Amaravati, Jul 11 (IANS): YSR Congress Party government in Andhra Pradesh on Wednesday said it inherited crippled state finances from previous government and commenced its journey with liabilities to GSDP ratio of more than 35 per cent.
A day ahead of the beginning of budget session of the state legislature, the government released a white paper on state finances.
It stated that the resources are limited, the debt servicing obligations are overwhelmingly huge, and the vast unavoidable liabilities had placed the government in an unenviable situation.
Releasing the white paper, Finance Minister B. Rajendranath said the debt of the residuary state of Andhra Pradesh which was Rs 97,000 crores at the time of bifurcation of united Andhra Pradesh reached a whopping Rs. 2,58,928 crores by 2018-19.
"The interest on the debt alone is projected to be over Rs 20,000 crore per annum, in addition to the repayment of principal to the tune of another Rs 20,000 crore," it said.
According to the paper, there are also huge contingent liabilities to the tune of Rs 58,000 crore in the form of guarantees given for loans availed by state government entities.
The YSRCP government alleged that the previous Telugu Desam Party (TDP) government borrowed recklessly and splurged on wasteful expenditure.
According to it every citizen of the state has debt burden of more than one lakh rupees with Rs.10,000 interest per year.
It noted that the fiscal deficit increased steeply from 2.11 per cent of GSDP in the pre-bifurcated Andhra Pradesh to 4.43 per cent in 2016-17, a trend that showed no sign of abating.
"Then government had abandoned all principles of prudence by not only breaching the 3 per cent of GSDP threshold and used borrowed funds for financing revenue expenditure, but also resorted to uncontrolled extra-budgetary borrowing," it said.
It alleged that new projects were taken up without any financial resources, with a clear intention to bequeath a bankrupt state to the present government.
"Further, during the last five years, the government has indulged in financial malpractices. Diversion of funds without regard to the requirements of the departments and corporations has resulted in huge damage to the financial and operational health of various sectors."
"To make matters worse, the then government launched new schemes months before the 2019 general elections, with the sole purpose of deriving unfair advantage in the elections," it alleged.
The white paper noted that the promises made in the Parliament while bifurcating the state have remained unfulfilled leading to great financial and social distress in the state. It also slammed TDP government for failing to achieve Special Category Status for the state.