In Andhra Pradesh, Chandrababu Naidu won a political battle; next is fiscal

N Chandrababu Naidu has made history by becoming the first chief minister of Andhra Pradesh to get a fourth term, outperforming his father-in-law and TDP founder NT Rama Rao who had got three terms in united Andhra Pradesh.

A silent anti-incumbency factor coupled with a shift in the traditional vote bank (Muslims, Christians and Dalits) of the YSRCP resulted in a big victory for the TDP-led alliance. A major feature of Naidu's win was his 'Super Six' promises his party made to the voters.

In a recent speech before swearing in of the NDA government at the Centre, Naidu said, "Balancing regional aspirations and national interest must run parallelly, ensuring holistic development across all strata of society." It was interpreted by many as an articulation of his demand for central assistance for Andhra, which is in dire financial straits and strapped for funds for construction of a new capital in Amaravati to substitute Hyderabad which it lost to Telangana, completion of Polavaram irrigation project and, significantly, for fulfilling the Super Six promises that Naidu made to wrest the reins back from arch rival Jagan Mohan Reddy.

The Super Six challenge
Naidu, who is scheduled to be sworn in as Chief Minister of Andhra Pradesh on June 12, will face the daunting task of fulfilling the "Super Six" that his party promised before the Assembly polls.

As a precursor to his journey of financial challenges, Naidu needs over Rs 4,500 crore to disburse social pensions to about 65 lakh beneficiaries by July 1. As part of his "Super Six", Naidu promised to hike the monthly pension to Rs 4,000 from the existing Rs 3,000 along with a backlog of Rs 3,000 from July. All together it would cost the exchequer Rs 4,500 crore in July, besides salaries to employees and pensioners which is pegged at another Rs 6,000 crore.

The new TDP government will have to mop up over Rs 10,000 crore to fulfill the financial requirements for July, a retired senior bureaucrat told PTI. According to him, the state government has a committed expenditure of nearly Rs 1.30 lakh crore annually to meet the requirements of salaries, pensions, loan repayments and interests. According to the Reserve Bank website, the Andhra government offered to sell securities worth Rs 2,000 crore on June 11 through auction.

The state needs Rs 2,600 crore every month to meet the social pension alone. Similarly, as part of the manifesto, the Telugu Desam Party promised free travel to women in government-run buses. An official of Andhra Pradesh State Road Transport Corporation told PTI the SRTC earns about Rs 450 to Rs 500 crore through ticket revenue monthly and women passengers are expected to be in the range of 35-40 per cent. He, however, said there was no study on women travellers done so far in the state. According to him, the Telangana RTC which implements a similar scheme estimated that women constitute nearly 50 per cent of the total commuters. Towards the free travel scheme, the new government will have to reimburse nearly Rs 2,000 crore annually to the SRTC.

Under "Super Six," the TDP also promised Rs 15,000 to every school-going child per annum. The outgoing YRS Congress Party government had earmarked Rs 6,500 crore towards a similar scheme called "Amma Vodi." With Naidu removing the cap on the number of beneficiaries, the amount may go up substantially. The party also promised three free cooking gas cylinders to every household per year and Rs 20,000 annual financial assistance to every farmer, among others.

According to the government budget document 2023-24, the state has Rs 4.83 lakh crore public debt, besides Rs 1.39 lakh crore government guarantees and ?26,296 crore of loans from the Centre.

How will Naidu manage the math
It is estimated that the 'Super Six' welfare schemes promised by Naidu, expected to be rolled out within the first 100 days of taking charge next week, will cost a staggering Rs 97,000 crore, ET has reported. Team Naidu, however, is not intimidated by the figure despite the fiscal state of Andhra Pradesh. Reason being, all homework is largely done.

Experts have been at work even before the poll promise was made, to tie up the ends and account for funding in various ways from increasing the tax-GDP ratio by 1% to 1.5%, to bringing in revenue generating projects into the coastal state and ensuring completed checklists for due central funding for national schemes. An economic package from the Centre could allow even more elbow room.

ET has reported that plans are afoot to go down again to the household level like his campaign's 'Idhem Karma' voter survey- but this time a survey to assess per capita income, understand deeper economic concerns of every family and bridge the gaps between 'haves and have nots' with targeted schemes that are flexible and more customised rather than blanket 'doles' which become ineffective after a point.

"Chandrababu Naidu today is not just looking at or offering plain wealth distribution like the previous government but is focussing also at wealth creation- both have to go hand in hand", an insider has told ET.

(With inputs from TOI and PTI)