Increasing reliance on off-budget borrowings casts a shadow

The Budget for the financial year 2026-27 reveals that Andhra Pradesh is navigating a complex financial landscape. The government seems to be increasingly relying on “off-budget” mechanisms, specifically State-backed guarantees, to fund its essential machinery.

Finance Minister Payyavula Keshav on Saturday presented the ‘Statement of Government Guarantees’ as a part of the 2026-27 Budget. The total guaranteed amount availed as of December 31, 2025, touched ₹3,11,182.28 crore.

The budget document revealed that while guarantees issued by the State Government exceed ₹3.11 lakh crore in sanctioned exposure, the actual outstanding principal against these guarantees stood at ₹1,77,033.88 crore.

In addition, outstanding interest liabilities amount to ₹294.60 crore as on the reporting date.

A significant portion of the exposure includes guarantees that are yet to come into force.

An amount of ₹27,000 crore under “Conditional Guarantees,” indicate commitments that will become operational only upon the fulfilment of specified conditions. Of this, ₹25,000 crore pertains to the A.P. State Development Corporation (APSDC), while ₹2,000 crore relates to the A.P. Road Development Corporation (APRDC).

The Energy Department accounts for a major portion, with outstanding principal of ₹41,888.66 crore and bonds amounting to ₹14,198.80 crore. The Consumer Affairs, Food and Civil Supplies Department has an outstanding principal of ₹38,748.45 crore, while the Agriculture & Cooperation Department accounts for ₹14,454.27 crore in outstanding principal.

Other significant liabilities include the Excise Department (A.P. State Beverages Corporation Ltd.) with ₹15,222.07 crore in outstanding principal, and the Water Resources Department with ₹8,155.06 crore. The MA&UD Department also holds a substantial liability, with ₹11,200.66 crore outstanding in principal and ₹1,100 crore in bonds.

Regarding the broader debt position, the State’s liabilities include loans from various financial institutions. Specifically, the outstanding debt to the National Bank for Agriculture and Rural Development (NABARD) is ₹8,506.90 crore.

These figures, presented alongside the guarantees, provide a comprehensive view of the State’s total fiscal commitments as of year-end 2025.