A precipitous slide in revenues combined with the burden of the costs associated with the COVID-19 pandemic have left Andhra Pradesh facing a ‘grave financial crisis’. Add to it the distress in industry, exacerbated by the mass migration of workers, and the State government finds itself with little option but to look at the Centre for liberal financial help, a stimulus package and statutory measures to help the industry.
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Chief Minister Y.S. Jagan Mohan Reddy had apprised Prime Minister Narendra Modi of the dire situation in the State, during a videoconference in April, and made a pitch for liberal financial aid. The State’s revenue had reportedly dipped to a mere ₹2 crore a day. “We could not pay full salaries for the month of March to our staff due to the grave financial crisis,” Mr. Reddy said during his interaction with the PM.
The revenue shortfall in A.P. in the wake of the lockdown was about ₹5,000 crore a month, informed Finance Minister Buggana Rajendranath Reddy. The slump in receipts include deep deficits in excise collections, sales tax, motor vehicles tax and revenue from stamp duty and registration. And the deficit is expected to continue in the month of May too, according to the minister.
While the actual calculations of the State’s finances and revenue deficit are yet to be confirmed, sources in the government said revenue receipts in the financial y