AP debunks debt-trap theory, contrasts TDP govt’s 169 pc liabilities with YSRCP regime’s 58 pc

AMARAVATI: Andhra Pradesh is not in a Rs 10-lakh crore debt trap, as falsely propagated by a section of media, asserted Chief Minister’s Special Secretary for Finance and Economic Affairs Duvvuri Krishna.

Addressing a press conference at the State Secretariat in Amaravati on Thursday, he dispelled the fears being fanned to this effect by opposition-affiliated media, particularly vernacular newspaper Eenadu and said that it was being done with the intent to tarnish the image of the Andhra Pradesh government through false propaganda on its finances.

Krishna said that G V Rao, the author of the article published in Eenadu, was not known either for his knowledge or prowess in finance and economic affairs.

“The article seems to have been written at the behest of Ramoji Rao by a less known person without substantiating his argument with statistics that are available in the public domain,” he observed.

Debunking the allegation of increased liabilities under the YSRCP government, Duvvuri Krishna said that in the annual report of the Reserve Bank of India (RBI), titled ‘State Finances – A Study of Budgets,’ the total outstanding liabilities of Andhra Pradesh at the end of March 2023 were estimated at Rs 4,42,442 crores. The outstanding liabilities of the combined state of Andhra Pradesh on March 31, 2014 was Rs 1,96,202.40 crore, he added.

“To this, Rs 7,333 cr will be added as this is the fiscal deficit for the first two months of the 2014-15 financial year. Of this, 58 percent, as per the State Reorganization Act, is devolved to the successor State of Andhra Pradesh,” the Chief Minister’s special secretary explained.

He argued that the liability of AP at the time of the formation of the TDP Government in June 2014 was Rs 1,18,051 crores and the same had increased to Rs 2,64,451 cr as on March 31, 2019.

“However, the TDP Government was in existence till almost the end of May 2019 and during the first two months of the financial year 2019-20, the government borrowed another Rs 7,346.56 crores. Therefore, by the time of the dissolution of the TDP government, the liabilities have swollen to Rs 2,71,797.56 crores.”

Duvvuri Krishna further claimed that the debts secured by the PSUs without the strength of a government guarantee could not be regarded as government debts.

Attributing the spurt in liabilities to the earlier regime of Chandrababu Naidu, he clarified that the outstanding liabilities had increased by 169 percent during the five years of the TDP government. “This translates to a compounded annual growth rate in liabilities of 21.87 percent during 2014-19. As against that, the outstanding liabilities have increased by only 58 percent during the four-year YSRCP rule between 2019 and 23,” he said.

He said that the outbreak of the COVID-19 pandemic had also resulted in an estimated revenue loss of Rs 66,116 crore while the pandemic-related expenditure was also significantly high.