Examine some of the major features of Andhra Pradesh budget for the FY 2020-21 with special reference to fiscal deficit situation of the state.
In short
Andhra Pradesh's 2020-21 budget prioritised Navaratnalu welfare schemes such as YSR Pension Kanuka and Amma Vodi alongside Polavaram, but low capital spending and high committed expenditure left it in fiscal stress. Its fiscal deficit exceeded 4% of GSDP, above FRBM targets, while public debt grew at over 16% a year.
Model answer
Ghissu Editorial · Verified 4 Oct 2026 · 251 words
Social Welfare and Infrastructure
The budget emphasized schemes like the YSR Pension Kanuka and the Polavaram project, but capital expenditure was low, limiting asset creation.
Revenue and Expenditure Composition
High committed expenditure on salaries, pensions, and interest payments contributed to persistent revenue deficits, restricting fiscal space.
Elevated Deficit Levels
Fiscal deficit exceeded 4% of GSDP, violating FRBM targets, with revenue deficit persisting and capital expenditure falling to 0.55% of GSDP by 2022-23.
Rising Debt Burden
Public debt grew at over 16% CAGR, with interest payments consuming a growing share of revenue receipts, raising sustainability concerns.
Constrained Development Spending
High deficits limited capital outlay on critical projects like the Polavaram project and welfare schemes such as YSR Rythu Bharosa.
Debt Sustainability Risks
Increasing off-budget borrowings and debt levels threaten creditworthiness and fiscal flexibility.
Improve Capital Expenditure Efficiency
Focus on timely execution of infrastructure projects linked to industrial corridors.
Diversify Revenue Sources
Leverage sectors like aquaculture and IT in Visakhapatnam to broaden the tax base.
Rationalize Committed Expenditure
Control salary and pension liabilities to free resources for development.
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
Government budgeting in Andhra Pradesh6 questions
Asked in 5 of 8 sittings since 2008
Most tested: Fiscal deficit, revenue deficit, and debt position of Andhra Pradesh after bifurcation.
- 2025Discuss the role of the State Finance Commission in Andhra Pradesh and analyse its significance in strengthening local finances and promoting fiscal decentralisation within the state.
- 2023Explain the importance of budgetary policy in reallocation of resources. Briefly discuss the allocation of budgetary resources in the social services sector with respect to the AP Budget (2023 – 24).
All 6 questions, sorted by sub-topic, with model answers and practice.
Question from the official APPSC Group-I Mains 2020 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.