Explain 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).
In short
Budgetary policy reallocates resources to priority sectors and lagging regions, and in the AP Budget 2023-24 social services were protected but squeezed by a high revenue deficit and outstanding liabilities. Health got only 3.11% of the budget against an 8% target, and CAG audits reported welfare fund diversion.
Model answer
Ghissu Editorial · Verified 4 Oct 2026 · 276 words
Reducing Inequities
Targeted allocations address regional disparities, vital for Andhra Pradesh’s coastal and drought-prone Rayalaseema regions.
Fiscal Discipline Issues
The Andhra Pradesh 2022-23 CAG report revealed a quadrupled revenue deficit and plummeting capital expenditure, indicating resource allocation inefficiencies.
Adaptive Budgeting
Shifts towards direct benefit transfers in social schemes show responsiveness to emerging needs.
Social Sector Priority
Health, education, and social protection are key for inclusive growth; however, national social sector spending3 remains stagnant.
Quality Concerns
The CAG 20244 report highlights 22% vacancy in specialist health posts and inadequate community health centres in Andhra Pradesh.
AP Budget Trends
The CAG found health received only 3.11% of the state budget against an 8% target5; AP CAG audit reported welfare fund diversion and scheme lapses.
Fiscal Constraints
The state’s 3.8% GSDP fiscal deficit target limits social sector expansion, creating tension between fiscal prudence and social spending.
Fiscal Constraints
High revenue deficit and liabilities constrained social sector spending increases.
Welfare Focus
Despite challenges, allocations for key social schemes and rural infrastructure were maintained.
Implementation Gaps
CAG reports reveal fund diversion and health personnel vacancies limiting budget impact.
Outcome Orientation Needed
Medium-term frameworks stress developmental goals, but monitoring and transparency need improvement.
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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.
- 2020Briefly give an account of revenue and fiscal deficits and the debt positions of Andhra Pradesh for the last five years (since 2014-15).
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Question from the official APPSC Group-I Mains 2023 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.