Bifurcation left AP with economic crisis: Yanamala

Hyderabad, March 12 (INN): Finance Minister Yanamala Ramakrishnudu blamed the bifurcation of Andhra Pradesh for the economic crisis in the residuary State.

"While the united State of Andhra Pradesh has been a revenue surplus state, the division made the residuary state a huge revenue deficit State. There has been a huge impact of State bifurcation on the State Finance and that the State is not even left with reasonable resources for a meaningful plan outlay," he said while presenting the State's Budget for the financial year 2015-16 in Legislative Assembly on Thursday.

"The provisions made in the AP Reorganisation Act 2014 for the development of the State of Andhra Pradesh signify tokenism and they not in any compensation the loss of opportunity for the people of Andhra Pradesh due to the division of the state. Income generation and employment opportunities, health and educational institutions, Research and Development and training facilities and social infrastructure are grossly inadequate in the new state. The decision to bifurcate the state without even finalising the capital city itself signifies an epitome of irresponsibility," he said.

The Finance Minister said that even after taking into account the devolution on account of 14th Finance Commission recommendations and expected resource flow out of Union Budget 2015-16, the State continues to reel under revenue deficit and this deficit continues even after the last year of the award of 14th Finance Commission. "Our debt burden and fiscal deficit will continue to increase as we keep borrowing to meet revenue expenditures," he said.

"We had requested 14th Finance Commission to provide us with a grant of Rs 100,213 crore for Capital construction and Rs 41,253 crore for other critical infrastructure requirements. It provided only Rs 22,113 crore as revenue deficit grant and Rs 1,823 crore towards Disaster Management. As against the requirement of Rs 29,805 crore for Urban Local Bodies projected by us, only Rs 3,636 crore has been provided and for Rural Local Bodies as against the requirement of Rs 18,633 crore, only Rs 8,654 crore have been provided," the Finance Minister said.

"Our own tax and non-tax revenues are barely sufficient to meet our salaries, pensions and non-salary expenditure commitments. Our non-tax resource base is very low. The 14th Finance Commission did not consider the special problems faced by the successor State of Andhra Pradesh on account of bifurcation," he said.