Andhra Pradesh on the verge of becoming bankrupt, says Yanamala Ramakrishnudu

Borrowings have exceeded revenue receipts, and the YSRCP government has deviated from the cardinal economic principle of using them for asset creation, says the former Finance Minister

The borrowings of the Andhra Pradesh government have exceeded its revenue receipts, and this is leading to an extraordinary financial crisis, which may further lead to bankruptcy, says senior Telugu Desam Party leader and former Finance Minister Yanamala Ramakrishnudu.

Addressing the media here on Saturday (November 5), Mr. Ramakrishnudu said the government had deviated from the cardinal economic principle of using borrowings for asset creation. “Instead, it is diverting all borrowings for unproductive purposes. It has already crossed all the debt barriers, and is moving fast towards bankruptcy,” he said.

According to him, in the last six months the YSRCP government has borrowed about ₹58,000 crore under the Open Market Borrowings (OMB) against the budgeted allocation for ₹48,000 crore. And by the end of the financial year, the borrowings would cross the ₹1 lakh-crore mark, which was double the budgeted allocation, the TDP leader said.

This apart, the government had availed Off-Budget Borrowings (OBB) of ₹4.4 lakh crore. Together with the OMB, the total borrowings in the last three-and-a-half years was about ₹8.52 lakh crore.

“As far as the OBB is concerned, the government has gone against the financial norm to increase the borrowing limit from 90% to 180%,” he said.

“At this rate, by the time the term of this government is over, the total borrowings will be more than ₹10 lakh crore. The government that comes to power next, whoever it may be, will have to repay ₹1 lakh crore per annum. This is a Herculean task when the total budget of the State is around ₹3 lakh crore,” he said.

Referring to the growth rate, Mr. Ramakrishnudu said, “When we (the TDP) handed over power to the YSRCP in 2019, the growth rate was around 10.22%. And now, it is minus 1.8%, which clearly shows that Chief Minister Y.S. Jagan Mohan Reddy is either ignorant of the facts, or is telling lies.”