Andhra fiscal condition likely to get worse

HYDERABAD: The fiscal condition of the state government remains very precarious. It is likely to get worse as the officials were finding it difficult to augment revenue receipts and allocate funds to different departments with no clear instructions from their political bosses who are preoccupied with the political activity in the state.The revenue collections for the first quarter (April-June) of the financial year fell by 15 per cent, about Rs 2,200 crore lesser than the target of Rs 14,110 crore revenue collections. As per the budget estimates for the year 2011-12, the revenue is expected to be Rs 56,438 crore. The government set a revenue collection target of about Rs 14,110 crore for the first quarter. But the officials succeeded in augmenting revenue receipts amounting to about Rs 11,900 crore.Of this, about Rs 7,500 crore went towards payment of salaries and pensions to the government employees for the months of April, May and June. The remaining amount of about Rs 4,400 crore was used towards clearing part of arrears from the previous financial year and also to meet emergency requirements. Making things worse, the receipts from the Central taxes share were also not encouraging.Official sources said that a resource mobilisation meeting which was to be chaired by the chief minister during May to review the financial position of the state, is yet to take place. It is learnt that the meeting is being postponed as chief minister N Kiran Kumar Reddy and his ministerial colleagues were preoccupied with other works. “If  there is more dealy in holding resource mobilisation meeting, the financial condition of the state could get worse. Without clear instructions from the chief minister, it would be difficult to improve the revenue receipts over the next quarter,” said an official in the finance department.In case the tax collections do not improve during the next three months, the financial crisis is likely to deepen further affecting overall tax collections during the current financial year. In addition to this, the state government has to clear arrears amounting to more than Rs 20,000 crore from the previous years including abut Rs 12,000 crore towards power subsidies, Rs 1,400 crore towards fee reimbursement and scholarships and also another Rs 1,300 crore towards pending bills for irrigation projects.