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Eye on 2024 polls, debt-hit Jagan govt hikes budget for welfare schemes by 11%, says common man is priority

Andhra's debt for 2023-24 is pegged at Rs 53,610 crore, up from the estimate of Rs 48,545 crore for FY 2022-23. The total Andhra Pradesh debt is at Rs 4.83 lakh crore.

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Hyderabad: The Andhra Pradesh government Thursday presented its budget for the financial year (FY) 2023-24 with an expenditure outlay of Rs 2.79 lakh crore, allocating about 20 per cent of it for direct benefit transfer (DBT) welfare schemes, an increase of 11 per cent from the previous year.

The state is headed for assembly polls next year.

Of the total expenditure, revenue expenditure was pegged at Rs 2.28 lakh crore, while capital expenditure (CapEx) was at Rs 31,061 crore. 

Any state’s budget is usually split between its revenue expenditure and CapEx. Revenue expenditure covers salaries, interest payments and allocation for welfare schemes, and CapEx is the money spent on infrastructure projects, education, health sector, agricultural projects.

While revenue expenditure yields no returns to the government, focus on CapEx is expected to yield returns, albeit in the long run. 

While there is no exact threshold on how much a state should spend on CapEx, it is advisable to spend about 30-40 per cent of the budget on CapEx. Andhra’s CapEx (2023-2024) was 35 per cent lower than their estimate of Rs 47,996 crore in FY 2022-23.

Fiscal deficit for FY 2023-24 was pegged at Rs 54,587 crore, 3.77 per cent of the GSDP (Gross State Domestic Product), while revenue deficit was estimated to be Rs 22,316 crore, 1.54 per cent of GSDP.

Fiscal deficit is a measure which indicates the difference between the income and expenditure, and Andhra’s fiscal deficit has been on the rise for the past four years. Fiscal deficit in 2022-23 was 3.64 per cent of GSDP.

Debt for 2023-24 is pegged at Rs 53,610 crore, up from the estimate of Rs 48,545 crore for FY 2022-23. The total Andhra Pradesh debt is at Rs 4.83 lakh crore.

Andhra Pradesh’s fiscal health has been a concern and the state government has been facing criticism for widening debt, low revenue and increasing expenditure, especially on welfare. The Reserve Bank of India, last year, while analysing the financial health of states named Andhra as one of the top 10 states with high debt.

The Comptroller and Auditor General (CAG) noted that Andhra is using a significant amount of its borrowings to repay the mounting debt.

Also Read: ‘Rising debt, low revenue’ — delay in salaries of govt employees highlights Andhra’s fiscal trouble

Schemes under DBT 

The government has allocated Rs 54,228 crore for direct benefit transfer (cash transfer schemes — DBT) for FY 2023-24, an 11 per cent increase from the previous year’s Rs 48,668 crore. 

A total of 22 schemes are covered under the DBT category and the majority of them saw an increase in the budget allocation.

To enable students from the economically weaker section to pursue higher education, the government increased the allocation for ‘Jagananna Vidya Deevena’ scheme by 12 per cent to Rs 2,841 crore. 

It increased the allocation for the ‘YSR Cheyutha’ scheme, which provides financial assistance to women aged between 45 and 60 years, by 20 per cent to Rs 5,000 crore for the financial year. 

Other schemes under the category include ‘YSR Kapu Nestham (financial assistance to eligible women from Kapu, Balija, Telaga communities)’, ‘YSR Vahan Mitra (financial assistance to self-employed auto, taxi drivers)’, and ‘YSR Matsyakara Bharosa (providing financial assistance to families of deceased fishermen, and those who end up with permanent disability)’.

Ever since Y.S. Jagan Mohan Reddy took over as chief minister in 2019, the Andhra Pradesh government has spent about Rs 1.97 lakh crore on DBT schemes, according to the budget document.

“Our previous government built castles in the air. They spoke about Microsoft, Bill Gates, bullet train and what not. But, my journey is with the common man, with the economically weaker sections,” Jagan Mohan said Wednesday when he spoke about DBT schemes in the assembly.

My goal is to eradicate poverty, which is why my economics is different. Only if economically weaker sections strengthen, will the society strengthen, and then the state. I have believed it, followed it and implemented it.

“This is my economics, politics and this is what I have learnt from my father as history.”

He also announced an increase in the monthly pension amount to Rs 3,000, from Rs 2,750.

Sectors such as education, municipal administration, health, roads and buildings also saw an increase in the budgetary allocation for FY 2023-24. There has also been an increase in budget allotted for backward classes welfare, and development of Scheduled Castes/Scheduled Tribes.

The GSDP is projected to be Rs 14.49 lakh crore for FY 2023-24, a growth of 10 per cent, compared to the revised estimate of Rs 13.17 lakh crore in FY 2022-23, according to the budget statement.

(Edited by Geethalakshmi Ramanathan) 

Also Read: Panel to track MoUs, bonhomie with Ambani — how Andhra investors’ summit could boost Jagan’s image



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