A.P.’s revenue deficit exceeded FRBM target of 2.7% in 2024-25, says report

The Andhra Pradesh government’s revenue deficit has exceeded the Fiscal Responsibility & Budget Management (FRBM) target of 2.70% of the GSDP, remaining at 3.75 per cent in 2024-25 fiscal year, forcing the State to borrow for day-to-day expenses and significantly increasing its interest burden. 

On the other hand, the fiscal deficit reamined at 5.05% against the mandated 4% ceiling, driving total borrowings to ₹81,071 crore, crowding out capital expenditure, worsening debt sustainability, and severely restricting fiscal space for future growth, according to the Accounts at a Glance for 2024-25 prepared by the Principal Accountant General of A.P. under the direction of Comptroller & Auditor General of India (CAG). 

These are some of the key account disclosures in the report, which was tabled in the Legislative Assembly by Finance Minister Payyavula Keshav on Friday. 

The report said understatements of revenue expenditure and cash balances and an overstatement of capital expenditure had an impact of nearly ₹6,120 crore on State finances, wherein it was mentioned that the revenue expenditure and cash balances were understated as ₹3,375.60 crore and ₹95.70 crore while the capital expenditure was overstated as amounting to ₹2,648.92 crore. 

The figures were noted as misclassifications or noncompliance with statutory provisions, which impacted the State finances during the given year. The report said the State government, in 2024-25, had not disclosed the quantum or source of proposed off-budget borrowings (OBBs) in its Budget. 

The government informed the Union Ministry of Finance that no OBBs were availed during the year, and that there was an amount of ₹27,241.99 crore outstanding by March 31, 2025. A scrutiny of the vouchers revealed that the government budgeted and spent ₹7,240.57 crore towards assistance or grants on account of OBBs and the government has been asked to confirm the same, the reported pointed out.

Further, it was mentioned that, in accordance with the relevant Government Orders, institutional loans were routed through Personal Deposit (PD) accounts to the extent of ₹1,580.78 crore. This procedure of depositing the loans to PD accounts overstated the liability under Public Account if the amount remained unspent by the end of the year. 

The report observed that the remittance of ₹862 crore by A.P. State Beverages Corporation Limited through a single challan stating the purpose as ‘transfer of special margin to consolidate fund of the State towards NTR Bharosa Pension Scheme’ was faulty as the amount should not have been remitted under tax revenue.