Andhra Pradesh Staring At Fiscal Crisis

As Chief Minister YS Jagan Mohan Reddy is busy in settling scores with his political rival and TDP supremo N Chandrababu Naidu, the Andhra Pradesh government is heading for a debt trap. The CM is busy in spending on welfare schemes and social security cover. But what is worrying is the high level of borrowings. Amid Covid-19 stress and downturn, Andhra Pradesh’s borrowings in 2020-21 is estimated at a whopping 142% — a cause of concern for the state’s ruling YSR Congress party government. What has also increased the state government’s worry is the high fiscal deficit, which is put at Rs 68,536 crore, while the revenue deficit crossed Rs 48,809 crore in December 2020. Clearly, the economists and experts say the situation is alarming as they predict a fiscal emergency in the state. It is a crucial time for YSR whether he continues to neglect fiscal impropriety or adhere to fiscal prudence to save the state from a major financial crisis.