“A.P. spent Rs 6,700 crore on COVID-19”

Additional expenditure to the state government that is entirely on account of the Covid-19 pandemic is close to Rs. 6,700 crores, according to a note on debt by the state government.

The Covid-19 pandemic has wrecked havoc on the State finances. Even if the assessment of the financial loss to the State is done on a conservative basis, a minimum loss of Rs. 21,500 crores would come to light. Revenue loss on account of State’s share in Central taxes alone is Rs. 7,780 crores and loss on account of State’s own revenues is Rs. 6,961 crores, taking the total revenue loss to Rs. 14,742 crores.

2020-21 is an extraordinary year during which the entire world has been subjected to pain and stress of unprecedented proportions. The global outbreak of the Covid-19 pandemic has necessitated Governments to impose lockdown to contain the spread of the infection as this was the need of the hour. However, this has resulted in an economic upheaval. The pandemic has taken a very heavy toll, both in terms of loss of lives and economic burden. To enable the economy to regain its lost momentum as well as to protect people from the deadly virus, the Governments had to incur heavy expenditure despite the steep fall in revenues. Consequently, there was an overreliance of debt.

What is particularly disturbing is that, even in 2019-20, i.e. before the pandemic outbreak, the economic growth in the Country was dismal.

The country passed through very difficult times, the outbreak of the pandemic forced the Central Government to impose lockdown. As a consequence, the Real GDP during the first quarter of this financial year contracted by 23.9% over the corresponding period of the previous year. In addition to the above issues, the State of Andhra Pradesh was facing many more disabilities. The unjust bifurcation, the non- fulfillment of the commitments made to the State, the misgovernance and policy paralysis during the five-year period 2014- 19 has resulted in the State facing overwhelming odds. The borrowings during the period 2014-19 reached alarming levels, the note said.

Note of AP Debt – VI

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