AP Finance Minister Justifies State's Borrowing To Keep Economy Running
Andhra Pradesh Finance Minister Buggana Rajendranath on Friday justified borrowing by the state government, saying it was "pumping money" into the economy to keep it running as people faced financial problems due to COVID-19.
The state government borrowed 73,912.91 crore between April and January during the 2020-21 financial year, as against the target of Rs 48,295.59 set in the Budget.
The gross debt peaked to Rs 3.75 lakh crore now and the Finance Minister said debt servicing alone would cost Rs 25,000 crore to the exchequer from the 2021-22 fiscal.
"We have been pumping money into the economy to keep it running as people faced financial troubles due to the COVID-19 outbreak.We are not the only state to borrow heavily, even the Government of India borrowed Rs 12 lakh crore this year," the Finance Minister observed.
Addressing a press conference, the minister said the state's revenue took a dip due to COVID-19 and the extra borrowing was to fill the shortfall.
The additional borrowing was possible as the Centre enhanced the Fiscal Responsibility and Budget Management (FRBM) Act limit by two per cent, against the normal 3 per cent of the Gross State Domestic Product, he pointed out.
The state earned a revenue of Rs 88,238.70 crore till January, which was 54.48 per cent of the target for the year, which was over six per cent more than the corresponding period in the last fiscal.
The revenue expenditure, including that on the many freebie schemes, touched Rs 1,42,282.25 crore till January.
Of that, Rs 15,131.14 crore went towards interest payment on previous loans.
"We have incurred a capital expenditure of Rs 19,000 crore, which is significantly higher than the Rs 6,800 crore the previous year.So, there are visible benefits, though we are borrowing heavily, unlike during the previous TDP rule," the minister noted. PTI DBV BN BN
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