Former Finance Minister Yanamala Ramakrishnudu said Andhra Pradesh Government has to grapple with multiple challenges in presenting the Budget for FY 2026-27, fiscal consolidation and financial discipline being the major issues.
In a press release, he observed that the revenue deficit has to be kept under control and, at 9%, the State’s revenue is lower than that of several major States. Therefore, increasing revenue should be the primary objective.
“Priority must be given to productive expenditure,” he said, while noting that borrowing is inevitable to cover the fiscal deficit.
Mr. Ramakrishnudu commented that there is a 0.50% difference in total tax revenues between the 2019-24 and 2025-26 periods of the coalition government. This has to be reduced towards achieving fiscal discipline. The rationalisation of GST rates may contribute to an increase in revenues.
He hoped that the 16th Finance Commission will provide more financial assistance against the backdrop of a 1% fall in the tax devolution by the Centre to States consequent to the recommendation of the 15th Finance Commission.
Further, Mr. Ramakrishnudu said borrowings are inevitable to sustain a capital expenditure higher than that of the Jagan Mohan Reddy government, which allegedly failed to create assets and squandered borrowed money on unproductive expenses.
The fiscal profligacy of YSR Congress Party government resulted in a massive debt servicing burden, as it took loans amounting to thousands of crores of rupees at exorbitant interest rates.
“The GSDP growth rate should be 17.50% at current prices to reach the Vision 2047 goal,” he said, adding that the steady increase in GSDP will facilitate higher revenues.
