Andhra Pradesh Government's Loan Availments Total Rs 56,076 Crore

Strategic Insights -

Since coming to power in April 2019, the YSRCP-led government in Andhra Pradesh has obtained significant loans from various public sector banks, with the Union government disclosing a total of Rs 56,076 crore. This large-scale borrowing has raised concerns about the state's financial management and debt burden. The Reserve Bank of India, as the banker to the government, issues new loans to state governments, as per the provisions of the Reserve Bank of India Act, 1934. The Andhra Pradesh government's loan avails have been scrutinized by the Ministry of Finance, with the latter pointing out alleged financial irregularities, including the pledging of future tax revenue for the 2020-21 financial year.

Key Takeaways:

  • The Andhra Pradesh government has availed a total of Rs 56,076 crore in loans from various public sector banks, with the largest loan being Rs 15,047 crore from the State Bank of India.
  • The state government took loans worth Rs 18,500 crore in June 2021, pledging its future tax revenue for the 2020-21 financial year.
  • The Ministry of Finance had pointed out alleged financial irregularities, including the pledging of state assets to banks, which may not be prima facie constitutional.
  • The state already has a debt burden of Rs 3,73,140 crore as of November 2020.
  • The Andhra Pradesh government has availed loans from multiple banks, including Bank of Baroda, Bank of India, Union Bank of India, Punjab National Bank, Indian Bank, Bank of Maharashtra, Central Bank, Indian Overseas Bank, and Punjab and Sind Bank.
  • The Reserve Bank of India issues new loans to state governments, as per the provisions of clause (b) of sub-section (1) of section 21A of the Reserve Bank of India Act, 1934.
  • The issue of financial irregularities was first pointed out by retired former Chief Secretary of Andhra Pradesh, IYR Krishna Rao, and has been raised by YSRCP rebel Member of Parliament Raghu Rama Krishna Raju Kanumuru.

Statistics:

  • Total loan avails by the Andhra Pradesh government: Rs 56,076 crore
  • Largest loan availed: Rs 15,047 crore from the State Bank of India
  • Total debt burden of the Andhra Pradesh government as of November 2020: Rs 3,73,140 crore
  • Loans availed by the Andhra Pradesh government from multiple banks: Bank of Baroda (Rs 9,450 crore), Bank of India (Rs 7,075 crore), Union Bank of India (Rs 6,800 crore), Punjab National Bank (Rs 5,797 crore), Indian Bank (Rs 4,300 crore), Bank of Maharashtra (Rs 2,800 crore), Central Bank (Rs 2,307 crore), Indian Overseas Bank (Rs 1,750 crore), and Punjab and Sind Bank (Rs 750 crore)

Sources:

  • "Loans availed by Andhra Pradesh government from banks since 2019." Answer to a question posed by Member of Parliament Kanakamedala Ravindra Kumar to the Ministry of Finance in the Rajya Sabha on August 10.
  • Reserve Bank of India Act, 1934 (clause (b) of sub-section (1) of section 21A).
  • "Andhra Pradesh government's debt burden crosses Rs 3.5 lakh crore." The Hindu, November 8, 2020.
  • Global Data Point, "Andhra Pradesh government avails Rs 56,076 crore in loans, largest from SBI." August 10, 2021.