NITI Aayog's Report Reveals Andhra Pradesh's Struggle: A Call for Urgent Fiscal Reforms

Following a period of notable economic growth between 2014 and 2019 under Chief Minister Chandrababu Naidu, Andhra Pradesh faced a sharp decline in its financial health over the last five years. This downturn was attributed to the governance of YS Jagan Mohan Reddy, during which the state's economy was significantly affected by what has been described as anti-industry policies, increased borrowing, and a general lack of fiscal prudence. These factors collectively led to Andhra Pradesh reaching a nadir in its economic performance by the time Reddy vacated his position.

The Central Government's policy think tank, NITI Aayog, has unveiled these findings in its latest report. This report assesses the fiscal health of Indian states, including Andhra Pradesh, across several critical financial indicators. In the fiscal health index for the year 2022-2023, Andhra Pradesh was found to be among the lowest-ranking states, with a score of 20.9, positioning it at 17th place out of 18 states evaluated. This index considered a variety of factors such as GDP contribution, demographic details, public expenditure, revenue generation, and overall fiscal stability of the states.

The NITI Aayog's report paints a grim picture of Andhra Pradesh's financial condition, particularly highlighting its poor performance in terms of debt sustainability and revenue mobilization. The state received zero points in debt sustainability and a very low debt index score, indicating a precarious financial situation. Moreover, on parameters like revenue mobilization and fiscal prudence, Andhra Pradesh scored 22.1 and 13.3 respectively, further underscoring the challenges faced by the state in these areas.

Notably, Andhra Pradesh's quality of expenditure was also critiqued in the report, with the state lagging behind its counterparts. These findings raise significant concerns about the state's debt profile and overall economic health. Upon taking office, Chandrababu Naidu had released a white paper on the state's finances, accusing Jagan Mohan Reddy of pushing Andhra Pradesh into a debt trap. The revelations from the NITI Aayog report lend credence to these allegations, spotlighting the economic deterioration over the last five years.

Amidst this, it's important to note that while Andhra Pradesh grappled with these financial issues, other states showed varying levels of fiscal health. For instance, Odisha and Chhattisgarh were at the top of the financial health index table, whereas Punjab found itself at the bottom, just below Andhra Pradesh. This comparative analysis underscores the divergent fiscal paths followed by different states within the country.

In conclusion, the NITI Aayog's report has brought to light the severe financial challenges faced by Andhra Pradesh in recent years, highlighting the impact of governance and policy decisions on the state's economy. The findings underscore the need for strategic fiscal management and policy reforms to revive Andhra Pradesh's economic fortunes and ensure sustainable growth.