For Andhra Pradesh, that was already struggling with its finances post-bifurcation in 2014, the Corona virus pandemic has hit it really hard. It is now virtually scraping the bottom of its exchequer barrel to keep the state going. The state usually generates a revenue of Rs 6000 crore.
“But when we looked at the revenue receipts between 21 March and 20 April, we found Andhra Pradesh had generated a paltry Rs 50 crore. Such has been the hit and it cannot be recouped either,” a senior official in the Andhra Pradesh government told Filter Kaapi.
This is largely because of no revenue from sale of liquor, fuel and real estate. Though limited commercial and agricultural activity was allowed this week in the green zones, that is unlikely to translate into substantial revenue as movement is largely restricted to within the mandals.
Add to this the monthly salary bill, that includes all pensions and emoluments amounting to Rs 6000 crore. The government decided to defer payments to the council of ministers including the chief minister and brought in cuts for IAS and IPS officers and other employees, which translated to an immediate saving of Rs 2000 crore.
But even to generate the remaining Rs 4000 crore is proving to be a struggle for the Finance department. And with the lockdown, there is no productivity in return because barring the police, health and sanitation officials, no other department is actually working now.
The Reserve Bank of India allows states to draw a loan from it. Andhra Pradesh can draw up to Rs 30000 crore every year which translates to Rs 2500 crore every month. Now that money instead of going into development programmes, is being used to service the salary burden.
Andhra Pradesh is looking to the Centre to bail it out of this crisis with a long-term loan, failing which its finances, like that of many other states in India, would simply crumble.
Categories: Andhra Pradesh