Mumbai, Mar 07 : A report by the Comptroller and Auditor General of India (CAG) has revealed that the Andhra Pradesh government relied extensively on borrowings from the Reserve Bank of India during the 2024–25 financial year to manage its cash requirements.
According to the report presented in the state Assembly on Friday, the government utilised around ₹1.72 lakh crore through mechanisms such as Special Drawing Facility (SDF), Ways and Means Advances (WMA) and overdrafts, paying about ₹303 crore in interest.
Cash balance maintained briefly
The audit report noted that the state managed to maintain the minimum cash balance with the RBI for only eight days during the financial year without drawing on WMA support.
It further highlighted that the government used the Special Drawing Facility for 71 days, raising ₹42,004 crore and paying ₹188.82 crore as interest. Additionally, ₹73,897 crore was availed through Ways and Means Advances for 179 days, while overdrafts of ₹56,631 crore were taken for 107 days, leading to interest payments of ₹82.30 crore and ₹32 crore respectively.
Fiscal targets exceeded
The report also pointed out that the state’s revenue deficit remained significantly higher than the target set under the Fiscal Responsibility and Budget Management Act. While the limit was fixed at 2.7 percent of Gross State Domestic Product (GSDP), the deficit stood at 3.75 percent in 2024–25.
Similarly, the fiscal deficit reached 5.05 percent, exceeding the prescribed ceiling of 4 percent. As a result, total borrowings climbed to ₹81,071 crore, which the report said could affect long-term fiscal stability and limit resources available for development.
Borrowings and capital expenditure
The audit also noted that only a small portion of borrowed funds was used for capital investments. Out of the total borrowings of ₹87,773 crore during the year, only about ₹21,173 crore roughly 24 percent was allocated for capital expenditure.
Experts say such spending patterns can reduce funds available for productive infrastructure projects and increase the state’s debt burden over time.
Political response
Reacting to the findings, Neelayapalem Vijayakumar, spokesperson of the Telugu Desam Party (TDP), said the current National Democratic Alliance (NDA) government inherited significant financial liabilities from the previous administration led by the YSR Congress Party.
He stated that when the NDA government assumed office on June 10, 2024, the previous regime had already borrowed about ₹38,000 crore, forcing the current administration to take additional loans to manage pending payments to contractors and government employees.
Off budget liabilities flagged
The report also flagged concerns over off-budget borrowings. Although the state informed the Union Finance Ministry that no such liabilities were taken during 2024–25, the audit found outstanding off-budget borrowings amounting to ₹27,241.99 crore as of March 31, 2025.
The findings highlight growing fiscal pressure on the state government and raise questions about debt sustainability and future financial planning.