Why Chandrababu Naidu’s poll promises pose a challenge to Andhra’s fiscal math
The TDP promised welfare schemes, dubbed Babu Super Six, in the run-up to the polls. Cumulatively, these poll promises could add up to as much as Rs 60,000 crore annually.
TDP chief N Chandrababu Naidu faces the challenge of fulfilling these promises while managing the state's finances. (PTI Photo)
WITH THE Telugu Desam Party’s election promises including cash payments to unemployed youth and children, free travel to women and free LPG cylinders, estimated to cost a whopping Rs 60,000 crore, the party’s demand for a special package from the NDA government gains urgency as the new state Finance Minister Payyavula Keshav prepares to present a budget in July.
The total debt of Andhra Pradesh, under YS Jagan Mohan Reddy government, jumped 67 per cent to Rs 4,42,442 crore as on March-end 2023 over four years since he took charge. The state’s gross fiscal deficit estimated at Rs 55,817.50 crore as on March 31, 2024, has seen a 57 per cent increase from Rs 35,441 crore in 2018-19.
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An uphill task now awaits TDP chief N Chandrababu Naidu, who took oath as Chief Minister of Andhra Pradesh on Wednesday. Sources in the Central government said while a Special Category Status may not be forthcoming since it will trigger similar demand from other states, the finance ministry may consider special packages including more Central funds for some of the big projects such as the Amaravati capital city project.
The TDP promised welfare schemes – dubbed Babu Super Six – in the run-up to the polls which include free bus travel for women, three free LPG cylinders per year for all households under the Deepam Scheme, an annual dole of Rs 18,000 for every woman above the age of 18, an yearly allowance of Rs 15,000 per year for children under the “Talliki Vandanam (Salute to the Mother)” scheme, Rs 3,000 per year for unemployed youth and free clean drinking water supply to households.
The exact estimates of how much each of the schemes under “Super Six” is going to burden the Naidu government is yet to be ascertained, sources said. But cumulatively, Naidu’s poll promises could add up to as much as Rs 60,000 crore a year, they said.
Before he begins tackling the financial challenges, Naidu will require Rs 4,500 crore to disburse social pensions to about 65 lakh beneficiaries by July 1 apart from the Rs 6,000 crore required for salaries of government servants.
According to the state’s vote-on-account budget for 2024-2025, the total revenue receipts are estimated at Rs 2,05,352.19 crore while the expenditure was pegged at Rs 2,30,110.41 crore.
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A former state administrative officer told The Indian Express that Naidu has a tall order to achieve given the financial situation of the state. Another senior officer said the state’s debt burden could be much higher if off-Budget borrowings and debt of the public sector is also included.
“The state was facing a fiscal disaster as bad financial practices like raising the debt on state-run enterprises were adopted by the YSRCP government. A granular analysis of the debt burden is the need of the hour,” he said.
Apart from the welfare scheme-related expenditure, the development of Amaravati, which Naidu announced almost immediately after the election result, is likely to also financially burden the state. “Developing a capital is an expensive affair and costs have almost doubled since 2019, when construction was halted after the YSRCP came to power,” a retired IAS officer said. Jagan had abruptly scrapped Naidu’s plan to develop Amaravati as the capital and floated his own three-capital proposal, which is entangled in a legal battle currently, citing “decentralised governance”.
The TDP, however, hopes that the Centre would come to its rescue. “Despite such a huge victory and being a key constituent of the NDA at the Centre, we did not demand anything except support for Andhra Pradesh. Also, we will generate additional wealth by bringing in investment into the state,” TDP national spokesperson Pattabhi Ram Kommareddy told The Indian Express.
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However, a civil servant said it would be interesting to see how the state manages to generate revenue without increasing taxes. “Centrally-sponsored schemes could go a long way in helping the state,” he said.
Nikhila Henry is an Assistant Editor at The Indian Express, based in Hyderabad. With a career spanning 17 years, she has established herself as an authoritative voice on South Indian affairs, specialising in the complex intersections of politics, education, and social justice.
Experience & Career: Nikhila commenced her journalism career in 2007 as an education correspondent for The Times of India in Hyderabad,where she gained recognition for her coverage of student politics. Her professional trajectory includes a four-year tenure at The Hindu, where she focused on minority affairs and social welfare. In 2019, she took on a leadership role as the South Bureau Chief for The Quint, where she directed regional coverage across all five South Indian states. Her expansive career also includes a tenure at the BBC in New Delhi and contributions to prestigious international outlets such as The Sunday Times (London) and HuffPost India.
Expertise & Focus Areas
Nikhila’s reportage is marked by a deep-seated understanding of grassroots movements and institutional policy. Her core focus areas include:
Regional Politics: Comprehensive analysis of the socio-political dynamics across South India.
Education & Student Movements: Chronicling the evolution of Indian academics and the rise of youth activism.
Minority Affairs: Rigorous reporting on the welfare, rights, and challenges facing marginalized communities.
National Beat: Elevating regional stories to national prominence through investigative and on-ground reporting.
Authoritativeness & Trust
A respected figure in Indian media, Nikhila is not only a seasoned reporter but also an accomplished author and editor. She authored the critically acclaimed book The Ferment: Youth Unrest in India and edited Caste is Not a Rumour, a collection of writings by Rohith Vemula. Her dual background in daily news reporting and long-form authorship allows her to provide readers with a nuanced, historically-informed perspective on contemporary Indian society.
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