Moneycontrol Be a Pro
Get App
you are here: HomeNewsPolitics
Last Updated : Jun 06, 2019 03:52 PM IST | Source:

Funding electoral promises next big challenge for new Andhra CM Jagan Mohan Reddy

The new government will also have to implement schemes introduced by the previous Chandrababu Naidu administration

YSR Congress President and the newly-minted Chief Minister of Andhra Pradesh will also skip the swearing-in ceremony. Reddy was sworn-in as the Andhra CM at 12:23 PM on May 30.
YSR Congress President and the newly-minted Chief Minister of Andhra Pradesh will also skip the swearing-in ceremony. Reddy was sworn-in as the Andhra CM at 12:23 PM on May 30.

Jagan Mohan Reddy, the newly-minted Chief Minister of Andhra Pradesh, has an uphill task ahead of him.

The elections are over, and Reddy's party, the YSR Congress Party (YSRCP) registered a thumping victory in both the Assembly and the general elections. YSRCP won 151 of the state's 175 Assembly seats, and managed a victory in 23 of the 25 Lok Sabha seats in the state.

However, the victory was not followed by grand celebrations or speeches. The reason, according to a report by Indian Express, is the state's uncertain financial condition. The state was saddled with a revenue deficit of Rs 16,200 crore after its bifurcation in 2014. The party's legislators and members of Parliament (MPs) are now worried about the funding for welfare schemes promised during election campaigning.


"The strong mandate implies that people have huge expectations, and trust Jagan to fulfil all his promises. If people can give such a crushing defeat to Babu (N Chandrababu Naidu) for failing to fulfil his promises, they can do the same to YSRCP if it doesn't deliver," a party leader told the newspaper.

"The state’s weak fiscal position presents a huge challenge in implementing the schemes. This is a major worry," the leader added.

The report, quoting government officials and party leaders, states that Andhra Pradesh would need around Rs 50,000 crore to fund the nine promises, or the Navratnalu, that Jagan Mohan made during the elections.

These promises include providing loan waiver for all women from cooperative societies, student fee reimbursement of up to Rs 1.5 lakh per year, Rs 15,000 per month for mothers who send children to school and free borewells and interest-free loans to eligible farmers, among others.

Also Read | The challenges ahead for Chief Minister Jaganmohan Reddy

Stating that the new government will have to find new avenues to boost revenue, YSRCP leader Botsa Satyanarayana said bringing down the total debt to borrowing limits again is another challenge. "We may have to seek loans from the World Bank and other institutions to fund schemes," Satyanarayana said.

The new government will also have to implement the schemes introduced by the previous government and fund the Polavaram project, not to mention the construction of the new capital city of Amaravati and the Metro rail projects in Vijayawada and Visakhapatnam.

Some of the welfare schemes started by the previous government, however, will be stopped. For instance, on June 6, Reddy cancelled the 'Annadata Sukhibhava Scheme' launched by the Naidu government in February 2019. Under this scheme, the state government assured to provide Rs 10,000 to farmers.

The report states that the Bharatiya Janata Party (BJP) government at the Centre had delayed payments to Andhra Pradesh after 2016 due to the straining of ties between Naidu and the BJP-led National Democratic Alliance (NDA). Naidu eventually left the alliance in 2018.

Reddy probably had that on his mind when he rushed to meet Prime Minister Narendra Modi after the victory. The CM had reportedly asked PM Modi for financial help and pressed for a Special Category Status (SCS) for Andhra. Meanwhile, Reddy has also asked IAS officers in the state to think of new ideas to increase state revenue.

"The CM has also asked officials to prepare a comprehensive report on AP's finances to be submitted to the 15th Finance Commission, and make a case for additional central grants and special category status," an official told the newspaper.

Get access to India's fastest growing financial subscriptions service Moneycontrol Pro for as little as Rs 599 for first year. Use the code "GETPRO". Moneycontrol Pro offers you all the information you need for wealth creation including actionable investment ideas, independent research and insights & analysis For more information, check out the Moneycontrol website or mobile app.
First Published on Jun 6, 2019 03:52 pm
Follow us on
Available On
Trusted By 1cr Families
Medlife Health Comes Home