Though the COVID-19 pandemic has disrupted the economic balance of many states, the plight of the two Telugu states Andhra Pradesh and Telangana are very different when compared to others. They have all kinds of resources, options, and alternatives to generate wealth but somehow they always choose to succumb to debts.
Andhra and Telangana are competing with each other in taking debts and already, the TRS led state took 38% more loans when compared to last year where Jagan’s government took 42% more loans than the previous financial year. According to the bulletin released by the Reserve Bank of India on Monday, Telangana moved from 9th position to 6th position where Andhra Pradesh is at 3rd position at present in the states which has more debts.
The state of Telangana has borrowed a whopping Rs 26,740 crore from the open market and net debt of Rs 22,183 crore in 2018-19. By 2019-20, the gross debt stood at Rs 37,109 crore and net debt at Rs 30,697 crore. As a result, gross debt increased by 38.77% and net debt by 38.38% during the year. From what has been taken so far this year, the gross debt is likely to touch Rs 48,000 crore and the net debt to reach Rs 40,500 crore for the entire financial year.
Coming to Andhra Pradesh, compared to 2018-19, in 2019-20, the gross debt collected by the Andhra Pradesh government from the open market increased by 42.10% and the net debt by 42.47%. During March, April, and May 2020-21, it borrowed an average of Rs 10,000 crore at a rate of Rs 3,333 crore per month. Of this, net debt stood at Rs 8,250 crore, according to Reserve Bank of India.
If we talk about the revenue generation, two states are in a very horrible position as, apart from liquor sales and the regular taxes, no considerable revenue has been generated in the two states. No invitations for investments, no thoughts to raise the GDP, creating no scope to raise employment. With this kind of situation prevailing in these two states, the economic analysts started to wonder about the fate of these two states in the future.