Why TDP says Jagan Reddy pushing Andhra Pradesh to bankruptcy
In a Christmas Day challenge, former Andhra Pradesh finance minister Yanamala Ramakrishnudu has dared chief minister Jagan Mohan Reddy to a public debate on the distressing condition of the state’s finances, accusing him of lying about the economy that he said was “in the doldrums”. The challenge is with a caveat. Ramakrishnudu wants the debate in the presence of Comptroller and Auditor General (CAG) officials.
Ramakrishnudu alleges that the state was not divulging details on the huge loans it has mobilised. He says the YSR Congress government has not revealed complete facts to constitutional and statutory institutions such as the CAG, and that the CAG has stated that the Andhra government has not been submitting accounts and reports. Further, he alleges that the chief minister was trying to mislead people with claims that his government had borrowed less than its predecessor.
The borrowings of the Andhra Pradesh government have exceeded its revenue receipts, and this is leading to an extraordinary financial crisis, which may lead it fast to bankruptcy,” says Ramakrishnudu. “It has already crossed all debt barriers. The government has deviated from the cardinal economic principle of using borrowings from set creation. Instead, it is diverting all borrowings for unproductive purposes.”
The former finance minister is known to seldom fall back on rhetoric and usually speaks after a study on the subject at hand, be it the state’s economy or legislative matters. “The total borrowings made by the governments at the Centre, from 1956 to 2019, were Rs 2.53 lakh crore, while the YSR Congress government in Andhra mobilised loans worth Rs 6.38 lakh crore in its three-and-a-half-year rule. The figure might well be over Rs 10 lakh crore by the time the Jagan Reddy government demits office,” says Ramakrishnudu.
Further, he says the previous Telugu Desam Party (TDP) government had allocated a major chunk of the borrowings to capital expenditure, while in the present dispensation the loans were allotted under revenue expenditure. Alleging lack of transparency, he says the state government, as pointed out by the CAG, had not mentioned in its budgets about the Off Budget Borrowings (OBB) in three successive budgets of 2019-20, 2020-21 and 2021-22. “The state has also not made public how much loans it has availed through the various corporations and other institutions,” he says, demanding that the balance-sheets of the corporations be put in public domain and the chief minister explain the real situation of the finances.
According to Ramakrishnudu, the YSR Congress government has, in the first half of the current financial year, borrowed about Rs 58,000 crore under the Open Market Borrowings (OMB) against the budgeted allocation for Rs 48,000 crore. And by the end of the financial year, these borrowings would cross the Rs 1 lakh crore mark, which was double the budgeted allocation, he adds. Besides, the government had availed OBB of Rs 4.4 lakh crore. Together, with the OMB, the total borrowings in the last three-and-a-half years was about Rs 8.52 lakh crore. “As far as the OBB is concerned, the government has gone against the financial norm to increase the borrowing limit from 90 per cent to 180 per cent,” he claims.
Ramakrishnudu contends that whichever government comes to power next will have to repay at least Rs 1 lakh crore a year—this when the total budget of the state is around Rs 3 lakh crore. “When we (TDP) handed over power to the YSR Congress in 2019, the growth rate was around 10.22 per cent. Now, it is minus 1.8 per cent, which clearly shows the chief minister is either ignorant of the facts or distorting it to his convenience,” he says.
Besides, Ramakrishnudu claims that in the Direct Benefit Transfer (DBT) schemes, Andhra was in the ninth position in the country. “If DBT is a success story as is being claimed by the chief minister, why is poverty around 21 per cent and inequality around 43 per cent? This clearly indicates large-scale corruption and the poor becoming poorer under YSR Congress rule,” he says.
Ramakrishnudu demands the government release a White Paper on the Rs 85,000 crore “that has gone missing from the accounts”. He alleges that there is no response from the state government to this even after the CAG asked for a detailed clarification.
Ridiculing Ramakrishnudu, and without commenting on the challenge to a debate, Andhra finance minister Buggana Rajendranath has termed the Opposition as experts in manipulating figures. He says the TDP government made borrowings of not less than 4 per cent every year during 2014-19 even as the 14th Finance Commission put the fiscal responsibility and budget management (FRBM) limit for the state at 3 per cent. Rajendranath says the Jagan Reddy government had made 2.1 per cent debts only in 2021-22 (during the Covid pandemic) against the 15th Finance Commission’s FRBM limit of 4.5 per cent.
Stating that a staggering Rs 1.85 lakh crore in aid was extended to people after the formation of the YSR Congress government, he emphasises that Rs 1.35 lakh crore was directly credited into the bank accounts of SCs, STs, backwards and minorities under various welfare schemes. A total benefit of Rs 1.45 lakh crore was provided to people under the non-DBT schemes. “This reflects our government’s commitment to the welfare of the poor and downtrodden,” asserts Rajendranath. But in the absence of a debate to impress voters, it is only their endorsement at the polling booths in the 2024 assembly election that will determine whether profligacy is paying in the long term.
