Evaluate the seriousness of the problems in reorganisation of Andhra Pradesh with reference to the financial position of the State of Andhra Pradesh immediately after reorganisation.
In short
The problems of the 2014 reorganisation were serious, as the loss of Hyderabad, disputed division of assets and liabilities and river water conflicts left residual Andhra Pradesh with a large resource gap and heavy committed spending. Including off-budget borrowings, its real debt burden reached 41.89% of GSDP.
Model answer
Ghissu Editorial · Verified 4 Oct 2026 · 255 words
Loss of Hyderabad Capital
Hyderabad was designated joint capital for only ten years, creating uncertainty and forcing Andhra Pradesh to invest heavily in Amaravati, delaying capital formation and straining financial resources for infrastructure.
High Committed Expenditure and Debt
Over 50% of revenue expenditure was on salaries, pensions, and interest; official liabilities were 32.17% of GSDP, rising to 41.89% including off-budget borrowings, highlighting a precarious debt burden.
Developmental Backlog
Regions like Rayalaseema faced significant developmental deficits, requiring funds beyond the state’s strained capacity, exacerbating regional disparities and social unrest.
Enhance Revenue and Capital Spending
Strengthen tax base and increase capital expenditure via schemes like Swadesh Darshan and Polavaram, essential for infrastructure and economic revival.
Strengthen Governance and Regional Growth
Improve audit mechanisms and develop new capital and industrial corridors like Visakhapatnam-Chennai to promote balanced regional development and attract investments.
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This chapter in the exam
Andhra Pradesh - Bifurcation and its Impact8 questions
Asked in 4 of 8 sittings since 2008
Most tested: Apportionment and unresolved implementation issues under the Andhra Pradesh Reorganisation Act, 2014.
- 2025Examine the impact of the loss of Hyderabad as the capital city on post-bifurcation Andhra Pradesh. How did this transition affect the state's administrative, economic, and socio-cultural landscape?
- 2025Discuss the vision behind building a new capital for Andhra Pradesh after the bifurcation in 2014. Critically assess the financial implications involved in the planning, development, and partial execution of Amaravati as the capital city.
All 8 questions, sorted by sub-topic, with model answers and practice.
Question from the official APPSC Group-I Mains 2017 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.