Under the ycp government's reign, Andhra Pradesh's debts have exploded and now total an astounding Rs 8.51 lakh crore. It appears that the Fiscal Responsibility and Budget Management (FRBM) Act, which is thought to serve as a restraint on the states' ability to borrow money, no longer serves to prevent the ycp government from looking for alternate sources of funding. According to economist and former deputy chairman of the ap State Planning Board C. Kutumba Rao, this is because of the provisions in the Money Bill that make it simple to pay financial and budgetary expenditures.
The FRBM Act was enacted in 2003–2004, and the Centre made a decision to close the revenue gap by 2008, however this was subsequently delayed until 2025. As a result, the Center cannot force the states to abide by the guidelines because it is experiencing financial difficulties. According to him, neither the states nor the centre take any significant action when the FRBM Act is broken. As long as the state uses the money to construct assets that can provide for the needs of future generations, borrowing loans is not a problem.
However, the ycp government spent only a pitiful Rs 4,500 crore as of August, well short of the Rs 31,000 crore it had set as its objective for 2022–2023 under capital spending, which is meant to be used for development projects. According to him, a worrying element is the disparity between the amount of money being borrowed and the amount spent on capital expenditures. The financial expert observed that whereas capital expenditure in ap continues to be pitifully low, debt levels have skyrocketed. 4.15 lakh crore of the 8.51 lakh crore ($13.8 billion) is public debt, and the remaining 1.38 lakh crore ($1.38 billion) was borrowed through various government agencies.
The FRBM Act was enacted in 2003–2004, and the Centre made a decision to close the revenue gap by 2008, however this was subsequently delayed until 2025. As a result, the Center cannot force the states to abide by the guidelines because it is experiencing financial difficulties. According to him, neither the states nor the centre take any significant action when the FRBM Act is broken. As long as the state uses the money to construct assets that can provide for the needs of future generations, borrowing loans is not a problem.
However, the ycp government spent only a pitiful Rs 4,500 crore as of August, well short of the Rs 31,000 crore it had set as its objective for 2022–2023 under capital spending, which is meant to be used for development projects. According to him, a worrying element is the disparity between the amount of money being borrowed and the amount spent on capital expenditures. The financial expert observed that whereas capital expenditure in ap continues to be pitifully low, debt levels have skyrocketed. 4.15 lakh crore of the 8.51 lakh crore ($13.8 billion) is public debt, and the remaining 1.38 lakh crore ($1.38 billion) was borrowed through various government agencies.
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