudu further said that the State government did not respond in the desired fashion, though FRMB Review Committee headed by N.K. Singh cautioned it in April last year. The panel said if the debts exceeded 20 % of the GSDP, it would be categorised as a bad financial management. “Andhra Pradesh’s borrowings 41.46 % of the GSDP, it is 17 % for Telangana. A.P. stands in third place in the list of States with high debt-GSDP ratio. It speaks volumes of the financial mismanagement,” he said.
