Over the past five years, the YSR Congress Party, led by YS Jagan Mohan Reddy, has significantly increased the debt of Andhra Pradesh. This year, the government has borrowed an unprecedented amount, raising concerns about its financial management. In recent months, the state has taken on excessive debt to cover last year’s outstanding payments.
Typically, Andhra Pradesh would not borrow more than Rs. 5,000 crores per month. However, under Jagan Mohan Reddy’s leadership, this figure has surged to Rs. 7,000 crores, and in the current financial year, it has further increased to Rs. 10,000 crores per month. If this borrowing trend continues, the state’s debt could surpass Rs. 1 lakh crore in just one year, a worrying scenario.
In the last week of March, the Andhra Pradesh government submitted an indicative calendar to the Reserve Bank of India, detailing its planned borrowing for the first three months of the financial year. Shockingly, the government indicated it would borrow Rs. 13,000 crores in April and Rs. 5,000 crores in May. However, the actual borrowing has already exceeded Rs. 21,000 crores.
The central government usually sets a loan limit for the first nine months of each financial year. This time, it set the limit for six months, allowing Andhra Pradesh to borrow Rs. 47,000 crores. Based on this limit, the state could borrow an average of Rs. 8,000 crores per month. However, Jagan’s government has been borrowing around Rs. 10,000 crores per month, exceeding the limit.
To repay the pending payments from the last financial year, the state has resorted to taking on more debt. The government has announced plans to borrow Rs. 14,000 crores this year specifically for Direct Beneficiary Transfer (DBT) schemes. Despite generating an income of about Rs. 1.3 lakh crores through taxes last year, averaging Rs. 10,800 crores per month, the state’s borrowing has surpassed its tax revenue. This raises serious questions about how the government plans to manage and repay its growing debt.
