Delay in special package decision costs Andhra Pradesh dearly
Debt burden increased manifold during last 3 years.
Hyderabad: Due to delay in the announcement of the special financial package by the Centre, the Andhra Pradesh state has lost huge funds over the last three years, while its debt burden has increased manifold during the period.
The Centre said the financial package of Rs 2.25 lakh crore would come into effect from the date of its announcement and was not applicable with retrospective effect.
As per the package, the Centre will release funds under Externally Aided Projects (EAPs) at the rate of 90:10 between the Centre and state.
After the bifurcation, i.e. from June 2, 2014, to August 31, 2016, the state government got Rs 2,235.82 crore as loan from the Centre under the EAP.
Had the Central financial package been announced in 2014, the state government could have got Rs 2,012.24 crore as grant from the Centre and its loan burden would have been Rs 223.58 crore. However, in the current situation, the state government owes Rs 2235.82 crore to the Centre.
For Centrally-assisted state plan schemes, the sharing pattern is different.
While the Centre will fully fund some schemes, for some it will be 50:50, 60:40 and 75:25 ratio between the Central and state governments.
Every financial year, the Centre releases over Rs 10,000 crore as its share for Centrally-assisted state plan schemes. The state government lost over Rs 6,000 crore in the last three years because of the delay in package announcement.
Similarly as per the 90:10 ratio, the state might have got Rs 3,000 crore more in 2015-16 fiscal. As the first quarter is already over, the state is likely to get only Rs 2,714 crore more in the current fiscal.
Under the revenue gap, the state government will get Rs 3,000 crore more for 2014-15 fiscal. The state had estimated the revenue gap at over Rs 16,000 crore, but the Centre estimated it to Rs 7,500 crore on the basis of the 14th Finance Commission report. The Centre will relea-se Rs 1,000 crore more for the construction of new capital city Amaravati.