Fiscal Squeeze in AP: State Borrows ₹49,134 Crore to Fund Day-to-Day Expenses

According to data from the Comptroller and Auditor General (CAG), Andhra Pradesh accumulated a revenue deficit of ₹36,942.36 crore between April and July. In just the first four months of the financial year, the state exhausted 167.9% (nearly 168%) of its ₹22,002.50 crore budget target for the entire year. This represents a sharp increase from the 110.71% recorded during the same period last year, giving Andhra Pradesh the highest revenue deficit among all Indian states.
Alongside this gap, the state’s overall fiscal deficit climbed to ₹49,134.15 crore, consuming 64.7% of the full-year target of ₹75,868.08 crore, compared to 60.5% during the corresponding period last year. To cover the shortfall between daily spending and receipts, the state turned heavily to open-market loans, accumulating over ₹49,134 crore in net debt across these four months. Borrowings averaged roughly ₹12,284 crore per month, peaking at ₹15,521 crore in July.
A revenue deficit occurs when normal earnings-such as state taxes, non-tax revenue, and central transfers-fail to cover routine operational costs like salaries, pensions, welfare distributions, and loan interest. This forces the government to use expensive borrowed funds just to keep daily operations running, rather than investing in long-term infrastructure like roads, irrigation, and industrial hubs. While state revenues typically pick up in the second half of the fiscal year, these early figures underline the steep fiscal challenge the TDP-led coalition faces in balancing extensive welfare commitments with growing debt.