02-23-2005, 04:08 AM
From Deccan.com, 22 Feb.,2005...
<!--QuoteBegin-->QUOTE<!--QuoteEBegin-->Every Telugu owes Rs 11,000
Â
Hyderabad, Feb. 22: Every man, woman and child in the State has a debt burden of Rs 11,000. If the State government has its way, this will go up to Rs 16,714 next year. <b>Alarmingly, the asset to liability ratio has melted to 63:100 from 101:100 in 1994. This means for every Rs 10 that the State owes its lenders, it owns assets worth Rs 6. Meaning, the huge borrowings have not translated to assets.</b>
The Stateâs total outstanding public debt stands at Rs 75,619 crore, up by a whopping 500 per cent during the past decade. It was Rs 15,614 in 95-96. It will go up to Rs 1,17,000-crore next year if the Congress government takes loans for the 26 proposed irrigation projects. Against this, the State earns just Rs 35,976 crore â or less than half the current debt. The poor asset-to-liability ratio indicates that most of the borrowings have gone into meeting the revenue deficit.
Economists do not fault the government for going in for loans but they say the money should not be spent on paying salaries or cutting the revenue deficit. Noted economist and DC columnist Jayati Ghosh says the TD government had spent on luxury consumption and unproductive works like building stadia. âDebts per se are not bad. What is important is the way the money is spent. If money is not spent on people it will not yield growth. Problems arise when loans are used on unproductive heads,â she points out.
Planning Commission former member Ch Hanumantha Rao agrees with Ghosh but argues the financial position of Andhra Pradesh is not bad, its debt notwithstanding. âWe are still within the limits. There are many States which are financially worse than Andhra Pradesh. It is a healthy sign that the State has reduced its revenue deficit,â he observes.
<b>According to Rao, the Stateâs economic growth depends on how the government spends the borrowed money. If it spends on irrigation, power and roads the government will be in a position to repay the debts. Money obtained through loans should not be spent on revenue heads like salaries. The government has decided to clear the revenue deficit, which stands at Rs 1,401 crore, by next year. It stood at Rs 1,461 crore last year. </b>
Andhra Pradesh is the only State besides Karnataka to bring lower the revenue deficit. Indeed, Chief Minister YS Rajasekhar Reddy has asked his party legislators and ministers not to seek any project or work that involves revenue expenditure.
âIf we do not curb the revenue deficit, we will become another Uttar Pradesh and Bihar,â he warned them on Tuesday. <b>Tamil Nadu, Andhra Pradesh, Maharashtra and Karnataka have a debt to Net State Domestic Product ratio higher than 30 per cent. It is more than 50 per cent in States like Bihar, Orissa, Punjab, Himachal Pradesh and Sikkim have.</b>
<!--QuoteEnd--><!--QuoteEEnd-->
<!--QuoteBegin-->QUOTE<!--QuoteEBegin-->Every Telugu owes Rs 11,000
Â
Hyderabad, Feb. 22: Every man, woman and child in the State has a debt burden of Rs 11,000. If the State government has its way, this will go up to Rs 16,714 next year. <b>Alarmingly, the asset to liability ratio has melted to 63:100 from 101:100 in 1994. This means for every Rs 10 that the State owes its lenders, it owns assets worth Rs 6. Meaning, the huge borrowings have not translated to assets.</b>
The Stateâs total outstanding public debt stands at Rs 75,619 crore, up by a whopping 500 per cent during the past decade. It was Rs 15,614 in 95-96. It will go up to Rs 1,17,000-crore next year if the Congress government takes loans for the 26 proposed irrigation projects. Against this, the State earns just Rs 35,976 crore â or less than half the current debt. The poor asset-to-liability ratio indicates that most of the borrowings have gone into meeting the revenue deficit.
Economists do not fault the government for going in for loans but they say the money should not be spent on paying salaries or cutting the revenue deficit. Noted economist and DC columnist Jayati Ghosh says the TD government had spent on luxury consumption and unproductive works like building stadia. âDebts per se are not bad. What is important is the way the money is spent. If money is not spent on people it will not yield growth. Problems arise when loans are used on unproductive heads,â she points out.
Planning Commission former member Ch Hanumantha Rao agrees with Ghosh but argues the financial position of Andhra Pradesh is not bad, its debt notwithstanding. âWe are still within the limits. There are many States which are financially worse than Andhra Pradesh. It is a healthy sign that the State has reduced its revenue deficit,â he observes.
<b>According to Rao, the Stateâs economic growth depends on how the government spends the borrowed money. If it spends on irrigation, power and roads the government will be in a position to repay the debts. Money obtained through loans should not be spent on revenue heads like salaries. The government has decided to clear the revenue deficit, which stands at Rs 1,401 crore, by next year. It stood at Rs 1,461 crore last year. </b>
Andhra Pradesh is the only State besides Karnataka to bring lower the revenue deficit. Indeed, Chief Minister YS Rajasekhar Reddy has asked his party legislators and ministers not to seek any project or work that involves revenue expenditure.
âIf we do not curb the revenue deficit, we will become another Uttar Pradesh and Bihar,â he warned them on Tuesday. <b>Tamil Nadu, Andhra Pradesh, Maharashtra and Karnataka have a debt to Net State Domestic Product ratio higher than 30 per cent. It is more than 50 per cent in States like Bihar, Orissa, Punjab, Himachal Pradesh and Sikkim have.</b>
<!--QuoteEnd--><!--QuoteEEnd-->