A Clear Case Of Mal-Governance

YSRCP MLA and PAC chairman Buggana Rajendranath Reddy spoke on AP GSDP figures and facts and of TDP's misdeeds. Here are details from the press note released in this regard.

Press Release


  • The visionary Chief Minister of Andhra Pradesh, a post-graduate and PhD in economics from Sri Venkateswara University, is at it again.
  • On 28 th September 2016, addressing the district Collectors as part of two-day Collectors’ conference, Mr Naidu proudly declared that AP recorded a GSDP growth rate of 12.26% against nation’s 7.31% for the first quarter of the current fiscal 2016-17. This is apparently on top of 10.99% growth rate achieved by the state for the previous year 2015-16, against nation’s 7.57%.
  • So, last year, AP’s GSDP growth rate was 3.42% more than that of the nation’s while during the first quarter of the current year the same has widened further to 4.91%!! What a remarkable performance!! Not many states including Gujarat, Tamilnadu, Maharashtra and Karnataka are anywhere near this performance.
  • Why do countries and states clamour for higher GDP growth rate? It is simply because higher GDP growth inevitably leads to higher revenue growth. Higher revenues in the hands of liberal democracies mean higher welfare and development.
  • When Mr Naidu said that Special Category Status (SCS) is infructuous, many people thought that he would have said so as higher GSDP growth rates of AP would anyway lead to higher revenue growth rates; so, there is no need for SCS for revenue mop-up.
  • When it comes to other benefits, SCS states enjoy the tax exemptions for attracting investments. Even that appeared to have become irrelevant because even without that status and without even the so called tax incentives given to AP under Section 94 of the AP Reorganisation Act 2014 becoming operational, Mr Naidu could, purely based on his personal image, secure Rs 4.25 lakh crore investments.
  • But, where is the revenue growth commensurate with GSDP growth rate for AP and what is happening to those investments?
  • The nation’s indirect tax revenue growth rate for 2015-16 over 2014-15 was as high as 29.86% for its GDP growth rate of 7.57%. When it comes to AP, where all the state’s taxes are indirect taxes, for its GSDP growth rate of 10.99%, the revenue growth ought to have been at least 30%, if not considerably more, given our experienced and visionary Chief Minister. But, it is not even 15%!
  • Similarly, for the five months period April-September 2016, the nation achieved indirect tax revenue growth rate of 25.9% for its GDP growth rate of 7.31%. For AP with its unprecedented GSDP growth rate of 12.26%, the state’s own revenues should have grown at least at 25.9%. But, as per the data provided in AP CM’s Core Dashboard, the state’s own revenue growth rate is around 5 % for the 6months period April-September2016 over that of the corresponding period of the previous year.
  • An economic miracle seems to be happening in AP under our economist CM. It is a miracle of sorts, which even Nobel Laureates in Economics cannot comprehend. All over the world, revenues bear direct proportionality to GSDP growth rate. Higher the GSDP growth rate, higher is the revenue growth rate. That is the normal economic phenomenon. Here, in AP, exactly opposite of this is happening. Can there be any state in the world where GSDP growth rate and revenue growth rate bear inverse proportionality?
  • Because AP has a CM with PhD in Economics, our revenue growth rate is falling as the GSDP growth rate is increasing. How ludicrous!
  • Is it not crystal clear that the AP Government is fudging the GSDP figures? Their confidence is that it takes at least two years before the audit figures from Central Statistical Organisation come out. Therefore, make hay while the Sun shines. Even a novice understands this. We have raised this issue in the budget session this year. There was no answer from the Government. They have clearly fudged the GSDP growth rate figures for 2015-16 and for Q1 of the current fiscal. In our opinion and as per our calculation, the GSDP growth rate for both the years for AP cannot be more than 6-7%.
  • The question is why is the State Government doing all this? Are we not, in the process, sending wrong signals to Central Government, which, based on these figures, has every reason to believe that the State is indeed doing very well and that therefore does not need any hand holding despite the problems of unjust division of the state?
  • Is it not for this reason that the Central Government has neither given us the Special Category Status nor the Special Package? The Union Finance Ministry’s note dated 8 th September 2016 only elucidated Central Assistance extended to AP under the AP Reorganisation Act 2014. There was no mention of Special Package in Mr Arun Jaitley’s note.
  • The state is in dire straits with no semblance of governance, let alone good governance. Except hype and propaganda, nothing seems to be happening in the state. The Chief Minister has become a solo player as he has no faith in delegation.
  • The result is the state’s own revenues are growing at around 5% during the first half of the current fiscal against 13% in the previous year. This cannot be attributed to division of the state. It is a clear case of mal-governance. At this rate, no development can take place. The State will get into irretrievable debt trap. There is no mention about slowing down of revenues during the current fiscal in the Collectors Conference.

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