Hyderabad: Andhra Pradesh, which is facing steep revenue deficit post its bifurcation in June 2014, presented a ₹ 1.35 trillion budget for fiscal 2017 on Thursday.

The size of the budget for 2016-17 was 20% higher than last year’s ₹ 1.13 trillion.

The non-plan expenditure that goes towards payment of interest, subsidies, wages and pensions of employees was estimated to grow 10% to ₹ 86,554.55 crore, while the estimated plan expenditure on welfare, development and capital expenditure programmes was projected at ₹ 49,134.44 crore, an increase of 43%.

The rise in plan outlay comes on the back of higher allocations to the irrigation and near-doubling of the outlay for the social sectors.

The government has raised the plan outlay for the irrigation sector to ₹ 7,325 crore, of which ₹ 3,660 crore has been allotted to the Polavaram multi-purpose dam on the Godavari river.

The centre has promised to fund the entire cost of the Polavaram project as compensation to Andhra Pradesh for the economic loss it sustained due to bifurcation.

The plan outlay for social sectors, including housing, has been increased to ₹ 21,556.97, while outlay for agriculture and allied sectors is at ₹ 16,250.58 crore.

The state estimated the revenue deficit to be around ₹ 4,868 crore in 2016-17, an 18% jump compared to ₹ 4,140 crore the previous year.

The fiscal deficit for 2015-16 was at ₹ 17,004.91 crore, and is expected to be ₹ 20,497.15 crore in 2016-17, the government said.

The state government said the state continues to carry the revenue deficit of ₹ 13,897 crore, an overhang of 2014-15, as a consequence of “irrational bifurcation of the state".

“We expect the central government to step up its support to the state development plan (SDP) in the form of increased central assistance and special grants, apart from ₹ 3,000 crore to partially offset the revenue deficit of 2014-15," said state finance minister Yanamala Ramakrishnudu, who presented the budget before Andhra Pradesh legislative assembly.

Ramakrishnudu said construction of the new capital city of Amaravati would require about ₹ 15,000 crore- ₹ 18,000 crore over the next three to four years.

The government allotted ₹ 1,500 crore towards building the new capital in 2016-17.

The ₹ 1,500 crore would be used as seed equity to enable the Capital Region Development Authority (CRDA) to mobilise additional resources required for capital construction from infrastructure financing institutions and the market, Ramakrishnudu said.

Andhra Pradesh lost its previous capital, Hyderabad, to Telangana, when the country’s 29th state was carved out in June 2014. It has 10 years to build a capital city during which time Hyderabad will remain the joint capital of the two states, as per the AP Reorganisation Act 2014.

There were some bright spots in the budget. According to the Andhra Pradesh government, the state registered a growth rate of 10.9% in 2015. Agriculture registered a growth of 8.4%; the services sector recorded a growth of 11.39%; and industry grew at 11.13%.

The per capita income of the state has crossed the ₹ 1 lakh threshold to reach ₹ 1.07 lakh in 2015, the government announced.

“The Chandrababu Naidu government wants a big leap forward. The leap is contingent upon two things—one is the central government’s generosity in supporting Andhra Pradesh, and the other is controlling growing fiscal deficit," said political analyst K. Nageshwar.

“The numbers indicate that the financials are on the right track. They were able to control non-plan expenditure and increase plan expenditure. Allied sectors like fisheries, livestock, food processing and tourism have done well," Nageshwar added.

“The double-digit growth is commendable, given the challenging environment, said Suresh Rayudu Chitturi, chairman of the state chapter of the Confederation of Indian Industry.

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