By Dese Gowda,Raj Rayasam
Copyright thesouthfirst
Andhra Pradesh exhausted two-thirds of annual debt target in five months: CAG report
In the first five months till August 2025, the Andhra Pradesh government received ₹61,578 crore as revenue receipts. In the same period, its capital receipts from borrowings stood at ₹55,901 crore.
Synopsis: The Comptroller and Auditor General’s latest report shows Andhra Pradesh’s borrowings reached ₹55,901 crore in the first five months of 2025-26, almost matching revenue receipts of ₹61,578 crore and exhausting 70 percent of the annual debt target. Despite modest revenue growth, expenditure and debt are rising sharply, leaving limited fiscal headroom for the remainder of the financial year.
Look at the paradox. For a large section of media, it was always a case of mounting debts whenever the previous YS Jagan Mohan Reddy-led government in Andhra Pradesh borrowed to cover the fiscal deficit.
For the same newspapers now, the same exercise by the present Telugu Desam Party (TDP)-led government appears as a resource mobilisation exercise.
That is how sections of media presented the data from the latest Comptroller and Auditor General’s (CAG) monthly key indicators for August 2025, showing that borrowings in the first five months of the 2025-26 fiscal year more or less equalled revenue receipts.
The findings of CAG were carried as a one-paragraph filler by a leading Telugu newspaper, a sharp contrast to the loud headlines that used to dominate the front pages about excessive borrowings during the YSRCP dispensation.
“Our government had raised ₹3.32 lakh crore in five years, but the incumbent Chandrababu Naidu regime has raised ₹1.79 lakh crore in just 15 months,” former minister in the YSRCP government Merugu Nagarjuna put the hypocrisy in context.
Also Read: Andhra Pradesh at a fiscal crossroads: High debt, low flexibility, and the cost of populism
Borrowings near revenue receipts
In the first five months till August 2025, the Andhra Pradesh government received ₹61,578 crore as revenue receipts. In the same period, its capital receipts from borrowings stood at ₹55,901 crore, according to the CAG report.
This points to continuing fiscal stress, as borrowings and liabilities are rising faster than revenue growth, despite having budgeted ₹79,927 crore in borrowings for the entire 2025-26 fiscal year.
With seven more months still left in the financial year, the state has already breached two-thirds of its borrowing and deficit targets.
This means Andhra Pradesh is exhausting its debt cushion faster than planned, leaving limited headroom for the rest of the year.
Debt now the largest source of receipts
Worryingly, the borrowings of ₹55,901 crore have become the single largest contributor to the state’s receipts, almost matching revenue receipts of ₹61,578 crore.
Till August this financial year:
Revenue receipts: ₹61,578 crore against the 2025-26 budget estimate of ₹2,17,976 crore
Capital receipts (borrowings): ₹55,901 crore against the 2025-26 budget estimate of ₹2,97,929 crore
Revenue expenditure has already reached ₹1,12,877 crore, overshooting receipts by a large margin.
This has resulted in a revenue deficit of ₹41,635 crore – already 125 percent of the annual target just five months into the fiscal year.
The fiscal deficit—the gap between total receipts and expenditure—stood at ₹55,016 crore by August, or 69 percent of the annual target.
More alarmingly, the primary deficit, which excludes interest payments, was ₹40,410 crore, nearly 90 percent of the annual projection.
Economists warn that such high levels of deficit in the first half of the year will inevitably force the state to borrow heavily in the remaining months, breaching fiscal discipline norms.
While revenue receipts have grown modestly compared to last year, expenditure growth has been much sharper. For instance:
Revenue receipts up to August 2025: ₹61,578 crore (vs. ₹51,589 crore last year)
Borrowings in the same period: ₹55,901 crore (vs. ₹52,987 crore last year)
Revenue deficit: ₹41,635 crore (vs. ₹28,000 crore approx. last year)
Although revenues are inching up, debt is ballooning faster, creating an unsustainable imbalance.
Also Read: Andhra Pradesh turns to technology and sustainable growth to close fiscal gap
Rising debt since the state’s formation
Since Andhra Pradesh was created in 2014, the state’s debt trajectory shows a steady rise.
From 2014-15 to 2018-19 (Chandrababu Naidu’s first term in the truncated state), the outstanding debt was approximately ₹2,57,510 crore, about 28.7 percent of the state’s Gross State Domestic Product (GSDP), according to budget analysis and the CAG report.
From 2019-20 to 2023-24 (under the previous YSRCP regime), outstanding liabilities were around ₹4,04,516 crore (internal debt ₹3,93,158 crore plus other loans/advances), corresponding to about 33.3 percent of GSDP, as per the 2023-24 Finance Accounts audited by the CAG.
For the 2025-26 financial year so far (the present TDP government), the outstanding debt continues to rise. Estimates suggest total liabilities of over ₹4.4 lakh crore by early 2025, including public debt and guarantees.
The revised state budget for 2024-25 put outstanding liabilities at ₹5.6 lakh crore (on-budget), which includes:
Public debt (market loans, central loans, etc.)
Small savings, provident funds, reserve funds, deposits
It does not include off-budget borrowings raised through state-owned corporations, special purpose vehicles, or guarantees that do not appear directly in the state budget.
The last available CAG report noted ₹1.18 lakh crore in off-budget borrowings as of 31 March 2022.
(Edited by Dese Gowda)
