Andhra Pradesh Budget Analysis

2021-22
The Finance Minister of Andhra Pradesh, Mr. Bugganna Rajendranath, presented the Budget for the state for the
financial year 2021-22 on May 20, 2021. Note that due to the impact of COVID-19, 2020-21 was not a standard
year with respect to the performance of the economy and government finances. In this note, 2021-22 budget
estimates have been compared to the actuals for 2019-20 (in terms of compounded annual growth rate or CAGR).
Annexure to this note provides a comparison of the revised estimates for 2020-21 and budget estimates for 2021-22.
Budget Highlights
▪ The Gross State Domestic Product (GSDP) of Andhra Pradesh for 2021-22 (at current prices) is projected
to be Rs 10,61,781 crore. This is an annual increase of 4% over the actual GSDP of 2019-20. The GSDP
for 2021-22 is estimated to be 5.1% higher than the revised estimate of GSDP for 2020-21 (Rs 10,19,146
crore). In 2020-21, the GSDP of Andhra Pradesh is estimated to grow by 4% over the previous year. In
comparison, the GDP of India at current prices is estimated to contract by 3.8% in 2020-21 and grow by
14.4% in 2021-22.
▪ Total expenditure for 2021-22 is estimated to be Rs 2,29,779 crore, an annual increase of 15% over the
actual expenditure in 2019-20.
▪ Total receipts (excluding borrowings) for 2021-22 are estimated to be Rs 1,77,247 crore, an annual
increase of 24% over 2019-20. In 2020-21, total receipts (excluding borrowings) are estimated to fall short
of the budget estimate by Rs 43,433 crore (a shortfall of 27%).
▪ Revenue deficit for 2021-22 is estimated to be Rs 5,000 crore, which is 0.47% of the GSDP. In 2020-21, as
per the revised estimate, revenue deficit is estimated at Rs 34,927 crore (3.46% of GSDP) as compared to a
revenue deficit of Rs 18,434 crore (1.82% of GSDP) estimated at the budget stage.
▪ Fiscal deficit for 2021-22 is targeted at Rs 37,030 crore (3.49% of GSDP). In 2020-21, fiscal deficit is
expected to be 5.38% of GSDP as per the revised estimate, higher than the budget estimate of 4.78% of GSDP.
Policy Highlights
▪ Dairy Development: Under the GoAP-AMUL project, women farmers will be organised in 9,899 Mahila
Dairy Sahakara Sanghalu. These groups will be provided with infrastructural and operational support to
ensure remunerative price and economic development.
▪ Budgets for women, child, and minorities: The state government presented special statements on gender
budget and child budget under the 2021-22 budget. It has also introduced a minority action plan under the
budget which will encapsulate budget provisions for minorities.

Andhra Pradesh’s Economy

Figure 1: Growth in GSDP and sectors in Andhra
▪ GSDP: In 2020-21, Andhra Pradesh’s GSDP (at Pradesh at constant prices (2011-12)
constant prices) is estimated to contract by 2.6% 20%
18.2%

10.2%

10.1%

over the previous year. In 2019-20, GSDP is 15%

8.2%
8.0%
7.9%

7.2%

estimated to grow by 7.2%.

6.2%
5.8%

10%
4.9%
4.2%
3.6%

▪ In 2019-20, per capita GSDP of Andhra Pradesh

5%
was Rs 1,29,516 (at constant prices).
0%
▪ Sectors: In 2020-21, agriculture, manufacturing,
-0.2%

-5%
-2.6%

and services sectors contributed to 33%, 26%, and

-3.3%

-10%
-6.7%

41% of the economy. In 2020-21, manufacturing

and services sectors registered negative growth.
▪ Unemployment: According to the Periodic
Labour Force Survey 2018-19 (July 2018-June
2019), Andhra Pradesh has an unemployment rate 2017-18 2018-19 2019-20 2020-21
of 5.3%, which is lower than the unemployment Note: These numbers are as per constant prices (2011-12) which
rate of 5.8% at the national level. implies that the growth rate is adjusted for inflation.
Sources: MOSPI; Andhra Pradesh Budget Documents 2021-22.

Manish Kanadje
[email protected] May 25, 2021
PRS Legislative Research ◼ Institute for Policy Research Studies
3rd Floor, Gandharva Mahavidyalaya ◼ 212, Deen Dayal Upadhyaya Marg ◼ New Delhi – 110002
Tel: (011) 4343 4035, 2323 4801 ◼ www.prsindia.org
 Andhra Pradesh Budget Analysis 2021-22 PRS Legislative Research

Budget Estimates for 2021-22

▪ Total expenditure in 2021-22 is targeted at Rs 2,29,779 crore. This is an annual increase of 15% over the
actual expenditure in 2019-20. This expenditure is proposed to be met through receipts (other than
borrowings) of Rs 1,77,247 crore and borrowings of Rs 50,525 crore. Total receipts in 2021-22 (other
than borrowings) are expected to register an annual increase of 24% over the actual receipts in 2019-20.
▪ As per the revised estimates for 2020-21, total expenditure is estimated to be 17% lower than the budget
estimates. In 2020-21, receipts (other than borrowings) are estimated to be 27% lower than budgeted.
▪ The state expects a revenue deficit of Rs 5,000 crore in 2021-22 (0.47% of GSDP). In 2020-21, revenue
deficit is estimated to be Rs 34,927 crore at the revised stage, as compared to the revenue deficit of Rs
18,434 crore estimated at the budget stage. Fiscal deficit for 2021-22 is estimated to be Rs 37,030 crore
(3.49% of GSDP). In 2020-21, as per the revised estimates, fiscal deficit is estimated to increase to 5.38%
of GSDP as compared to 4.78% of GSDP estimated at the budget stage.
Table 1: Budget 2021-22 - Key figures (in Rs crore)
% change from Annualised
2019-20 2020-21 2020-21 2021-22
Items BE 2020-21 to Change (2019-20
Actuals Budgeted Revised Budgeted
RE 2020-21 to 2021-22 BE)
Total Expenditure 1,73,701 2,24,789 1,85,468 -17% 2,29,779 15%
A. Receipts (except borrowings) 1,15,389 1,62,558 1,19,126 -27% 1,77,247 24%
B. Borrowings 51,687 60,258 57,805 -4% 50,525 -1%
Total Receipts (A+B) 1,67,077 2,22,816 1,76,930 -21% 2,27,772 17%
Revenue Deficit 26,441 18,434 34,927 89% 5,000 -57%
As % of GSDP 2.72% 1.82% 3.46% 0.47%
Fiscal Deficit 39,684 48,296 54,369 13% 37,030 -3%
As % of GSDP 4.08% 4.78% 5.38% 3.49%
Primary Deficit 22,031 27,912 32,343 16% 14,290 -19%
As % of GSDP 2.26% 2.76% 3.20% 1.35%
Note: BE is Budget Estimates; RE is Revised Estimates.
Sources: Andhra Pradesh Budget Documents 2021-22; PRS.

Expenditure in 2021-22
▪ Capital expenditure for 2021-22 is proposed to be Rs
47,583 crore, which is an annual increase of 15% over the Capital Outlay
actual capital expenditure in 2019-20. Capital expenditure Andhra Pradesh’s capital outlay for 2021-22 is
includes expenditure affecting the assets and liabilities of the estimated to be Rs 31,198 crore, which is an annual
state, such as: (i) capital outlay, i.e., expenditure which leads increase of 60% over 2019-20. The revised estimate
to the creation of assets (such as bridges and hospitals), and for capital outlay in 2020-21 is Rs 18,797 crore which is
(ii) repayment and grant of loans by the state government. 37% lower than the budget estimate. This includes a
reduction of Rs 6,786 crore in the allocation towards
▪ Revenue expenditure for 2021-22 is proposed to be Rs irrigation and flood control, and a reduction of Rs 1,962
1,82,197 crore, which is an annual increase of 15% over crore towards transport. This accounts for 79% of the
2019-20. This expenditure includes the payment of salaries, total reduction in capital outlay in 2020-21.
pensions, interest, and subsidies. In 2020-21, as per the
revised estimates, revenue expenditure is estimated to be 15% lower than the budget estimates.
Table 2: Expenditure budget 2021-22 (in Rs crore)
2019-20 2020-21 2020-21 % change from BE 2021-22 Annualised Change
Items
Actuals Budgeted Revised 2020-21 to RE 2020-21 Budgeted (2019-20 to 2021-22 BE)
Capital Expenditure 36,226 44,397 32,478 -27% 47,583 15%
of which Capital Outlay 12,242 29,908 18,797 -37% 31,198 60%
Revenue Expenditure 1,37,475 1,80,393 1,52,990 -15% 1,82,197 15%
Total Expenditure 1,73,701 2,24,789 1,85,468 -17% 2,29,779 15%
A. Debt Repayment 18,625 13,935 11,973 -14% 15,503 -9%
B. Interest Payments 17,653 20,383 22,026 8% 22,740 13%
Debt Servicing (A+B) 36,278 34,318 33,999 -0.9% 38,243 3%
Note: BE is Budget Estimates; RE is Revised Estimates.
Sources: Andhra Pradesh Budget Documents 2021-22; PRS.

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Sectoral expenditure in 2021-22

The sectors listed below account for 67% of the total expenditure on sectors by the state in 2021-22. A
comparison of Andhra Pradesh’s expenditure on the key sectors with other states can be found in Annexure 1.
Table 3: Sector-wise expenditure under Andhra Pradesh Budget 2021-22 (in Rs crore)
Annualised
2019-20 2020-21 2020-21 2021-22 Change
Sector Budget provisions 2021-22
Actuals BE RE BE (2019-20 to
2021-22 BE)
Welfare of SC, ST, ▪ Rs 17,000 crore has been allocated towards the
21,764 41,430 23,414 27,870 13%
OBC, and Minorities YSR Pension Kanuka scheme.
▪ Rs 7,412 crore has been allocated towards teaching
grants to Mandal Praja Parishads.
▪ Rs 3,500 crore has been allocated towards the
Education, Sports,
26,643 25,517 24,268 27,212 1% Nadu-Nedu scheme to create infrastructure facilities
Arts, and Culture
for schools.
▪ Rs 2,031 crore has been allocated towards
Samagra Shiksha Abhiyan.
▪ Rs 4,263 crore has been allocated towards
MGNREGS.
Rural Development 8,327 13,544 14,252 14,943 34% ▪ Rs 865 crore has been allocated towards providing
interest-free loans to women under the Vaddileni
Runalu scheme.
▪ Rs 3,202 crore has been allocated towards the
National Health Mission.
Health and Family ▪ Rs 1,559 crore has been allocated towards the YSR
7,538 11,673 9,570 14,088 37%
Welfare Arogyasri Health Care Trust.
▪ Rs 500 crore has been allocated towards the
COVID-19 vaccination.
▪ Rs 3,845 crore has been allocated towards the YSR
Agriculture and allied Rythu Bharosa scheme.
6,904 13,563 10,525 13,299 39%
activities ▪ Rs 1,803 crore has been allocated towards the
YSR-PM Fasal Bima Yojana.
▪ Rs 4,802 crore has been allocated towards the
Polavaram irrigation project.
Irrigation and Flood
4,931 11,358 4,518 12,691 60% ▪ Rs 1,736 crore and Rs 1,043 crore has been
Control
allocated towards irrigation projects in Ongole and
Anantapur, respectively.
▪ Rs 1,556 crore has been allocated towards the YSR
Social Welfare and Sampoorna Poshana scheme.
6,382 10,795 7,202 11,384 34%
Nutrition ▪ Rs 1,396 crore has been allocated towards the
Integrated Child Development Service.
▪ Rs 1,000 crore has been allocated towards the
Smart Cities scheme.
▪ Rs 531 crore has been allocated towards Andhra
Urban Development 4,569 7,014 4,637 8,330 35%
Pradesh Capital Region Development Authority.
▪ Rs 500 crore has been allocated towards creating
essential infrastructure for the new capital city.
▪ Rs 3,007 crore has been allocated to the Road
Transport Department.
Transport 2,104 6,250 4,968 7,458 88%
▪ Rs 2,271 crore has been allocated towards capital
outlay on roads and bridges.
▪ Rs 3,561 crore has been allocated towards district
police forces.
Police 5,658 5,299 5,932 6,398 6%
▪ Rs 236 crore has been allocated towards the
intelligence branch.
% of total
expenditure on all 63% 70% 64% 67%
sectors
Sources: Andhra Pradesh Budget Documents 2021-22; PRS.

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Receipts in 2021-22
▪ Total revenue receipts for 2021-22 are estimated to be Rs 1,77,196 crore, an annual increase of 26% over
2019-20. Of this, Rs 92,315 crore (52%) will be raised by the state through its own resources, and Rs
84,881 crore (48%) will come from the centre. Resources from the centre will be in the form of the state’s
share in central taxes (15% of revenue receipts) and grants (33% of revenue receipts).
▪ Devolution: In 2021-22, receipts from the state’s share in central taxes (devolution) are estimated to
register an annual decrease of 2% over actual devolution in 2019-20. As per the revised estimates,
devolution to Andhra Pradesh in 2020-21 is estimated to be 24% lower than the budget estimate. This may
be due to a 30% cut in the union budget for devolution to states, from Rs 7,84,181 crore at the budgeted
stage to Rs 5,49,959 crore at the revised stage.
▪ State’s own tax revenue: Total own tax revenue of the state in 2021-22 is estimated to be Rs 85,265 crore,
an annual increase of 22% over 2019-20. In 2020-21, as per the revised estimates, state’s own tax revenue
is estimated to be 19% lower than the budget estimates. In 2021-22, the state’s own tax to GSDP ratio is
targeted at 8% which is notably higher than the revised estimate of 5.7% in 2020-21. This implies that
growth in the state’s own tax is estimated to be higher than the economic growth.
Table 4: Break up of state government receipts (in Rs crore)
% change from Annualised
2019-20 2020-21 2020-21 2021-22
Items BE 2020-21 to Change (2019-20
Actuals BE RE BE
RE 2020-21 to 2021-22 BE)
State's Own Tax 57,601 70,653 57,359 -19% 85,265 22%
State's Own Non-Tax 3,315 5,866 3,310 -44% 7,050 46%
Share in Central Taxes 28,242 32,264 24,461 -24% 26,951 -2%
Grants-in-aid from Centre 21,876 53,175 32,934 -38% 57,931 63%
Total Revenue Receipts 1,11,034 1,61,958 1,18,063 -27% 1,77,196 26%
Borrowings 51,687 60,258 57,805 -4% 50,525 -1%
Other receipts 4,355 600 1,062 77% 50 -89%
Total Capital Receipts 56,043 60,858 58,867 -3% 50,576 -5%
Total Receipts 1,67,077 2,22,816 1,76,930 -21% 2,27,772 17%
Sources: Andhra Pradesh Budget Documents 2021-22; PRS.

▪ In 2021-22, State GST (SGST) is estimated to be GST Compensation

Rs 31,000 crore, the largest source of the state’s The GST (Compensation to States) Act, 2017 guarantees
own tax revenue (36%). It is estimated to increase states compensation for five years (till 2022) for any revenue
at an annual rate of 24% over the actual SGST loss arising due to GST implementation. The Act guarantees
revenue in 2019-20. In 2020-21, SGST is states a 14% annual growth in their GST revenue, failing
estimated to be 26% less than the budget estimate. which compensation grants are provided to states to meet the
shortfall. These grants are funded through the GST
▪ In 2021-22, the state is expected to generate Rs compensation cess levied by the centre. As the cess
24,500 crore through the collection of Sales collection is not sufficient to meet the compensation
Tax/VAT, an annual increase of 7% over 2019-20. requirement of states in 2020-21, a part of their requirement
will be met through loans from the centre (which will be repaid
▪ In 2020-21, the State Excise collection is estimated using future cess collection).
to be 46% higher than the budget estimate.
The state has not estimated any GST compensation grants
▪ In 2021-22, revenue from taxes and duties on for either 2020-21 or 2021-22 in the budget. As per the
electricity is estimated to be Rs 1,008 crore, revised estimates, the state is estimated to receive a loan
significantly higher than Rs 13 crore in 2020-21 amounting to Rs 2,136 crore in 2020-21 in lieu of GST
compensation.
(revised estimate) and Rs 11 crore in 2019-20.
Table 5: Some of the major state’s own tax revenue sources (in Rs crore)
% change from Annualised % of Revenue
2019-20 2020-21 2020-21 2021-22
Head BE 2020-21 to Change (2019-20 Receipts in
Actuals BE RE BE
RE 2020-21 to 2021-22 BE) 2021-22
State GST 20,227 25,604 18,871 -26% 31,000 24% 17%
Sales Tax/ VAT 21,410 25,743 17,800 -31% 24,500 7% 14%
State Excise 6,915 7,931 11,575 46% 15,000 47% 8%
Stamps Duty and Registration Fees 5,318 6,337 5,601 -12% 8,000 23% 5%
Taxes on Vehicles 3,279 4,463 2,920 -35% 5,000 23% 3%
Taxes and Duties on Electricity 11 13 13 -5% 1,008 846% 1%
Land Revenue 21 32 143 348% 172 184% 0%
GST Compensation Grants 1,841 - - - - - -
GST Compensation Loans - - 2,136 - - - -
Sources: Andhra Pradesh Budget Documents 2021-22; PRS.

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Deficits, Debt, and FRBM Targets for 2021-22

The Andhra Pradesh Fiscal Responsibility and Budget Management (FRBM) Act, 2005 provides annual targets to
progressively reduce the outstanding liabilities, revenue deficit, and fiscal deficit of the state government.
Revenue deficit: It is the excess of revenue expenditure over revenue receipts. A revenue deficit implies that the
government needs to borrow to finance its expenses which do not increase its assets or reduces its liabilities. A
revenue deficit indicates that the revenue receipts of the state are not sufficient to meet the revenue expenditure
requirements. The budget estimates a revenue deficit of Rs 5,000 crore (or 0.47% of the GSDP) in 2021-22. In
2020-21, as per the revised estimates, revenue deficit is estimated at Rs 34,927 crore (3.46% of GSDP) as compared
to a revenue deficit of Rs 18,434 crore (1.82% of GSDP) estimated at the budget stage. The 15th Finance
Commission has recommended post-devolution revenue deficit grants of Rs 30,497 crore for Andhra Pradesh for the
period between 2021-22 and 2023-24.
Fiscal Roadmap for 2021-26
Fiscal deficit: It is the excess of total expenditure over
The 15th Finance Commission recommended the following fiscal
total receipts. This gap is filled by borrowings which leads deficit targets for states for the 2021-26 period (as a % of GSDP):
to an increase in total liabilities. In 2021-22, the fiscal (i) 4% for 2021-22, (ii) 3.5% for 2022-23, and (iii) 3% for 2023-26.
deficit is estimated to be Rs 37,030 crore (3.49% of GSDP). The Commission estimates that this path will lead to a decrease
As per the revised estimates, in 2020-21, the fiscal deficit in total liabilities of Andhra Pradesh from 35% of GSDP in 2020-
of the state is estimated to be 5.38% of GSDP, which is 21 to 32.1% of GSDP in 2025-26.
higher than the budget estimate of 4.78%.
If a state is unable to fully utilise the sanctioned borrowing limit as
Enhanced borrowing limit in 2020-21: Given the situation specified above in any of the first four years (2021-25), it can avail
due to COVID-19, the central government permitted states the unutilised borrowing amount in subsequent years (within the
to increase their fiscal deficit up to 5% of GSDP in 2020- 2021-26 period). Additional borrowing worth 0.5% of GSDP will
be allowed each year for the first four years (2021-25) upon
21. Andhra Pradesh’s fiscal deficit for 2020-21 is expected undertaking certain power sector reforms including: (i) reduction
to be 5.38%, which is higher than the increased limit. All in operational losses, (ii) reduction in revenue gap, (iii) reduction
states were allowed to increase their fiscal deficit up to 4% in payment of cash subsidy by adopting direct benefit transfer,
of GSDP. The remaining 1% of GSDP is conditional on and (iv) reduction in tariff subsidy as a percentage of revenue.
the implementation of reforms by states in the following
areas (0.25% of GSDP for each reform): (i) one nation one ration card, (ii) ease of doing business, (iii) urban
local body/ utility, and (iv) power distribution. As of February 17, 2021, the state has completed the first three
reforms whereas it has partially completed the reforms in the power distribution. Andhra Pradesh is eligible to
borrow Rs 9,090 crore for implementing these reforms.
Outstanding liabilities: Outstanding liabilities refers to the accumulation of total borrowings at the end of a
financial year. In 2021-22, the outstanding liabilities are estimated to be 36.5% of the GSDP, higher than the
revised estimate for 2020-21 (35.2% of GSDP). The outstanding liabilities are estimated to increase from 31%
in 2019-20 to 36.5% in 2021-22.
Table 6: Budget targets for deficits for Andhra Pradesh (% of GSDP)
Revenue Fiscal Outstanding
Year
Deficit Deficit liabilities
2019-20 (Actuals) 2.7% 4.1% 31.0%
2020-21 (Revised) 3.5% 5.4% 35.2%
2021-22 (Budget) 0.5% 3.5% 36.5%
Note: Outstanding liabilities includes outstanding debt under Internal Debt, Loans and Advances from Centre, Small Savings, Provident
Fund, and Deposit and Reserve Funds.
Sources: Andhra Pradesh Budget Documents 2021-22; PRS.

Figure 2: Revenue and Fiscal Deficit (as % of GSDP) Figure 3: Outstanding liabilities targets (as % of
6% 5.4% GSDP)
5% 4.1% 40% 35.2% 36.5%
4% 3.5% 3.5% 31.0%
2.7%
3% 30%
2%
1% 0.5% 20%
0%
2019-20 2020-21 RE 2021-22 BE 10%

Revenue Deficit Fiscal Deficit 0%

Note: RE is Revised Estimates; BE is Budget estimates. 2019-20 2020-21 RE 2021-22 BE
Sources: Andhra Pradesh Budget Documents 2021-22; PRS.
Note: RE is Revised Estimates; BE is budget estimates.
Sources: Andhra Pradesh Budget Documents 2021-22; PRS.

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Annexure 1: Comparison of states’ expenditure on key sectors

The graphs below compare Andhra Pradesh’s expenditure on six key sectors as a proportion of its total
expenditure on all sectors. The average for a sector indicates the average expenditure in that sector by 30 states
(including Andhra Pradesh) as per their budget estimates of 2020-21.1
▪ Education: Andhra Pradesh has allocated 12.8% of its total expenditure for education in 2021-22. This is
lower than the average allocation (15.8%) for education by all states (2020-21 BE).
▪ Health: Andhra Pradesh has allocated 6.6% of its total expenditure on health, which is higher than the
average allocation for health by states (5.5%).
▪ Agriculture: Andhra Pradesh has allocated 6.2% of its total expenditure towards agriculture and allied
activities. This is similar to the average allocation for agriculture by states (6.3%).
▪ Rural development: Andhra Pradesh has allocated 7% of its expenditure on rural development. This is
higher than the average allocation for rural development by states (6.1%).
▪ Police: Andhra Pradesh has allocated 3% of its total expenditure on police, which is lower than the average
expenditure on police by states (4.3%).
▪ Roads and bridges: Andhra Pradesh has allocated 1.7% of its total expenditure on roads and bridges,
which is significantly lower than the average allocation by states (4.3%).

Spending on education as a Spending on health as a % of Spending on agriculture as

% of total expenditure total expenditure a % of total expenditure
20% 17.8% 8% 6.6% 8%
15.8% 6.4% 6.1% 6.2% 6.3%
14.1% 5.6% 5.6% 5.5%
15% 12.1% 12.8% 6% 5.0% 6% 4.6%
10% 4% 4%

5% 2% 2%

0% 0% 0%
2019-20

2019-20

2019-20
2020-21 (RE)

2020-21 (RE)

2020-21 (RE)
2020-21 (BE)

2021-22 (BE)

2020-21 (BE)

2021-22 (BE)
2021-22 (BE)

2020-21 (BE)
Average of all states

Average of all states

Average of all states

(2020-21 BE)

(2020-21 BE)

(2020-21 BE)
Spending on rural Spending on police as a % of Spending on roads and
development as a % of total total expenditure bridges as a % of total
expenditure expenditure
6%
10% 6%
8.3% 4.3%
8% 7.0% 3.8% 4.3%
6.4% 6.1% 4% 3.5%
5.6% 3.0% 4%
6% 2.5%
4% 2% 1.7%
2% 1.3% 1.1%
1.0%
2%
0% 0% 0%
2019-20

2019-20

2019-20
2020-21 (RE)

2020-21 (RE)

2020-21 (RE)
2020-21 (BE)

2021-22 (BE)

2020-21 (BE)

2021-22 (BE)
Average of all states

Average of all states

Average of all states

2021-22 (BE)

2020-21 (BE)
(2020-21 BE)

(2020-21 BE)

(2020-21 BE)

Note: 2019-20, 2020-21 (BE), 2020-21 (RE), and 2021-22 (BE) figures are for Andhra Pradesh.
Sources: Andhra Pradesh Budget Documents 2021-22; various state budgets; PRS.

1
The 30 states include the Union Territory of Delhi and Union Territory of Jammu and Kashmir.

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Annexure 2: Recommendations of the 15th Finance Commission for 2021-26

The 15th Finance Commission’s (FC) report for the 2021-26 period was released on February 1, 2021. For the
2021-26 period, the Commission has recommended the share of states in the divisible pool of central taxes to be
41%, same as that for 2020-21 (also recommended by the 15th FC in its report for 2020-21). This is 1% point
lower than the 42% share recommended by the 14th FC (for the 2015-20 period) to separately provide funds for
the newly formed union territories of Jammu and Kashmir, and Ladakh. The 15th FC proposed revised criteria
for determining the share of individual states (different from 14th FC). Based on the 15th FC’s recommendations
for the period 2021-26, Andhra Pradesh will have a 1.66% share in the divisible pool of central taxes. This
implies that out of every Rs 100 of revenue in the divisible pool during the 2021-26 period, Andhra Pradesh will
receive Rs 1.66. This is 8.2% lower than Rs 1.81 share recommended by the 14th FC for the 2015-20 period.
Table 7: Share of states in the divisible pool of central taxes under the 14th and 15th FC periods
14th FC 15th FC 15th FC % change
State 2015-20 2020-21
2015-20 2020-21 2021-26
to 2021-26 to 2021-26
Andhra Pradesh 1.81 1.69 1.66 -8.2% -1.6%
Arunachal Pradesh 0.58 0.72 0.72 25.2% -0.2%
Assam 1.39 1.28 1.28 -7.8% -0.1%
Bihar 4.06 4.13 4.12 1.6% 0.0%
Chhattisgarh 1.29 1.40 1.40 8.0% -0.3%
Goa 0.16 0.16 0.16 -0.3% 0.0%
Gujarat 1.30 1.39 1.43 10.1% 2.4%
Haryana 0.46 0.44 0.45 -1.6% 1.0%
Himachal Pradesh 0.30 0.33 0.34 13.6% 3.9%
Jammu & Kashmir 0.78 - - - -
Jharkhand 1.32 1.36 1.36 2.8% -0.2%
Karnataka 1.98 1.50 1.50 -24.5% 0.0%
Kerala 1.05 0.80 0.79 -24.8% -0.9%
Madhya Pradesh 3.17 3.23 3.22 1.5% -0.5%
Maharashtra 2.32 2.52 2.59 11.7% 3.0%
Manipur 0.26 0.29 0.29 13.3% -0.3%
Meghalaya 0.27 0.31 0.31 16.6% 0.3%
Mizoram 0.19 0.21 0.21 6.1% -1.2%
Nagaland 0.21 0.24 0.23 11.5% -0.7%
Odisha 1.95 1.90 1.86 -4.8% -2.2%
Punjab 0.66 0.73 0.74 11.9% 1.1%
Rajasthan 2.31 2.45 2.47 7.1% 0.8%
Sikkim 0.15 0.16 0.16 3.2% 0.0%
Tamil Nadu 1.69 1.72 1.67 -1.0% -2.6%
Telangana 1.02 0.88 0.86 -15.8% -1.5%
Tripura 0.27 0.29 0.29 7.7% -0.1%
Uttar Pradesh 7.54 7.35 7.36 -2.5% 0.0%
Uttarakhand 0.44 0.45 0.46 3.7% 1.3%
West Bengal 3.08 3.08 3.08 0.3% 0.1%
Total 42.00 41.00 41.00
Note: Although the 15th Finance Commission recommended the same criteria for 2020-21 and 2021-26 periods, the reference period for
computation on some underlying indicators are different. This is why the share in the divisible pool in 2020-21 and 2021-26 differ for states.
State’s share has been rounded off to two decimal places.
Sources: Reports of 14th and 15th FCs; Union Budget Documents 2021-22; PRS.

The 15th FC recommended grants worth Rs 10.3 Table 8: Grants recommended for 2021-26 (Rs crore)
lakh crore for states over five years (2021-26). A Andhra
Grants Total
portion of these grants will be conditional. 17 Pradesh
states will receive revenue deficit grants during Revenue deficit grants 2,94,514 30,497
this period. Sector-specific grants include grants Local governments grants 4,36,361 18,063*
for sectors such as health, agriculture, and Sector-specific grants 1,29,987 5,994#
education. Grants to local governments include: Disaster management grants 1,22,601 6,183
State-specific grants 49,599 2,300
(i) Rs 1.2 lakh crore for urban local bodies, (ii)
Total 10,33,062 63,037
Rs 2.4 lakh crore for rural local bodies, and (iii) Note: This does not include competition-based grants including *grants
health grants worth Rs 70,000 crore through local for incubation of new cities (part of local bodies grants), and #grants for
bodies for healthcare infrastructure. school education, and aspirational districts and blocks.
Source: Report of 15th FC; PRS.

State-specific grants recommended for Andhra Pradesh include: (i) Rs 1,400 crore for the development of core
infrastructure in Vishakhapatnam, and (ii) Rs 900 crore for the provision of safe and potable water.
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 Andhra Pradesh Budget Analysis 2021-22 PRS Legislative Research

Table 9: Taxes devolved to states as per Union Budget 2021-22

2020-21 2021-22
State 2019-20
Revised Budget
Andhra Pradesh 29,421 22,611 26,935
Arunachal Pradesh 9,363 9,681 11,694
Assam 22,627 17,220 20,819
Bihar 66,049 55,334 66,942
Chhattisgarh 21,049 18,799 22,676
Goa 2,583 2,123 2,569
Gujarat 21,077 18,689 23,148
Haryana 7,408 5,951 7,275
Himachal Pradesh 4,873 4,394 5,524
Jammu & Kashmir 12,623 -38 -
Jharkhand 21,452 18,221 22,010
Karnataka 32,209 20,053 24,273
Kerala 17,084 10,686 12,812
Madhya Pradesh 51,584 43,373 52,247
Maharashtra 37,732 33,743 42,044
Manipur 4,216 3,949 4,765
Meghalaya 4,387 4,207 5,105
Mizoram 3,144 2,783 3,328
Nagaland 3,403 3,151 3,787
Odisha 31,724 25,460 30,137
Punjab 10,777 9,834 12,027
Rajasthan 37,554 32,885 40,107
Sikkim 2,508 2,134 2,582
Tamil Nadu 27,493 23,039 27,148
Telangana 16,655 11,732 13,990
Tripura 4,387 3,899 4,712
Uttar Pradesh 1,22,729 98,618 1,19,395
Uttarakhand 7,189 6,072 7,441
West Bengal 50,051 41,353 50,070
Total 6,83,353 5,49,959 6,65,563
Note: Actuals for 2019-20 and Revised Estimates for 2020-21 have been reported in the Union Budget after adjusting for excess or less
devolution in previous years.
Sources: Union Budget Documents 2021-22; PRS.

Annexure 3: Comparison of 2020-21 Revised and 2021-22 Budget Estimates

The following tables compare the budget estimates for 2021-22 with the revised estimates for 2020-21.
Table 10: Key Components of State's Receipts and Expenditure
Particular 2020-21 RE 2021-22 BE % change from 2020-21 RE to 2021-22 BE
Receipts (1+2) 1,76,930 2,27,772 29%
Receipts except Borrowings 1,19,126 1,77,247 49%
1. Revenue Receipts (a+b+c+d) 1,18,063 1,77,196 50%
a. Own Tax Revenue 57,359 85,265 49%
b. Own Non-Tax Revenue 3,310 7,050 113%
c. Share in central taxes 24,461 26,951 10%
d. Grants-in-aid from the Centre 32,934 57,931 76%
Of which GST compensation 0 0 -
2. Capital Receipts 58,867 50,576 -14%
a. Borrowings 57,805 50,525 -13%
Of which GST compensation loan 2,136 - -
Expenditure (3+4) 1,85,468 2,29,779 24%
3. Revenue Expenditure 1,52,990 1,82,197 19%
4. Capital Expenditure 32,478 47,583 47%
i. Capital Outlay 18,797 31,198 66%
ii. Debt Repayment 11,973 15,503 29%
Revenue Deficit 34,927 5,000 -86%
Fiscal Deficit 54,369 37,030 -32%
Revenue Deficit (as % of GSDP) 3.46% 0.47% -
Fiscal Deficit (as % of GSDP) 5.38% 3.49% -
Sources: Andhra Pradesh Budget Documents 2021-22; PRS.

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 Andhra Pradesh Budget Analysis 2021-22 PRS Legislative Research

Table 11: Key Components of State's Own Tax Revenue

% change from 2020-21
Tax 2020-21 RE 2021-22 BE
RE to 2021-22 BE
State GST 18,871 31,000 64%
Sales Tax/ VAT 17,800 24,500 38%
State Excise Duty 11,575 15,000 30%
Stamps Duty and Registration Fees 5,601 8,000 43%
Taxes on Vehicles 2,920 5,000 71%
Taxes and Duties on Electricity 13 1,008 7964%
Land Revenue 143 172 20%
Sources: Andhra Pradesh Budget Documents 2021-22; PRS.

Table 12: Allocation towards Key Sector

% change from 2020-21 RE
Sector 2020-21 RE 2021-22 BE
to 2021-22 BE
Welfare of SC, ST, OBC, and Minorities 23,414 27,870 19%
Education, Sports, Arts, and Culture 24,268 27,212 12%
Rural Development 14,252 14,943 5%
Health and Family Welfare 9,570 14,088 47%
Agriculture and allied activities 10,525 13,299 26%
Irrigation and Flood Control 4,518 12,691 181%
Social Welfare and Nutrition 7,202 11,384 58%
Urban Development 4,637 8,330 80%
Transport 4,968 7,458 50%
Police 5,932 6,398 8%
Sources: Andhra Pradesh Budget Documents 2021-22; PRS.
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