Andhra Pradesh Finance Minister K Rosaiah on Wednesday blamed the previous Telugu Desam government, under the stewardship of hi-tech Chandrababu Naidu, for ruining the state's economy and pushing the state into a debt trap over the last nine years.
The previous government, when it took the reins of the state for the second time in 1994, had inherited one of the fast-growing economies, with a net revenue surplus, a positive asset-liability ratio and a state with a large industrial and scientific base and a very well diversified local entrepreneurial base, the finance minister said in his budget speech in the Andhra Pradesh Assembly.
"Embarking upon highly lopsided and fanciful policies, the past government has led the State into a state of high level of indebtedness in less than nine years. Despite registering a very high growth rate in tax revenues, and having raised Rs 165,911.50 crore (Rs 1,659.115 billion) as tax revenues, the state still suffered huge cumulative revenue deficit of Rs 21,720.92 crore (Rs 217.209 billion) for the period and, as a result, a large part of the borrowings of the state government, essentially meant for creating new assets, has gone into meeting the revenue deficit," he claimed.
Rosaiah quipped that he was sad that "I have inherited a completely debt-trapped state, with adverse asset-liability ratio, lower GSDP (gross state domestic product) growth rate compared to the national average, eroded human development index and a state with an annual agricultural growth rate of 1.14 per cent for the last 10 years period as against what was 3.19 per cent for the preceding decade."
He pointed out that despite borrowings (state debt) going up to a whopping Rs 57,588 crore (Rs 575.88 billion), no major new assets have been created in the last nine years. "The fact that the government spent only Rs 22,276.44 crore (Rs 222.764 billion) on capital expenditure bears ample testimony to the mounting unproductive expenditure of the state government during the last 10 years," he contended.
The finance minister alleged, "From 1995, no new major industrial project has come into the state, nor did the government complete any new major irrigation project. On the other hand, many large and medium industrial projects in the State were closed down, causing loss of employment to lakhs of industrial workers. The average annual growth in employment in the State for the period 1994-2000 had fallen to 1.1 per cent from 2.4 per cent for the period 1983-94."
He further alleged that AP slipped from ninth position to 10th position on the Human Development Index in 2001. The asset-liability ratio of the state fell from 1.01:1 in 1995 to 0.63:1 for the year 2002-03.
"The asset-liability ratio calculated exclusively for the last 10-year period alone would further bring down this ratio, signifying that a state, which was solvent in 1994, is no more so, considering the report of CAG," he added.
Pointing out that the GSDP growth rate of the state for the period 1980-91 was higher than the national average GDP growth rate of 5.68 per cent at constant prices, Rosaiah said that this has not only come down to 5.55 per cent during the period 1995-2002 but also fallen below the national average GDP growth rate of 6.13 per cent.
The GSDP growth rate of the state for 12002-03 has further fallen to 2.43 per cent as against the national average of four per cent, signifying that the economic growth of the state had taken a severe bearing during the last 10 years.
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