YS Jagan Flags Alarming Fiscal Stress in Andhra Pradesh: ‘Only Borrowing Growing Fast’
YSR Congress Party President and former Andhra Pradesh Chief Minister YS Jagan Mohan Reddy has raised concerns over the “precarious outlook” for the state’s finances, citing the latest data uploaded by the Comptroller and Auditor General (CAG) for the first quarter of FY 2025–26.
In a post shared on X (formerly Twitter), Jagan pointed to the deteriorating financial condition of the Andhra Pradesh government, warning that key revenue indicators show signs of stagnation or decline while public debt is surging at an "alarming pace."
Slow Revenue Growth and Soaring Debt
According to the CAG's Monthly Key Indicators for April to June 2025, Andhra Pradesh's own revenues grew by just 3.47% compared to the same period last year. Total revenue receipts, including funds from the Central Government, rose by 6.14%. However, public debt shot up by 15.61% in just three months.
"This shows that the state is increasingly relying on borrowing to meet its expenditure," Jagan said, adding that this trend signals fiscal instability and is unsustainable in the long run.
Consumption Down, Investment Affected
Jagan pointed to weak performance in Goods and Services Tax (GST) and Sales Tax collections—both of which are seen as indicators of economic activity and consumption. The report shows that GST and Sales Tax revenue in the first quarter of FY26 was lower than the already subdued levels seen in the same period last year.
“When people spend less, GST and Sales Tax collections fall. That’s a direct signal that private consumption is slowing down,” Jagan explained. “And when private consumption falls, private investment also takes a hit. It becomes a vicious cycle.”
Public Finance Management 'Challenging' Post-Bifurcation
Jagan emphasized that managing public finances in Andhra Pradesh remains uniquely challenging due to the aftermath of state bifurcation in 2014, which left the state with limited capital infrastructure and institutional deficits.
“The right balance of public spending on welfare and development is key to economic recovery,” he said, adding that indiscriminate borrowing or inefficient spending can further erode fiscal discipline.
Corruption Allegations and Policy Criticism
Jagan didn’t mince words while attributing part of the fiscal crisis to the “rampant corruption” under the current TDP administration. He alleged that inefficient governance and mismanagement of resources by Chief Minister N Chandrababu Naidu have led to sluggish revenue generation across all categories—both tax and non-tax.
He warned that unless corrective measures are taken—such as rationalizing spending, improving tax collection, and restoring investor confidence—the state’s financial future could be at serious risk.
YS Jagan’s statement, backed by official fiscal data, paints a grim picture of Andhra Pradesh’s financial health. Whether it triggers policy changes or political debate, the CAG figures he cited will likely remain central to the discourse on governance and economic management in the state.
Fiscal stress worsens in the first quarter of this financial year
The CAG uploaded the Monthly Key Indicators for the first quarter of this financial year and these figures very clearly suggest a precarious outlook for the financial stability of the State Government, Public… pic.twitter.com/0tYnKfNSQi
— YS Jagan Mohan Reddy (@ysjagan) July 26, 2025
