Andhra Pradesh is reeling under acute financial crisis due to sharp fall in tax revenues, officials of the finance department told YSR Congress party president and chief minister Y S Jagan Mohan Reddy on Wednesday.
Three days after Telangana chief minister K Chandrashekar Rao belling the cat by acknowledging the serious affects of global meltdown on state revenues, neighbouring Andhra Pradesh came out to reveal that it too is facing the heat.
Jagan, who held a meeting with the officials to take stock of state financial position, was presented with a grim picture of exchequer.
The officials told him that the revenue from commercial taxes officials had fallen drastically in the last four months. While they projected an increase of 14 per cent increase this year but it had come down by 5.3 per cent.
The major reason for tax revenue is lack of construction activity, which resulted in fall in sales of iron, steel and cement. It also resulted in fall in their rates, affecting the state revenues.
Similarly, there is a slump in the automobile sector with sales falling sharply. This resulted in sharp fall in GST as is the case in all the other states. The state share in the GST from the Centre is expected to be just around Rs 597 crore.
The officials expressed hope that there could be an increase of 14 per cent in commercial tax revenue in the months to come.
The drastically fallen incomes from automobile and other sectors would improve by year end.
Interestingly, Telangana which claims to be a revenue surplus state is also facing the same situation due to sharp fall in revenues.
Chief minister K Chandrasekhar Rao instructed the officials to make a realistic budget with prudent spending on various sectors, except irrigation, agriculture and welfare.
