Union Budget 2015-16: Andhra asks Centre to fulfill promises made during bifurcation

Revenue deficit of the state for the next five years is around Rs 100,000 crore

By M Suchitra
Published: Friday 27 February 2015


Cash-starved Andhra Pradesh seems to have pinned all its hopes on Narendra Modi government's first full-fledged budget to be presented by Union Finance Minister Arun Jaitley on February 28. The state expects the Centre to fulfill all the promises it had made during bifurcation of the state and help it tide over the grave financial crisis facing the state economy.

While passing the Andhra Pradesh Reorganisation Act in March last year, the Congress-led UPA government of Manmohan Singh had promised to give special category status and a special financial package for development of Andhra Pradesh. “But the promises have not been fulfilled so far,” the state‘s finance minister, Yanamala Ramakrishnudu, told Down To Earth. “We expect the Narendra Modi government to fulfill all the promises made during bifurcation,” he said.

The minister said the state’s revenue deficit for the next five years is Rs 100,000 crore. For the current financial year, the deficit is about Rs 16,000 crore. “We expect the Centre to plug the revenue deficit. Otherwise, how can we take development projects and fulfill our promises to people in this grave scenario?” asked the minister. 

The state, which is in the last stage of finalising its first full budget for 2015-16, is also expecting a liberal approach from the 14th Finance Commission to accelerate growth. 

The minister pointed out that the state government has plans to develop a world-class capital since Hyderabad, which serves as the joint capital for the time being, will serve only Telangana after 10 years. “The Andhra Pradesh Reorganisation Act had mentioned that the Centre would provide financial support for creation of essential facilities in the new capital. We have pinned all our hopes on the upcoming Central budget,” said the minister.

The Andhra Pradesh Reorganisation Act, 2014, had accorded national status to the controversial Indira Gandhi Polavaram dam project under construction in West Godavari district. The project is expected to irrigate 0.28 million hectares of land in Visakhapatnam, Krishna East and West Godavari districts. 

However, no special allocations were made in the interim budget last year. The cost of the project estimated in 2009 was Rs 16,010 crore. This has escalated to Rs 20,000 crore as per 2014 estimates due to delay in executing the project. About Rs 5,500 crore have already been spent on the project, and the state has planned to complete it in the next three years. This means around Rs 5,000 crore will have to be spent annually in the next three years. The state hopes that at least this time, the Centre will make efforts to fulfill its commitment, said the minister.


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