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GOVERNMENT OF ANDHRA PRADESH

WHITE PAPER ON STATE FINANCES

09 July 2014

FINANCE DEPARTMENT

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Contents 1. Introduction ........................................................................................................................ 4

2. Economic scenario .............................................................................................................. 5

3. State Finances .................................................................................................................... 10

4. State’s Own Revenue ......................................................................................................... 11

5. Composition of total expenditure ........................................................................................ 15

6. Debt Position ..................................................................................................................... 16

7. Interest Payments& Plan Expenditure ................................................................................. 17

8. Implications of the State Division ....................................................................................... 20

9. Conclusion………………………………………………… ……………………………… 27

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ANNEXURES

Structure of State Receipts - I

States Own Tax Revenue - II

States Own Non-Tax Revenue - III

Debt Servicing Costs - IV

Loans and Advances by the State Government - V

Expenditure on Salaries on and Establishment - VI

Annual Plan Outlays - VII

Pattern of Plan Financing - VIII

Trends in Developmental Expenditure - IX

Revenue Receipts and Expenditure - X

Fiscal Deficit and Interest Payments - XI

Year-wise Gross State Domestic Product - XII

Comparative Strength of Employees - XIII

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1. Introduction 1. Andhra Pradesh State, notwithstanding the bountiful natural resources, internationally valued

human resources and the entrepreneurial dynamism, had shown little economic vibrancy in the nineteen

sixties and seventies, growing at an annual rate of 2.11 and 3.01 per cent respectively, far behind the

national average. The economic growth trajectory of the State took an upward turn in the eighties,

during which the State’s economy had grown on an average around 5.21 per cent annum. However, the

State continued to lag behind the national growth momentum during the eighties. While the launch of

first generation reforms at the national level in the early nineties had kick-started the national economy,

the real upturn started in the Andhra Pradesh economy with the launch of second generation reforms in

the second half of nineties.

2. The comprehensive reform package, that were launched in the second half of the nineties,

coupled with strategic investments in infrastructure, education, population stabilisation, human

resources development, job creation, etc., had carried the State to the highest annual economic growth

of 8.16 per cent in 2000-01 financial year, nearly twice the national growth rate for the same year. This

growth momentum, the result of far reaching economic and fiscal reforms, good governance, and

strategic investments and development partnerships created and built between 1995 and 2004, continued

unabated until 2007-08, during which the State retained lead over the national growth march. However,

the tide turned for the worst in 2008-09 and the downward spiral continues to haunt the State until now.

3. Since 2008-09, the State hadbeen characterised by misgovernance, corruption scandals, and lack

of development vision and strategic direction, which together have seriously affected the economy of the

State, stalled the growth momentum, undermined the reputation and standing of the State as a model of

good governance and development and downgraded the stock of Brand Hyderabad that was built

through systematic and arduous efforts. The endless procession of agitations, strikes, and civil strife,

coupled withlack of investment in both infrastructure and human development have caused a major

setback not only to the growth momentum but also to poverty alleviation efforts. The overall slowdown

in the national economy, contraction of job opportunities, consistently high levels of inflation have

compounded the crisis and have created a sense of gloom and doom in the minds of Andhra Pradesh

citizens.

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4. The sense of alienation and despondency was further compounded by the manner in which the

State was reorganised by the previous central government. Andhra Pradesh Reorganisation Act 2014 has

divided the State of Andhra Pradesh without an iota of concern for or attention to the disastrous

economic and financial consequences on the residuary Andhra Pradesh. The previous Government at

the Centre choose to distribute the assets based on location, while apportioning liabilities on the

population ratio, as most of them were common liabilities. Considering that virtually all the major assets

are located in and around Hyderabad city, Andhra Pradesh has forfeited major economic assets and

inherited massive liability without having the wherewithal to service the debt.

5. In this background, this paper is intended to review the economy of the undivided State of

Andhra Pradesh during the past decade, analyse the impact of AP Reorganisation Act on the fiscal

situation of residuary Andhra Pradesh and pre-set the likely fiscal scenario in 2014-15 financial year.

2. Economic scenario

6. The Gross State Domestic Product (GSDP) growth rate of Andhra Pradesh, the Gross Domestic

Product (GDP) growth rate of the country as well as Sectoral Growth rates since 1960 are given in

Table-I.

(Rs. Crores)

Table-1

Sectoral Growth rates (%) of GSDP (at Constant prices) of Andhra Pradesh & India

Period /

Year

Sectoral growth % AP -Growth

of GSDP (%)

India -

Growth of

GDP (%)

Agriculture Industry Services

AP India AP India AP India

1960-71 1.07 6.74 5.15 11.25 3.59 5.66 2.11 7.08

1970-81 1.18 7.09 5.97 0.74 5.02 4.95 3.02 5.01

1980-91 3.79 12.89 7.20 5.24 8.26 4.62 5.21 7.17

1990-01 2.95 4.02 6.56 7.33 6.43 5.19 5.42 5.29

1999-00 -2.28 2.67 3.50 5.96 8.88 12.05 4.58 8.00

2000-01 13.16 -0.01 -2.30 6.03 7.73 5.07 8.16 4.15

2001-02 -1.53 6.01 6.35 2.61 7.69 6.61 4.22 5.39

2002-03 -7.76 -6.60 12.14 7.21 6.30 6.74 2.73 3.99

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2003-04 15.14 9.05 6.29 7.32 7.92 7.89 9.35 7.97

2004-05 4.45 0.18 8.89 9.81 9.72 8.13 8.15 6.97

2005-06 6.12 5.14 10.05 9.72 11.04 10.91 9.57 9.48

2006-07 1.97 4.16 17.60 12.17 12.48 10.26 11.18 9.57

2007-08 17.38 5.00 10.87 9.67 10.30 10.27 12.02 9.32

2008-09 0.76 0.09 7.15 4.44 9.53 9.98 6.88 6.72

2009-10 0.21 0.81 3.04 9.16 7.07 10.45 4.53 8.59

2010-11 5.00 8.60 9.97 7.55 15.04 9.67 11.64 8.91

2011-12 0.88 5.02 7.31 7.81 15.04 8.65 7.51 6.69

2012-13 7.21 1.42 - 0.46 0.96 6.95 6.96 5.09 4.47

2013-14 6.43 4.64 1.30 0.65 7.02 6.86 5.51 4.86

AE: Advanced Estimate: FRE: 1st Revised Estimate, SRE: 2nd Revised Estimate: TRE: 3rd Revised Estimate

(Final Revision).

7. As seen from the table, until the 1990s the average growth of GSDP of AP remained below the

growth rate of GDP of the country. The rate of GSDP increased from 1.8% in the 1960s to 2.8% in the

1970s, to 4.92% in 1980s and to 5.2% in the 1990s. In reality, the State had experienced fiscal

imbalances moderately in 1980s and steeply in the 1990s. To turn around this situation, A.P. had set

itselfa determined Vision-2020 and stood as one of the pioneering States in initiating reforms to restore

fiscal health in right earnest at the sub-national level. The Government of A.P. had initiated various

measures during 1995-2003 covering resource mobilization, moderation / management of government

expenditure, which showed reasonable level of success. As a result, the growth of GSDP gathered

greater momentum between 1995-96 and 2004-05 and grew at a sustained rate of 5.8% per annum. In

sharp contrast to the past trends, the state’s economy registered a growth of 8.1% in 2000-01 compared

with national growth rate of 4.15 %. This was facilitated by an impressive growth of 13.16% in the

agriculture sector in that year registering an impressive recovery from the earlier years.

8. The reform process in the late nineties was directed at augmenting revenue resources and

minimising less productive expenditure. Restructuring expenditure included improvement in operations

and maintenance (O & M), spending on education and health and increasing capital investment. It also

included rationalising subsidies, inviting private sector participation in the infrastructure sector and

framing growth-enhancing policies. Better maintenance of existing assets in preference to starting new

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projects, completing on-going projects through critical balancing investments, zero based evaluation of

every scheme, phasing out ineffective ones and base budgetingon a realistic estimate of resources was

given focus.

9. While GSDP growth sustained the momentum of earlier years between 2004-05 and 2007-08

averaging rates higher than national growth rates, it fell precipitously to 6.8% in 2008-09 from a high of

12.02% in 2007-08. It continued to decline to 4.53% in 2009-10 and notwithstanding a modest recovery

in 2010-11 the growth rates in the past 3 years have averaged around 5.10%.

10. Sectoral Growth Trends: One can also see from the sectoral growth rates given in the table

that the economy during the last 10 years has shown mixed trends. Barring the services sector, which

maintained a respectable growth rate of around 9.78% p.a. during 2004-14 decade,the growth of

agriculture and industrial sectors has been uneven and volatile. The industrial sector posted negative

growth in the year 2012-13 and has failed to demonstrate the resilience of earlier decade. The reason for

better showing of the services sector was because of the initiatives by the Government in late 1990s and

early 2000s, especially in the IT Sector and tourism sector. Besides evolving strategies for making state

capital of Hyderabad as IT Hub, ISB, IIIT etc. took shape during the period. APSWAN, TWINS,

CARD (computer aided registration department) etc. have helped to have a strong foundation for the

growth of services sector. However, the growth story of the State’s economy that entered a higher

growth trajectory in the early years of last decade has been witnessing a sharp slowdownand downward

journey since 2008-09.

(Rs. Crores)

Table-2

Trends in Per Capita Income-Andhra Pradesh and All-India

Period/ years

Average annual Per capita income at current prices

(Rs)

Average annual growth of per capita

income (%)

Ratio of per capita income of AP to all-

India (%) AP India AP India

1970-81 4904 5575 0.94 1.12 88.0

1980-91 6160 6788 3.04 3.24 90.7

1990-01 8865 9587 4.01 3.98 92.5

1999-00 15507 15881 4.26 4.56 97.6

2000-01 16622 16173 7.19 1.84 102.8

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2001-02 18573 17782 11.74 9.95 104.4

2002-03 19434 18885 4.64 6.20 102.9

2003-04 21931 20871 12.85 10.52 105.1

2004-05 25321 24143 15.46 15.68 104.9

2005-06 28539 27131 12.71 12.38 105.2

2006-07 33135 31206 16.10 15.02 106.2

2007-08 39727 35825 19.89 14.80 110.9

2008-09 46345 40775 16.66 13.82 113.7

2009-10 51114 46249 10.29 13.42 110.5

2010-11 62148 54021 21.59 16.80 112.1

2011-12 69742 61855 12.22 14.50 112.0

2012-13 78958 67839 13.21 9.67 113.7

2013-14 88876 74380 12.56 9.64 119.1

11. Per Capita Income: The per capita income of the State as seen from the above table remained

below national average until 1999-2000, witnessed turn around in 2000-2001. The per capita GDP of

the State increased from 2.8% in the 1980 to 3.9% in the 1990s and to 4.8% during 2000-05. The

percapita income of the Stateremained higher than national average in all the years since 2000-2001

partly due to higher national average growth of the state’s economy and also largely due to moderation

in population growth. In the year 2013-14 for which the latest data is available, per capita income of the

State at current prices stood at Rs.88,876, as compared with the national average of Rs.74,920.

GROWTH OF POPULATION Year Percentage % decadal change

Decade ending 1991 24.2 Decade ending 2001 14.59 9.61 Decade ending 2011 10.98 3.61 12. As seen from above, the decennial growth of the population of the state, which was 24.2%

between 1981-91, declined to 14.59% between 1991-2001. It further came down to 10.98% between

2001-2011. While the population growth declined by an astounding 9.61 per cent during 1991-2001, the

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decline was 3.61 during the decade of 2001-2011. No other State or even nation had managed to reduce

the Total Fertility Rate (TFR) from 3.6 to 1.8, and stabilise the population growth in less than a decade.

This was made possible by the policies and programmes of the Government that focused on literacy

improvement, women’s empowerment and population stabilisation between 1995 and 2004.

LITERACY PROGRESS

Year Percentage % Increase

Decade ending 1990-91 44.1 Decade ending 2000-01 60.47 16.37 Decade ending 2010-11 67.02 7.19 13. Similarly, the major impetus given by the Government for expansion of quality education in the

second half of nineteen nineties, had resulted in a quantum jump in the literacy rates between 1991 and

2001. An astounding 16.37 per cent of the total population joined the literate pool during this decade.

This education march has stalled in its tracks during the past ten years, adding only 7.19 per cent to the

literate brigade, leaving one third of the adult population without the ability to read or write.

14. The comprehensive economic and fiscal reform package coupled with growth enhancing policies

and programmes implemented effectively between 1995 and 2004, which inter alia included a clear

development vision, effective governance, strategic investments in infrastructure, industrial

development, and employment generation; massive expansion of services and consequential exponential

increase in employment opportunities, development of Hyderabad as knowledge and information

technology hub, and establishment of well defined goals, objectives and the process for all round

development enshrined in VISION 2020, together had transformed the development paradigm of the

State and set the stage for a major leap of the State. Unfortunately, between 2004 and 2014, the

Governments had not only failed to harness the growth momentum of earlier years, and instead had

undermined the institutional dynamism and the growth-centred governance systems built between 1995

and 2004.

15. The deceleration of growth momentum that characterized the State during the past 5 years is a

matter of serious concern. While the global and national factors have partly contributed to the situation

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the major responsibility is attributable to the breakdown of effective governance, political upheaval and

sharp decline in the investors’ confidence in the State. Reorganisation of the State has further

accentuated the problems that would continue to haunt the residuary state of Andhra Pradesh.

3. State Finances 16. State Finances have been under stress for well over a decade on account of various factors such as

increase in the establishment costs (salaries and pensions), rising interest payments, welfare

commitments, power sector expenditure, etc.This fiscal stress is the result of expenditure commitments

rising faster than revenue receipts, less than anticipated returns from major projects in irrigation, power,

etc. and the increasing debt burden of the government. The structure of state receipts under the broad

categories of revenue and capital with figures for the last decade are given in the Annexure - I.

17. It needs to be noted that the enactment of Fiscal Responsibility and Budget Management Act

(FRBM) in 2005 mandating elimination of revenue deficit and containing fiscal deficit at 3 per cent of

the GSDP and the introduction of Value Added Tax (VAT) greatly contributed to the overall fiscal

stability of the State. The improvement in the State finances that started because of various reforms

initiated during late 1990s continued till 2007-08. The improvement in the fiscal situation during the

period was not only because of overall buoyancy in the economy but also due to tax reforms. The tax

rates, which were ranging from 4 to 20% during 2005, were replaced with Value Added Tax(VAT) that

brought out a sea change in tax structure. VAT rates were revised subsequently. Introduction of VAT

resulted in enormous growth in tax revenue. In addition, excise revenues, on account of increased

liquor consumption, showed greater buoyancy. There was also marginal improvement in the transfers

from centre from 4.95% of GSDP to 5.01 %of GSDP for the same period. However, since 2008-09 there

has been a slowdown in the revenue growth.

18. In this context, it is significant to note that while the per capita taxation in the State was Rs

2,266.90 in 2000-2001, it increased three fold to Rs 7,136.76 by 2010-11. Notwithstanding such a steep

increase in per capita taxation rates, the revenue accruals to the State exchequer have been showing

consistently downward growth spiral since 2008-09.

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4. State’s Own Revenue 19. The percentage of revenue expenditure that can be financed from the total revenue of the State

increased from 88 % in 2002-03 to 99.8% in 2005-06. A buoyant own tax revenue complemented by the

high devolution of central transfers based on the recommendations of the Twelfth Finance Commission

and lower growth rates of revenue expenditure contributed to this trend. In 2006-07, the state achieved a

revenue surplus situation of nearly 7% for the first time in a decade.

20. However, the situation has changed in the subsequent years. The revenue surplus, which was

nearly 1 % of GSDP in 2006-07, declined by 0.04 %to 0.24 % in the subsequent years. Similarly, the

primary deficit that achieved a surplus in 2006-07, turned negative in the subsequent years. The fiscal

deficit, which was 1.87% in 2006-07, increased to 2.41 percent and 2.91 percent respectively in

subsequent years. The state experienced turbulence in the fiscal situation, which was also attributable to

the overall economic slowdown period in 2008-09.

21. In theaccounts of 2010-11 and 2011-12, the proportion of revenue surplus in GSDP was 0.42

percent and 0.46 percent and that of fiscal deficit was 2 percent and 2.3 percent respectively. The Debt

Swap Scheme (DSS) and stoppage of plan loans from the centre reduced the interest payment burden

contributing to a change in the debt pattern. The savings in interest payments on outstanding central

loans under the Debt Consolidation and Relief Facility (DCRF) as recommended by the Twelfth

Finance Commission, contributed towards the declining trend in interest payments.

22. An analysis of States own tax revenue for the last decade in select years is presented below:

(Rs. Crores)

Table-3

States Own Tax Revenue

2004-05 2008-09 2013-14

Sales tax 11,041 21,852 48,737

State excise 2,093 5,753 6,250

Taxes on motor vehicles 1,169 1,801 3,335

Stamps and Registration 1,388 2,931 4,393

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Land Revenue 34 130 74

Profession tax 180 374 520

Others (including entertainment tax, electricity duty,

etc.

348 517 814

Total Tax Revenue 16,251 33,358 64,124

Note – Year-wise States Own Tax Revenues furnished in Annexure-II

23. The major components of State’s own non-tax revenue for the last decade in select years are

indicated as under:

(Rs. Crores)

Table-4

States Own Non-Tax Revenue

2004-05 2008-09 2013-14

Interest receipts (excl. contra Int.) 131.26 186.43 737.61

Forestry and Wild Life 121.69 93.22 203.65

Other Rural Development Programmes 186.02 556.82 689.3

Non-Ferrous Mining and Metallurgical Industries 873.53 1,684.98 2,730.56

Education, Sports, Art and Culture 69.14 111.68 1,675.55

Police 50.15 105.36 294.71

Major Irrigation 0 0 191.8

Others 744.61 3,643.93 1,040.94

Contra Interest 1,579.18 3,300.97 7,908.74

Total 3,755.57 9,683.4 15,472.86

Note – Year-wise States Own Non-Tax Revenues furnished in Annexure-III

24. The tax and non-tax revenue receipts of the State exhibited different trends during 2002-14 – an

upward movement in the revenue receipts during the first half of this period and a fluctuating trends

during the latter half of the period. This differentiation is important since the underlying economic

drivers – both at the national as well as international level have been different in these period(s).

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5. Economic Trends 25. The firm foundation for robust economic growth of the State was laid in mid nineteen nineties

and was consolidated during the subsequent years. By 2004, Andhra Pradesh was placed on a trajectory

of high growth momentum. Apart from fiscal consolidation, revival of the economy, the Government

expanded opportunities to its citizens through massive education expansion, expansion of employment

opportunities and substantial investments in infrastructure and development, apart from sustained efforts

to alleviate poverty and empower women and weaker sections. The measures implemented during 1995-

2004 period ensured sustainable all round development of the State.

26. The proportion of revenue receipts and total budgetary receipts as percentage of GSDP increased

between 2002 and 2007on account of the following factors:

ü The higher growth rate of state’s own tax and own non-tax revenue.

ü Higher economic growth rate.

ü Benefits of fiscal reform measures initiated during the late 90s specifically in improving

expenditure management, which included:

- The better maintenance of existing assets in preference to starting new projects;

- Completion of on-going projects through critical balancing investments;

- Launching new projects and schemes on strict cost-benefit criteria while taking into account

both positive and negative externalities;

- Performing a zero-based evaluation of every scheme and phase out ineffective ones;

- Base budgeting on a realistic estimate of resources to avoid over-stretched commitments

- Emphasizing quality of expenditure and evaluation of programmes on physical performance

indicators in addition to financial ones.

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ü It also included inviting private sector participation in the infrastructure sector and framing

growth-enhancing policies.

ü Higher growth rate of share in central taxes

ü Simultaneously, empowerment of the States, augmentation of tax (VAT), non-tax revenues and

reforms of State PSUs helped revenue growth

ü Fiscal deficit and revenue deficit have considerably improved

ü AP’s debt / GSDP ratio was well within the set limits

6. Economic Downturn 2008-14 27. It is clear from the data that the growth of State’s own tax revenueshave declined in the first three

years of the eleventh plan period. The overall economic downturn cycle also led to the following:

ü Components of own tax revenue showed declining growth rates during 2008-10.

ü Fluctuations in the growth rates of grants-in-aid

ü Substantial increase in debt and non-debt components of capital receipts in 2007-08.

ü Fall in growth rate of non-tax revenue and also share in central taxes.

ü Relatively lower economic growth rate

ü Revenue receipts as percentage of total receipts started declining from 14.84% during 2007-08 to

12.95% in 2013-14

ü Increased dependence on borrowings for the plan

ü GSDP growth fell precipitously from 2008-09 onwards

28. During 2002-14, while the revenue from state excise was more buoyant on account of increased

per capita liquor consumption, the revenue from sales tax, stamp duty and registration fee,etc., have

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been on par with the GSDP trends. On the other hand, the motor vehicle tax (MVT) has shown

significant slow down.

29. The total expenditure from 2004-05 to 2013-14 under Revenue, Capital and Loans and Advances

along with the share in total expenditure is depicted below:

7. Composition of Total Expenditure

30. The total expenditure from 2004-05 to 2013-14 under Revenue, Capital and Loans and Advances

along with the share in total expenditure is depicted below:

Table –5

(Rs. crores)

Year Revenue

Exp. Capital outlay

Repay-ments

Loans and

Advances

Total Shares in total expenditure

Revenue Exp.

Capital outlay

Repay- ments

Loans and

Advances 1 2 3 4 5 6 7 8 9 10

2004-05 31307 5414 7432 1593 45747 68.44 11.84 16.25 3.48

2005-06 34915 7662 5295 756 48628 71.80 15.76 10.89 1.56

2006-07 41438 9904 4253 907 56502 73.34 17.53 7.53 1.60

2007-08 53984 12774 4994 2921 74672 72.29 17.11 6.69 3.91

2008-09 61854 10366 4833 3413 80467 76.87 12.88 6.01 4.24

2009-10 63448 13793 6277 1590 85108 74.55 16.21 7.38 1.87

2010-11 78534 11123 7881 3315 10085

4 77.87 11.03 7.81 3.29

2011-12 90415 13722 6761 4983 11588

2 78.02 11.84 5.83 4.30

2012-13 102702 15149 7677 3913 12944

1 79.34 11.70 5.93 3.02

2013-14 110249 15280 7285 3689 13650

4 80.77 11.19 5.34 2.70 8. Revenue Expenditure 31. Among the different components the fastest growing items are the interest payments, salaries and

pensions despite the overall number of employees in Government & Public Sector dropping

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down(Annexure-XIII). Because of the sharp rise on these items investments in infrastructure sector

crowded out.

9. Capital Expenditure 32. Capital expenditure includes market borrowings mainly for Irrigation sector, Roads and

Bridges, Housing and capital works for welfare sectors like Education, Health etc. Prudent fiscal

management demands asurplus on revenue account to finance a part of the capital expenditure. The

capital expenditure,especially in our case is mostly financed by borrowings from open market and

externally Aided Projects. Unfortunately, the expenditure efficiency on irrigation, roads and bridges has

been questionable and most of the assets haven’t taken shape to give back results.

10. Debt Position 33. Composition of the total debt is given below –

Table-6

Composition of total Debt Debt outstanding as at the end of the fiscal year

(Rs. crores)

Year

Open Market Loans

Loans From

Central Govt.

Loans from Autonomous bodies,

etc.

Special Securities (Small Savings)

& Provident Fund,

etc. Total

% To Total Debt

GSDP

Debt outstanding

as % of GSDP

Open Marke

t Loans

Loans From

Central

Govt.

Loans from

Autonomous

bodies, etc.

Special Securities

(Small Savings)

& Provident Fund, etc.

1 2 3 4 5 6 7 8 9 10 11 12

2004-05 19,966 16,129 10,188 20,111 66,393 2,24,713 29.55 30.07 24.29 15.34 30.29

2005-06 21,348 16,045 7,566 25,449 70,408 2,55,941 27.51 30.32 22.79 10.75 36.15

2006-07 23,544 15,169 6,543 30,144 75,400 3,01,035 25.05 31.23 20.12 8.68 39.98

2007-08 29,186 15,126 7,083 31,084 82,479 3,64,813 22.61 35.39 18.34 8.59 37.69

2008-09 38,337 14,734 8,843 31,654 93,568 4,26,765 21.93 40.97 15.75 9.45 33.83

2009-10 51,623 14,808 9,282 33,630 1,09,343 4,76,835 22.93 47.21 13.54 8.49 30.76

2010-11 61,984 15,494 6,786 37,480 1,21,744 5,83,762 20.86 50.91 12.73 5.57 30.79

2011-12 75,090 17,265 5,595 37,695 1,35,646 6,62,592 20.47 55.36 12.73 4.13 27.79

2012-13 91,688 17,302 5,088 39,463 1,53,542 7,54,409 20.35 59.72 11.27 3.31 25.70

2013-14 1,11,374 18,644 3,891 39,941 1,73,849 8,57,364 20.28 64.06 10.72 2.24 22.97 Pre-

Actuals

Note - Details of Year-wise Debt Servicing Costs placed in Annexure-IV

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Year-wise Loans and Advances furnished in Annexure-V

34. Debt inherited by the State in 1995-06 was Rs 19,000 Cr. The total public debt in 2003-04 was Rs

58,770 Crore, indicating a total borrowing of only Rs 39,000 Crore in nine years. Whereas debt

increased from Rs 66,393 Crores in 2004-05 to Rs 1,73,849 Crores by 2013-14, which meant 1,07,456

Crores were borrowed over nine years. While the per capita debt in 2003-04 was around Rs 7,712, it has

increased three fold to Rs 20,573 in 2013-14. Every citizen of Andhra Pradesh today is paying three

times as much tax per capita, he / she paid in 2003-04 and has thrice as much debt accumulated as he /

she had in 2003-04.

11. Interest Payments

35. With the growing debt, interest payments have increased in both absolute terms as well as

percentage to GSDP. As the debt is being deployed for current consumption and to build low yielding

assets the burden of interest is growing much faster than revenue augmentation. In other words, debt-

servicing costs are eating into an increasingly larger share of new debt raised each year.

12. Plan Expenditure 36. The plan size depends on the resources available with the State, Central assistance under the

Gadgil formula and the net borrowings allowed by the Central Government. The composition of the

annual plan outlays for the last ten years is indicated below:

(Rs. Crores)

Table-7

Annual Plan Outlays

2004-05 2008-09 2013-14

Agriculture and allied sectors and Rural Development 1,382 5,665 7,427

Irrigation 3,444 9,017 10,209

Energy 2,096 3 284

Social Services 3,427 12,322 15,375

Transport 627 2,228 3,049

Others (Industries, General Economic Services etc.) 481 1,383 3,077

Total outlay 11,457 30,618 39,421

Note – Details of Expenditure on Salaries & Establishment furnished in Annexure-VI

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Details of Annual Plan Outlays furnished in Annexure-VII Details of Pattern of Plan Financing furnished in Annexure-VIII 37. The growth in plan outlay has been coming down in the recent past. There is a decrease in the

plan outlay during 2013-14 (3.66% over the previous year)

13. Salient Features on Expenditure Front 38. The annexure X gives the trends in developmental expenditure. As seen from the data funding

on social welfare infrastructure such as education & health, water supply & sanitation has not been

commensurate. Some of the key issues relating to expenditure trends include the following:

ü Capital expenditure dropped in the last five years from 3.5% to 1.79% ü The expenditure on pensions showed an increasing trend from 2002 onwards ü Increase in establishment costs (salaries & pensions), rising interest payments, welfare

commitments, power expenditure characterises recent performance

ü Fiscal stress is the result of expenditure commitment rising faster than revenue receipts, less than

anticipated returns from major projects in irrigation, power etc., and the increasing debt burden

on the Government

ü Power subsidy went up from Rs.1696.92 crores during 2005-06 to Rs.6617.36 crores by 2013-14

without any improvement in quality of power supplied or in meeting the demand

ü Share of expenditure on education, health & family welfare,industry & minerals has not

improved.

14. Capital expenditure trap 39. The expenditure, which used to be around 10% on irrigation and flood control, has doubled in

the last decade without any visible results. Most of the assets are non-performing despite huge

expenditure on this sector. Following table gives the account of monies invested in the last decade on

irrigation front.

19

Irrigation Expenditure

(Rs. in Crores) YEAR Expenditure (Plan)

2004-05 3458.86

2005-06 6680.99

2006-07 9153.71

2007-08 12248.70

2008-09 9020.23

2009-10 11759.41

2010-11 9703.66

2011-12 11416.43

2012-13 11075.44

2013-14 (PreActuals) 10210.83

Total Expenditure 94728.26

40. Notwithstanding the fact that Rs 94,728.26 crores were invested during the past ten years, almost

entirely on major irrigation projects, the total area irrigated by the canal systems has in fact declined

from 22.31 lakh hectares in 2004-05 to 22.16 lakh hectares in 2011-12, an abysmal performance by any

reckoning. Further, the per hectare cost of irrigation has increased exponentially between 2004 and 2014

due to skewed distribution of funds to projects without priority, unacceptably high cost and time

overruns on account of poor project management.

41. It is rather disconcerting to note that while Rs 10,070.31 crores were spent to irrigate a net area of

41.15 lakh hectares between 1995-96 and 2003-04, an amount of Rs 94,728.26 crores was spent between

2004-05 and 2013-04 to irrigate a net area of 45.67 lakh hectares. It means, effectively, for bringing an

additional area of 4.12 lakh hectares an exhorbitant amount of Rs 94,728.26 crore was spent during the

period 2004-05 to 2013-14.

20

II. Implications of State Division 42. Due to the variance in methodology adopted for allocation of revenue receipts and expenditure,

the residuary state of Andhra Pradesh will be facing tremendous fiscal challenges.

43. The total receipts of revenue including State’s own revenue, Central taxes devolution, grants and

market borrowings are going to be the same for both Telangana and residuary state of Andhra Pradesh -

with the entire Hyderabad revenue going to Telangana. However, on the expenditure side, due to the

allocation of debt, salaries, pensions and subsidies based on population ratio, the residuary State of AP

will have more i.e., 58% share, while Telangana will have only 42%.

44. The result is very high revenue deficit and fiscal deficit for the residuary state of Andhra Pradesh

– unprecedented and like never before. There has not been any revenue deficit for the State in the last

decade and fiscal deficit has never crossed 3% of GSDP so far. The residuary State of AP, unfortunately

will have a revenue deficit of 4.84% and a fiscal deficit of 7.18% - if the normal Plan voted by the united

State of AP Legislature is to be implemented reflecting the challenges ahead.

45. The percapita income of the residuary State of Andhra Pradesh vis-à-vis Telangana is given

below:

Per Capita Income (Current Prices)

(in Rupees)

Year AP % Telangana %

2004-05 25959 24409

2005-06 282238.72 28987 18.76

2006-07 32961 16.79 33381 15.16

2007-08 39780 20.69 39652 18.79

2008-09 44376 11.55 49114 23.86

2009-10 50515 13.84 51955 5.78

2010-11 58733 16.27 66951 28.86

2011-12 66754 13.66 73930 10.42

2012-13 76041 13.91 83020 12.30

2013-14 85797 12.83 93151 12.20

21

The percapita income is higher than Telangana during 2004-05but has come down since then.

(Rs. Crores)

Table-8

Revenue Expenditure on Salaries and Pensions as Proportion of State’s Revenue and Expenditure (Revenue account)

Expenditure on salaries, wages *Expenditure on establishment

and pensions as % of as % of

Own revenue Total

revenue Revenue

expenditure Own

revenue Total

revenue Revenue

expenditure

2001-02 66.65 46.53 41.11 12.55 8.31 7.35

2002-03 66.41 46.62 41.15 12.17 8.54 7.54

2003-04 65.47 42.42 38.21 15.17 9.83 8.86

2004-05 60.44 42.07 38.63 14.13 9.83 9.03

2005-06 58.82 39.96 39.10 10.81 7.54 7.53

2006-07 53.61 36.85 39.35 10.58 7.27 7.76

2007-08 51.13 33.86 33.96 10.71 7.09 7.11

2008-09 45.99 31.49 32.01 9.86 6.75 6.86

2009-10 55.25 36.71 37.43 9.29 6.18 6.30

2010-11 59.17 40.80 42.08 8.00 5.52 5.69

2011-12 57.72 40.09 41.48 9.21 6.39 6.62

2012-13 54.93 40.14 40.58 9.47 6.92 7.00 2013-14 Pre-

Actuals 57.83 41.57 41.75 9.84 7.08 7.11

2014-15 (V/Ac BE)

60.91 41.27 41.40 9.52 6.45 6.47

New AP 2014-15

73.60 43.47 31.48 10.37 6.06 4.44

* Non-salary O&M expenditure ( Non-Plan & Plan) Note - Details of trends in Developmental Expend. (X-Plan & XI-Plan Periods) furnished in Annexure - IX 46. The percentage of expenditure on salaries and pensions in the new State of Andhra Pradesh will

reach 73% of its own revenues from 58% in the combined State, leaving little scope for developmental

expenditure.

22

47. Details of Revenue Receipts and Expenditure placed in Annexure-X. The impact of division on

State Finances is brought out in a tabular form, placed below.

Table-9

Indicator Undivided AP Andhra Pradesh Telangana

Population (2014)Cr. 8.46 5.06 (58.32%

3.62 (41.68%)

GSDP (Rs. Cr.) 2013-14 8,54,822 4,75,859 (55.7%)

3,78,963 (44.3%)

Per Capita Income (Rs) 2013-14

88,876 85,797 93,151

States’ Own Tax Revenues (Rs. Cr.) 2014-15 Estimates

68,993.44 32,164.19 (46.6%)

36,829.25 (53.4 %)

Non-Tax Revenue 2014-15 Rs. Cr

16,461.2 8,635.98 (52.4%)

7,825.22 (47.5%)

Total Debt 2013-14 (excluding public a/c)

1,61,014 92,461 (57.4%)

68,553 (42.6%)

Debt /GSDP Ratio (2013-14) 18.8 19.4 18.1

Own Tax to GSDP Ratio (2013-14)

8.05 6.8 9.7

Borrowing Limits 2014-15 29,457 15839.17 13,617.83

Gap in Resources (2014-15 FY)

-14,080 - 18,236 +4,156

Gap in resources June 2014-March 2015

-12,136 -15,691 + 3,555

Likely Rev. Deficit for 2014-15

0.05 -4.84 N/A

Likely Fiscal Deficit for 2014-15

-2.59 -7.18 N/A

Note – Details of year-wise Fiscal Deficit and Interest Payments furnished in Annexure-XI Details of Income of Residuary State of A.P. and that of Telangana State given in Annexure-XII

23

48. As seen from the table, the residuary Andhra Pradesh is at a significant disadvantage vis-à-vis

Telangana State. First, the GSDP of the AP State is only 55.7 per cent of the combined State’s GSDP,

and the percapita income of the residuary AP State is much below the Telangana State.More

significantly, the AP State’s own revenues are far lower than that of Telangana; Andhra Pradesh State

with 58.32 per cent of the population earns only 46.6 per cent of the total revenues of the combined

State. Further, Andhra Pradesh has much higher debt burden compared to Telangana, as population

ratio was the sole criterion for apportionment of debt between the two States. The Debt/GSDP ratio of

AP is 19.4, compared to 18.1 of Telangana. The borrowing limit of AP is only Rs 2,222 crores more

than that of Telangana.

49. The resource gap for the current year is estimated at Rs 18,236 crores, which translates to about

4.84 per cent revenue deficit and 7.18 fiscal deficit. The resource gap for the ten-month period of the

current fiscal year is around Rs 15,691 crores, compared to Rs 3,555 crores surplus of Telangana. The

current context has positioned Andhra Pradesh in a fiscally precarious position.

Revenue receipts of residuary State of Andhra Pradesh

Rs. In crores Table – 10

Details Residuary State of Andhra Pradesh 2014-15

Estimates 2014-15

(for ten months) 1. Own Tax Revenue

Sales Tax 24,739 20,625

State Excise 3,730 3,458

Motor Vehicles Tax 971 799

Stamps &Registration 2,061 1,708

Other Taxes 663 558

Total Own Tax Revenue 32,164 27,148

Growth

2. Non-tax Revenue 8,836 7,940

Forests 116 103

Mines & Minerals 1014 856

24

R.D. Cess 338 258

Interest Receipts (incl. Contra int.) 5049

(4872)

4856

(4686)

Others 2319 1867

3. Receipts from GoI 29001 25231

Share of Central Taxes 15705 13462

FC Grants 4132 4132

Central Assistance (incl.CSS) 9164 7637

Total Receipts 70001 60319

Non-Plan Expenditure 2014-15 of residuary State of AP

The total Non-plan expenditure estimated for 2014-15 is as follows

(Rs. Crores)

Table - 11

Details Residuary State of Andhra Pradesh

2014-15

Estimates

2014-15

(for ten months)

Salaries 25989 21127

Pensions 9644 7233

Interest Payments 9802 9267

Power Sector:

a) Power Subsidy

b) Servicing of Power

Bonds

2626

875

2188

875

Rice subsidy 2030 1637

Natural Calamities Expenditure 1811 1744

Committed expenditure transferred from Plan

to Non-plan like salaries etc. of SERP and

RGUKT, industrial incentives etc.

4348 4348

25

Subsidies and other Grants 3048 2540

Maintenance Works 1077 897

Non-salary 2120 1766

Others (including contra interest of Rs.8344

crores and adjustment dues of

APSEB/GENCO etc.)

14989 14036

Total Revenue Expr. 78359 67658

Loans and Advances 786 786

Total Non-Plan Expr. 79145 68444

After finalization of estimates of non-plan expenditure, the resources available for plan are shown below

(Rs. Crores)

Table-12

Resource availability

Details

Un-divided State

Estimates 2014-

15

Andhra

Pradesh

2014-15

10 Months

1. State Government's Own Funds (a to c) -15,787 -17,301 -14,755

a) BCR - Balance from Current

Revenues

-14,080 -18,237 -15,691

b) MCR - Miscellaneous Capital

Receipts

-1,364 1,136 1,136

c) Adjustment of Opening Balance -343 -200 -200

2. Net Borrowings 29,457 15,837 12,195

3. Central Assistance

a) ACA & CSS

17,281

16,057

9,879

9,164

8,352

7,637

b) Plan Grants from GOI (13th FC) 1,224 715 715

Aggregate Resources available for Annual Plan 2014-15

(1+2+3)

30,952 8,416 5,791

26

50. As against the available resources for the Annual Plan, the requirement for the major on-going

plan schemes under State Plan against Revenue and Capital works /schemes as per vote on budget 2014-

15 are as follows:

(Rs. in crores)

Table-13

Revenue Expenditure (Plan)

Details 2014-15

Estimates

(Un-divided State)

2014-15

Estimates (Andhra

Pradesh)

Scholarships 1586 862

Reimbursement of Tuition Fee 2626 1469

ArogyaSree 925 537

Housing Programme 1360 803

VaddileniRunalu 650 453

SFC Grants to PR Bodies 300 182

Assistance to SERP 500 500

Externally Aided Projects 3769 1670

Centrally Assisted State Schemes (incl. matching

State Share)

18820 10740

Total 30536 17216

(Rs. Crores)

Table-14

Capital Expenditure (Plan)

Details 2014-15 Estimates

(Un-divided State)

2014-15 Estimates (Andhra

Pradesh)

Irrigation 13215 7716

Roads & Bridges 4243 2379

Housing 1001 591

MA&UD & PR 3224 192

27

Capital works for welfare Depts. 1454 822

Home 209 112

Others 2199 1660

Total 2. 25545 13472

Grand Total (1+2) 56081 30688

51. As seen from the above, it is observed that the available resources of Rs.8416 crores in respect of

Residuary Andhra Pradesh available for Plan Budget is not even sufficient to meet the Central Assisted

Schemes including matching State Share of Rs.10740 crores.

52. With the kind of Revenue deficit (i.e., 18237 crores for 2014-15 and Rs.15691 crores for 10 month

period ahead) the available resources left for plan are only Rs.8,416 crores for entire year and Rs.5,791

crores for 10 month period. Whereas, united A.P. assembly voted a Plan of Rs.30,688 crores. Further,

the Cabinet recently hiked social welfare pensions resulting in additional requirement of funds by

another Rs.2,048 crores.

53. Against the requirement of more than Rs.32,000 crores for the plan, as given in the table,

available resource are only Rs.5,791 crores. It means approximately Rs.26,000 crores are required

additionally over and above the limits approved by Government of India (GoI) for the current year

borrowing. This would require relaxation from the limits imposed by FRBM Act.

54. So far, Market borrowings are strictly used for capital expenditure. A stage has come now,

wherein, we will have to borrow significant amount for revenue expenditure without any asset getting

added.

55. A continuation of this trend may lead to fiscal imbalances, which may cause irreparable damage

to the economy and adversely affect growth and development of the State. Immediate corrective action

is required and the Government has to decide on an appropriate program to ensure that the fiscal

objectives of the state are achieved in a reasonably short period.

Conclusion 56. This paper is mainly intended to inform the public about the factual position of state finances so

as to generate an informed debate on various aspects of the state’s fiscal health and also to educate the

28

public on the adverse consequences of inaction and the necessity for adopting hard and difficult

measures to restore the fiscal health. The numerous problems affecting the state economy have to be

analysed scrupulously and the required corrective actions need to be implemented dispassionately. The

Government invites constructive suggestions and valuable advice from different groups in the society

and political parties in the state. This would help the Government in its endeavour to adopt proper

corrective action in a timely manner so that it can quickly bring fiscal discipline and financial stability.

57. The Government is committed to rectify the fiscal imbalances that have emerged in the past few

years. The task ahead is very arduous. Government may be left with difficult and painful options.

Government seeks the cooperation and support of the people in its endeavour to move towards the

course of fiscal correction.

58. Government will necessarily have to play a major role in implementing reforms with greater

thrust in parallel - so as to attract private initiative since it is equally vital for supplementing

government’s efforts. Collectively, it should be possible to shift Andhra Pradesh to a higher growth

trajectory - whereby it not only surpasses the national averages in economic performance but also

achieves the goals enshrined in the Vision 2020.

59. The statement of above factual scenario of the State finances is not in anyway meant to abdicate

our responsibility or go back on welfare and development commitments. Though the State is reeling

under the twin burden of decade long misgovernance and the State reorganisation, it will leave no stone

unturned in exploring the possibilities of mobilising resources required for sustainable development of

the State through innovative means and launch programmes and activities to make the economy boom

and keep the State on a sustained growth trajectory. All citizens are encouraged to become active

stakeholders in revitalising the economy and securing all round development.

****

Annexure-I

Actuals Actuals Actuals Actuals Actuals Actuals Actuals Actuals Actuals Pre-Actuals

1 2 3 4 5 6 7 8 9 10 11

A. States own revenue 20006.47 23897.82 30413.03 35857.58 43041.25 42978.93 55859.28 64977.75 75874.19 79596.38i. Tax 16250.91 19206.46 23925.19 28793.44 33357.85 35175.71 45139.55 53283.41 59875.05 64123.53ii. Non-Tax 3755.57 4691.37 6487.83 7064.13 9683.40 7803.22 10719.73 11694.34 15999.14 15472.86

BRevenue flow from centre 8743.03 10953.38 13832.45 18284.97 19817.20 21699.42 25137.03 28575.94 27956.09 31122.45

i. Tax devolution 6062.10 6951.82 8867.01 11184.25 11801.94 12141.72 15236.75 17751.15 20270.77 22131.89ii. Grants 2680.92 4001.56 4965.44 7100.72 8015.26 9557.70 9900.28 10824.79 7685.32 8990.56

CTotal Revenue Receipts (A+B) 28749.50 34851.20 44245.47 54142.55 62858.45 64678.35 80996.30 93553.69 103830.28 110718.83

D Loans from Centre 1840.89 522.31 314.57 908.99 396.90 1568.58 2244.06 2719.01 1182.98 1342.29

E Market Borrowings 3317.76 1956.37 2725.86 6650.00 10933.57 15383.10 12000.00 15500.00 20000.00 22411.64

F Deposits (net) 6225.77 9249.59 5153.00 2723.58 1812.49 844.51 699.43 3351.22 909.21 378.78

G Loans and Advances 1372.98 182.44 471.34 190.95 369.77 142.91 172.61 164.92 425.77 574.94H Other Loans 4674.11 1492.04 1509.79 3573.45 4022.18 2801.78 4478.42 1230.62 2127.71 1538.20

I Other Receipts 1889.32 6557.71

JTotal capital receipts (D to I) 17431.51 13402.75 12063.87 20604.68 17534.91 20740.88 19594.51 22965.76 24645.67 26245.85

STRUCTURE OF STATE RECEIPTS

2012-13 2013-142004-05 2005-06 2006-07 2007-08 2008-09

Revenue Receipts

Capital Receipts

2009-10 2010-11 2011-12Rs in crores

Annexure-II

Actuals Actuals Actuals Actuals Actuals Actuals Actuals Actuals Actuals Pre- Actuals

1 2 3 4 5 6 7 8 9 10 11

1 Sales tax 11040.60 12541.61 15467.08 19026.49 21851.66 23640.22 29144.85 34910.01 40714.67 48737.41% increase over pre. Year 13.60 23.33 23.01 14.85 8.18 23.28 19.78 16.63 19.70

2 State excise 2092.67 2684.57 3436.63 4040.69 5752.61 5848.59 8264.67 9612.36 9129.41 6250.26% increase over pre. Year 28.28 28.01 17.58 42.37 1.67 41.31 16.31 -5.02 -31.54

3Taxes on motor vehicles 1168.64 1355.74 1364.74 1603.80 1800.62 1995.30 2626.75 2986.41 3356.60 3335.18% increase over pre. Year 16.01 0.66 17.52 12.27 10.81 31.65 13.69 12.40 -0.64

4Stamps and Registration 1387.91 2013.45 2865.38 3086.06 2930.99 2638.63 3833.57 4385.25 5115.24 4393.18% increase over pre. Year 45.07 42.31 7.70 -5.02 -9.97 45.29 14.39 16.65 -14.12

5 Land Revenue 33.59 68.75 113.50 144.39 130.35 221.56 170.74 140.56 61.78 73.62% increase over pre. Year 104.66 65.10 27.21 -9.72 69.98 -22.94 -17.68 -56.05 19.18

6 Profession tax 179.81 226.67 311.75 355.54 374.35 430.36 490.33 539.90 580.01 519.95% increase over pre. Year 26.06 37.53 14.05 5.29 14.96 13.94 10.11 7.43 -10.36

Others (including entertainment tax, electricty duty, etc. 347.70 315.66 366.11 536.48 517.27 401.04 608.64 708.92 917.34 813.93% increase over pre. Year -9.21 15.98 46.53 -3.58 -22.47 51.77 16.48 29.40 -11.27

Total Tax Revenue 16250.91 19206.46 23925.19 28793.44 33357.85 35175.71 45139.55 53283.41 59875.05 64123.53% increase over pre. Year 18.19 24.57 20.35 15.85 5.45 28.33 18.04 12.37 7.10

2011-12Rs in crores

STATES OWN TAX REVENUE

2012-13 2013-142004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11

Annexure-III

Actuals Actuals Actuals Actuals Actuals Actuals Actuals Actuals Actuals Pre- Actuals

1 2 3 4 5 6 7 8 9 10 11

1Interest receipts (excl. contra Int.) 131.26 101.88 217.25 231.64 186.43 202.90 191.30 340.90 1765.58 737.61

2Forestry and Wild Life 121.69 137.93 87.11 90.92 93.22 103.11 139.06 149.22 168.78 203.65

3

Other Rural Development Programmes 186.02 187.66 230.70 296.61 556.82 563.48 535.34 716.92 703.17 689.30

4

Non-Ferrous Mining and Metallurgical Industries 873.53 1062.57 1321.25 1597.56 1684.98 1887.26 2064.86 2336.74 2771.04 2730.56

5Education, Sports, Art and Culture 69.14 69.35 139.55 61.35 111.68 55.09 237.95 675.02 1195.77 1675.55

6 Police 50.15 62.94 79.13 99.83 105.36 130.09 170.99 246.01 261.91 294.71

7 Major Irrigation 0.00 0.00 0.00 0.00 0.00 0.00 0.00 56.13 122.03 191.808 Others 744.61 1131.41 2398.92 1392.51 3643.93 212.66 1797.24 1235.48 1150.88 1040.949 Contra Interest 1579.18 1937.64 2013.92 3293.70 3300.97 4648.62 5582.99 5937.92 7859.96 7908.74

Total 3755.57 4691.37 6487.83 7064.13 9683.40 7803.22 10719.73 11694.34 15999.14 15472.86

2009-10 2010-11 2011-12Rs in crores

STATES OWN NON-TAX REVENUE

2012-13 2013-142004-05 2005-06 2006-07 2007-08 2008-09

Annexure-IV

Principal Interest Total1 2 3 4 5 6 7 8 9 10

2004-05 17393.20 12041.07 5352.13 7091.41 12443.54 71.54 20006.47 35.45 3.16

2005-06 9923.26 4621.02 5302.24 7008.1 12310.34 124.06 23897.82 29.33 2.74

2006-07 10484.42 6204.07 4280.35 7280.30 11560.65 110.27 30413.03 23.94 2.42

2007-08 13501.87 8031.70 5470.17 7588.72 13058.89 96.72 35857.58 21.16 2.08

2008-09 17703.31 11877.66 5825.65 8057.12 13882.77 78.42 43041.25 18.72 1.89

2009-10 22136.32 15932.76 6203.56 8913.59 15117.15 68.29 42978.93 20.74 1.87

2010-11 21852.27 14000.99 7851.28 9674.74 17526.02 80.20 55859.28 17.32 1.69

2011-12 22826.04 14857.18 7968.86 10560.77 18529.63 81.18 64977.75 16.25 1.61

2012-13 26890.46 17969.88 8920.58 11661.86 20582.44 76.54 75874.19 15.37 1.58

2013-14 28965.41 21835.74 7129.67 12910.64 20040.31 69.19 79596.38 16.22 1.53Pre - Actuals

Debt servicing costs (Rs. in crores)

Year Gross LoansNet

BorrowingsDebt Servicing

Debt Service as

% of Gross Loans

State's Own

Revenue

Interest payments as % of

state’s own revenue

Interest payments as % of GSDP

Annexure-V

YearOpening Balance

Amount advanced during the

year

Amount repaid

during the year Net Loans

Interest Received

1 2 4 3 5 6

2004-05 9418.57 1593.14 1372.98 220.16 55.41

2005-06 9638.73 756.49 182.44 574.05 9.18

2006-07 10212.78 906.69 471.34 435.35 4.22

2007-08 10648.13 2920.72 190.95 2729.77 9.95

2008-09 13377.9 3413.37 369.77 3043.6 3.57

2009-10 16421.5 1589.82 142.91 1446.91 2.57

2010-11 17868.41 3314.93 172.61 3142.32 22.99

2011-12 21010.73 4983.20 164.92 4818.28 75.04

2012-13 25829.01 3912.86 425.77 3487.09 106.56

2013-14 29316.10 3689.20 574.94 3114.26 141.89Pre - Actuals

LOANS AND ADVANCES BY THE STATE GOVERNMENT(Rs. in Crores)

Annexure-VI

States Own Revenue

Total Revenue Receipts

1 2 3 4 5 6 7 8

2004-05 5378.17 25.35 3692.48 3016.78 12112.78 60.54 42.13

2005-06 8597.40 21.03 1766.05 3196.95 13581.43 56.83 38.97

2006-07 9973.41 23.59 2144.60 4150.49 16292.09 53.57 36.82

2007-08 10945.65 33.78 2256.29 5092.13 18327.85 51.11 33.85

2008-09 12234.67 30.92 2264.68 5518.46 20048.73 46.58 31.90

2009-10 15439.24 36.16 2298.35 6339.02 24112.77 56.10 37.28

2010-11 20905.04 277.48 2809.67 9609.42 33601.61 60.15 41.49

2011-12 23489.61 39.68 3226.93 11109.85 37866.07 58.28 40.48

2012-13 26134.97 40.64 3819.61 12089.30 42084.52 55.47 40.53

2013-14 28790.12 51.77 3990.54 13682.31 46514.74 58.44 42.01Pre - Actuals

EXPENDITURE ON SALARIES AND ESTABLISHMENT(Rs. In Crores)

Year

Pay and Allowances and

Travelling Allowance Wages

Grants in-aid for Salaries Pensions

Total Expenditure

including Pensions (2 to 5)

Establishment cost as % of

Annexure-VII

(Rs. in Crores)2013-14

Pre-Actuals

1 2 3 4 5 6 7 8 9 10 11 12

1Agriculture and allied sectors and Rural Development 1381.62 1449.86 1972.47 2442.07 5664.90 4671.54 5925.21 8028.38 8339.20 7426.54

2 Irrigation 3444.09 6672.05 9147.55 12234.83 9017.10 11757.58 9701.13 11414.65 11073.61 10208.90

3 Energy 2095.93 56.83 37.45 27.62 2.59 12.06 507.67 1498.57 405.46 284.16

4 Social Services 3426.73 3387.79 4548.65 8159.18 12322.11 9497.98 12478.64 14772.00 15697.48 15374.75

5 Transport 626.99 1113.08 1322.62 1689.05 2228.31 2101.72 1948.71 2015.86 2373.11 3048.78

6Others(Industries,General Economic Services etc) 481.18 759.80 1178.24 2618.05 1382.67 1350.09 1015.00 1535.59 2332.18 2403.12

Total outlay 11456.54 13439.41 18206.98 27170.80 30617.68 29390.97 31576.36 39265.05 40221.04 38746.25

2008-09 2009-10 2010-11 2011-12 2012-13Sectors

Annual Plan Outlays

2004-05 2005-06 2006-07 2007-08

Annexure-VIII

(Rs. in Crores)

Sl. Item2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 Pre-

Actuals1 2 3 4 5 6 7 8 9 10 11 12

1 Balance from Current Revenues 1860.92 3988.05 8517.90 8401.92 13829.00 10750.79 16163.33 19475.47 19717.61 18651.02

2 Contribution to Public Enterprises

3 Market Borrowings 1290.88 1955.61 2725.86 6650.00 10933.57 15383.11 12000.00 15500.00 20000.00 22411.64

4 Development Bonds

5 Small Savings Loans 3476.96 4914.03 4143.77 387.44 323.20 1531.19 3005.75 718.00 636.27

6 State Provident Fund 347.23 481.39 719.02 756.58 583.28 960.99 1602.81 1220.36 3579.77 3667.94

7 Miscellaneous Capital Receipts 3797.57 3674.23 2216.32 7938.44 1463.33 124.63 -855.74 1821.30 -2394.82 -2547.37

8 Negotiated Loans 2506.23 994.34 1010.43 1425.76 1360.44 1123.70 1083.61 1230.62 1409.71 901.93

9 Power Bonds 1080.60 285.60 250.00 2070.68 243.61

10 Loan portion of EAP 506.89 309.49 894.00 394.51 865.01 2243.93 2719.01 1182.98 1342.29

11 Central Assistance 3247.52 1448.74 2372.37 3792.42 4039.44 4254.38 3318.59 3956.81 3222.60 2816.47

12 FC Grants 7.15 6.50 154.50 148.00 191.66 199.16 298.83 758.62 298.76 426.20

13 Adjustment of Opening Balance -457.22 375.05 191.93 -74.93 80.06 -318.18 263.94 -639.05 966.62 -468.30

14 Repayments -6994.97 -5351.02 -4399.13 -5197.18 -5169.85 -5469.53 -7663.26 -6761.00 -10066.94 -9864.28

15 Water Resource Development Corpn. 1303.69 200.00 2360.03 170.91

16 Withdrawal from Reserves

17 ARM

18 Deposits and Other Funds Net 1747.76 1447.24

19 Total Resources 11466.56 13479.41 18212.46 27193.13 30632.28 29405.25 31632.70 39282.14 40382.05 39421.05

PATTERN OF PLAN FINANCING

Annexure-IX

Developmental Exp* 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2002-07 2007-12 2002-12 2012-132013-14

Pre-Actuals

A Social Services 31.3 29.7 31 30.8 37.4 35.3 38.1 38.2 31.1 36.3 34.6 38.3 35.9

a Education, Sports, Art and Culture 12.3 12.4 11.7 9.7 9.6 10.8 13.5 13.8 12.4 11.8 12 14.1 14.5

b Health and Family Welfare 4 3.9 3.7 3.7 4.1 4.3 4.6 4.7 4 4.3 4.2 4.6 4.6

c Water Supply, Sanitation, Housing and Urban Development6.2 5.6 6.2 8.9 11.2 6.8 6.7 5.7 5.9 7.6 7.1 5.3 2.3

d Informationa and Publicity 0.1 0.1 0.1 0.2 0.4 0.3 0.1 0.3 0.1 0.2 0.2 0.2 0.2

e Welfare of SC ST and other BCs 4 3.3 3.8 3.8 4.5 4.3 5.4 5.7 3.8 4.8 4.5 6.5 6.0

f Labour and Labour Welfare 0.2 0.2 0.2 0.2 0.3 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2

g Social Welfare and Nutrition 4.4 4.1 5.3 4.3 7.5 8.5 7.5 7.7 4.4 7.2 6.3 7.5 7.9

h Others 0 0 0 0 0 0 0.1 0.1 0.1 0.1 0.1 0.1 0.2

B Economic Services 33.6 38.6 38.6 42.7 37.3 37.4 32.8 34.1 35.5 36.4 36.1 35.8 33.1

a Agriculture and Allied Activities 4.5 2.9 2.9 3.1 5 3.2 3.3 3.9 3.3 3.7 3.6 3.9 3.1

b Rural Development 4.7 4.6 4.7 4.3 4.1 3.1 3.9 3.4 4.7 3.7 4 3.0 3.5

d Irrigation and Flood Control 13.7 20.3 21.8 22.6 16.7 21.2 16.8 16.2 15.9 18.4 17.6 16.5 14.4

e Energy 5.7 4.2 3.1 6.6 4.9 4.1 4.6 5.4 5.5 5.1 5.2 5.7 5.9

f Industry and Minerals 1 0.8 0.6 1 0.6 0.5 0.6 0.5 0.9 0.6 0.7 0.8 0.7

g Transport 3.2 4.4 4 3.8 4 3.3 2.4 2.9 3.9 3.2 3.4 3.8 3.8

i General Economic Services 0.8 1.4 1.5 1.4 2.1 2 1.3 1.8 1.3 1.7 1.6 2.1 1.7

Total (A+B) 64.9 68.3 69.6 73.5 74.7 72.6 71 72.3 66.6 72.7 70.8 74.1 69.0

TOTAL EXP* 100 100 100 100 100 100 100 100 100 100 100 100 100

* includes Revenue, Capital and Loan Accounts

Trends in Developmental Expenditure* – X Plan and XI Plan Periods

(As % of Total Expenditure)

Annexure-X

Year Revenue ReceiptsRevenue

ExpenditureSurplus/Deficit

1 2 3 4

2004-05 28749.50 31307.33 -2557.83

2005-06 34851.19 34915.30 -64.11

2006-07 44245.47 41438.40 2807.07

2007-08 54142.55 53983.56 158.99

2008-09 62858.45 61854.22 1004.23

2009-10 64678.35 63447.93 1230.42

2010-11 80996.30 78534.26 2462.04

2011-12 93553.69 90415.36 3138.33

2012-13 103830.28 102702.39 1127.89

2013-14 - Pre Actuals 110718.82 110248.78 470.04

(Rs. crores)

Revenue receipts and expenditure

Annexure-XI

YearTotal

ExpenditureInterest

Payments Fiscal Deficit GSDP

Fiscal Deficit % to GSDP

Revenue Surplus/ Deficit

Revenue Deficit % to

GSDP1 2 3 4 5 6 7 8

2004-05 45747 7091.41 8192.23 224713 3.65 -2557.83 -1.14

2005-06 48628 7008.1 8299.85 255941 3.24 -64.11 -0.03

2006-07 56502 7280.30 5642.96 301035 1.87 2807.07 0.93

2007-08 74672 7588.72 8787.00 364813 2.41 158.99 0.04

2008-09 80467 8057.12 12405.83 426765 2.91 1004.23 0.24

2009-10 85108 8913.59 14009.54 476835 2.94 1230.42 0.26

2010-11 100854 9674.74 11803.47 583762 2.02 2462.04 0.42

2011-12 115882 10560.77 15401.93 662592 2.32 3138.33 0.47

2012-13 129441 11661.86 17508.02 754409 2.32 1127.89 0.15

2013-14 Pre-Actuals 136504 12910.64 17915.77 857364 2.09 470.04 0.05

Fiscal deficit and Interest Payments(Rs. crores)