Yanamala flags fiscal discipline as key FY 2026-27 Budget challenge

Former Finance Minister Yanamala Ramakrishnudu on Tuesday said the Andhra Pradesh government faces multiple challenges in presenting the Budget for FY 2026-27, with fiscal consolidation and financial discipline emerging as key concerns.

In a press release, he stressed that the revenue deficit must be kept under control and pointed out that the State’s revenue, at 9%, is lower than that of several major States. He said enhancing revenue mobilisation should therefore be the government’s primary objective.

Calling for a sharper focus on “productive expenditure”, Mr. Ramakrishnudu said borrowing would be inevitable to bridge the fiscal deficit.

He further observed that there is a 0.50% gap in total tax revenues between the 2019-24 period and 2025-26 under the coalition government, and said the difference needs to be brought down as part of efforts to strengthen fiscal discipline. Rationalisation of GST rates, he added, could help improve revenues.

Mr. Ramakrishnudu also expressed hope that the 16th Finance Commission would extend greater financial assistance, citing a 1% decline in tax devolution from the Centre to the States following the recommendations of the 15th Finance Commission.

On borrowings, he said raising loans is unavoidable to sustain capital expenditure higher than that during the YS Jagan Mohan Reddy government, which, he alleged, failed to create assets and diverted borrowed funds towards unproductive spending.

He attributed the State’s debt servicing burden to what he termed fiscal profligacy by the YSR Congress Party government, alleging that it raised loans worth thousands of crores at high interest rates.

Stating that the State must maintain a 17.50% GSDP growth rate at current prices to achieve the Vision 2047 target, he said a steady rise in GSDP would support stronger revenue generation.