In the context of the financial situation of Andhra Pradesh after reorganization, discuss the nature and extent of Central assistance provided to Andhra Pradesh.
In short
After the 2014 reorganisation, central assistance to Andhra Pradesh has been broad in nature, covering capital formation, the Polavaram project and industrial corridors, but uneven in extent and timing. Only ₹3,685 crore was released under SASCI in 2024-25, while capital expenditure fell to 0.55% of GSDP.
Model answer
Ghissu Editorial · Verified 4 Oct 2026 · 270 words
Legal Mandate and Funding
The Act legally obliges the Centre to provide grants and loans, including ₹15,000 crore via multilateral agencies, for capital projects and new capital infrastructure.
Project-Specific Assistance
Central funds support flagship projects like the Polavaram Irrigation Project and infrastructure in industrial corridors at Kopparthy and Orvakal, fostering economic growth.
Delayed Fund Releases and Deficits
Only ₹3,685 crore was released under the capital investment scheme in 2024-25; revenue deficit quadrupled while capital expenditure dropped to 0.55% of GSDP, reflecting fiscal stress.
Governance Issues
Andhra Pradesh CAG audits reveal diversion of welfare4 funds and scheme lapses, weakening the impact of Central assistance.
Growth Supported by Assistance
The state’s 9.24% GSDP growth in 2024-25 exceeds the national average, aided by Central schemes like PM-KISAN (topped up by the state's Annadatta Sukhibhava) and Samagra Shiksha.
Sectoral Development and Constraints
Capital expenditure constraints limit long-term growth; demand for Special Category Status continues to seek enhanced Central aid.
Improve Fund Utilisation and Governance
Strengthen administrative capacity and audit mechanisms to ensure timely and transparent use of Central funds.
Enhance Fiscal Discipline
Diversify revenue and rationalise expenditures to reduce dependence on Central transfers.
This model answer is indicative and the model can make mistakes; please verify key facts independently.
Practise this question
1Get the answer sheet
Sized for this question.
2Write your answer
Timed, by hand.
3Get it marked
Your score and what to fix.
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.
All 20 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.