Restructuring State Finances in Andhra Pradesh

The focus of reforms has shifted from the centre to the states in their second stage. Andhra Pradesh is one of the leading States of the country. The policy-makres of the State are engaged in the formulation of vision-2020. The elimination of the projected deficits in regard to infrastructure. industries and services sectors will require finances of a huge order. A study of the finances of Andhra Pradesh reveals that they are in great disarray. The continuing revenue and fiscal deficits have resulted in halting the economic march of the State. The performance on the revenue-rasing front has been very tardy, both due to lack of effective tax administration and absence of innovotiveness in Ieving new taxes. The buoyancy coefficients of the State's own revenue has turned out to he lower as compared to the other major states of the country. The public expenditure management is not in a healthy shape. The incidence of budgetary subsidies has been rising year after year. The losses incurred by the SLPEs have been on the increase. The expenses on salaries and pensions have recorded an exorbitant growth. The paper discusses, among other things. various strategies to effect stlch a revamp. paying the way for a sound fiscal management in Andhra Pradesh.