Write notes on : (i) Debt composition of Andhra Pradesh government (ii) Tax revenue and other resource inflows into Andhra Pradesh government from the Central government.
In short
Andhra Pradesh carries heavy debt, including large off-budget borrowings, while central inflows come through Finance Commission tax devolution, revenue-deficit grants and special assistance for projects like Polavaram. As of 31 March 2023, outstanding liabilities stood at ₹5,79,621 crore (43.99% of GSDP), with off-budget borrowings of ₹1,28,048 crore.
Model answer
Ghissu Editorial · Verified 4 Oct 2026 · 262 words
High Outstanding Liabilities
By March 2023, Andhra Pradesh’s total liabilities reached ₹5,79,621 crore (43.99% of GSDP), with off-budget borrowings at ₹1,28,048 crore (9.72% of GSDP), raising concerns over fiscal discipline.
Revenue Deficit Quadruples
The revenue deficit surged to 3.30% of GSDP, increasing borrowing for consumption rather than capital investment, constraining growth.
Central Tax Devolution and Own Revenue Growth
Central tax devolution remains a key revenue source; own tax revenue grew at 6% CAGR (2018-23), with own tax share rising from 64% to 67%.
Audit Findings on Revenue Losses
The 2023 CAG audit reported ₹2,772 crore in outstanding revenue observations; the 2021-22 audit revealed ₹1,806 crore revenue impact from tax and land departments, indicating tax compliance challenges.
Central Grants and Capital Incentives
Andhra Pradesh receives revenue-deficit grants and special assistance for projects like Polavaram; however, capital expenditure remains low at 3.45% of total expenditure versus the 13.48% states’ average.
Challenges in Fund Utilization
Low capital expenditure and audit observations reflect inefficiencies in utilizing central funds effectively.
Improve Debt Transparency and Tax Administration
Strengthening monitoring of off-budget borrowings and addressing audit issues can enhance fiscal health.
Boost Capital Spending
Leveraging central incentives and improving project execution is essential for sustainable growth.
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This chapter in the exam
Resource mobilization in Andhra Pradesh20 questions
Asked in 8 of 8 sittings since 2008
Most tested: Andhra Pradesh’s revenue sources, central transfers, and resource allocation/resource gap after bifurcation.
- 2025Explain the major sources of budgetary resources for Andhra Pradesh. What are the key challenges the state faces in mobilising adequate financial resources?
- 2023Briefly discuss the impact of bifurcation on the economy of Andhra Pradesh with respect to sectoral changes and resource gap. Provide a brief note on the steps taken by the Government of Andhra Pradesh to mobilize resources.
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Question from the official APPSC Group-I Mains 2008 paper. Answer written by Ghissu's engine and checked against our editorial standards. Found an error? Tell us and we correct it within 48 hours.