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AP State Gets Ready To Adjust To New Reality


The “measly" allocations to the State in the Union Budget seem to have impacted the preparation of the State budget, which is scheduled to be presented on March 10. The government has decided to make changes to its financial planning for 2016-17.

The State Cabinet, chaired by Chief Minister N. Chandrababu Naidu, discussed the issue of 'Union Budget — allocations to the State', here on Wednesday. The Cabinet felt that the paltry allocations would adversely affect the State's planning and vision. The Centre's meagre allocation to bridge the resource gap was a major impediment, it felt.

The government is heavily banking on the Centre to bridge its resource gap and has expected flow of funds this fiscal. It is estimated that the State would face a deficit of Rs.16,500 crore. But, there is no mention of it in the budget. The Cabinet also discussed the allocations made to Polavaram project.

The government has taken up the project and set 2018 as deadline for completing phase-I of the project. The Centre, however, allocated only Rs.100 crore for the project this year. The Centre was supposed to release Rs. 2,300 crore for the project. The Cabinet is learnt to have discussed the possibility of utilising the Nabard funds for the Polavaram project.

Nevertheless, the Cabinet decided to mount pressure on the Centre to release funds to bridge the resource gap and also for the Polavaram project. The State faced a revenue deficit of Rs.13,776 crore close to two years after bifurcation. Of the Rs.14,430-crore revenue deficit finalised by the Accountant-General for the year 2014-15, the Centre has so far sanctioned Rs.2,303 crore.

The State is banking on the provision in the AP State Reorganisation Act, 2014, that the Centre would make budgetary provision for the revenue deficit of 2014-15.

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