AP Govt imposes 20% cut in Non-Plan Expenditure

Hyderabad, Oct 28 (INN): The Andhra Pradesh Government has decided to impose 20 per cent cut on Non-Plan Expenditure.

The decision was taken during the review meeting held by Finance Minister Yanamala Ramakrishnudu on Monday. However, the minutes of the meeting were released only on Tuesday. The minister has reviewed the trends in expenditure of the State of Andhra Pradesh with the officials of the Finance Department.

The AP Government, however, clarified that there would not be any cut on the inevitable expenditure like salaries, professional and contract services, stipends, scholarships, etc.,

The review meeting centred on the level of revenue deficit and Fiscal deficit, so far incurred by the Government during second quarter of the FY 2014-15. The Minister observed that the fiscal position of the State is alarming. It is noticed that the revenue expenditure during second quarter of the FY 2014-15 is more by about Rs 4000 crore, accounting for about an increase of 48%, when compared to the revenue expenditure during the second quarter of the last financial year. This largely resulted in the revenue and fiscal deficit. In addition to the increased revenue expenditure, there is substantial increase in the Non Plan expenditure.

The Non Plan expenditure during the second quarter of this financial year is around Rs.12,700 Crores, which is more by nearly Rs.2,700 Crores when compared to the revenue expenditure during the second quarter of the last financial year. It accounts nearly an increase by 27%. On the whole the total expenditure posted an increase by about 20% during the second quarter of this financial year 2013-14. when compared to the total expenditure incurred during the corresponding period of the previous financial year. In absolute terms the total expenditure during the second quarter of the year is Rs.17,500 Crores.

The Finance Minister instructed the officials to ensure that the key fiscal parameters do not deteriorate by keeping the revenue expenditure under control. He further instructed the officials to keep in view the revenue deficit and market borrowings also and to work out a strategy to prioritise the financial requirements of the State and release the budget, only whenever essential.

The Minister also instructed the officials to coordinate with the revenue earning departments and try to explore the possibility of the mobilisation of additional revenue resources to reduce the revenue deficit. The officials are told that the revenue deficit should not exceed the proportion, envisaged in the annual budget, under any circumstance.