Andhra Pradesh Economy - revised estimates 2008-09

As part of the Andhra Pradesh Fiscal Responsibility and Budget Management

(APFRBM) Act – 2005, the State Government has to prepare a Macro-

Economic Framework Statement to be laid down before the Legislature.

Accordingly, the Macro-Economic Framework Statement detailing macro-

economic picture of the state is presented below:

 

The GSDP at constant (1999-2000) Prices for the year 2008-09 (Updated

Advance) is estimated at Rs.2,52,318 crores as against Rs.2,39,102 crores

for 2007-08 (Quick Estimates) reflecting a growth of 5.53%. During last Five

Years, the GSDP of A.P on the average recorded 9.14%, and higher than the

Annual Average Growth of GDP (All India) which is 8.49% only. Further,

during last three years, the GSDP of AP was consistently more than 10%,

which itself is a record. With more than 10% Growth for the past 3 years and

due to this high Base effect, further Growth Rate in during 2008-09 is only

5.53%. Inspite of Global recession and negative growth trends in the major

world economies, our State is able to continue the growth path along with the

Nation. 

 

The sectoral composition of GSDP growth for 2008-09 in Service sector with

10.06% has maintained the same growth tempo, while the Agriculture sector

with 2.27% and industry sector with 0.12% have recorded little lesser growth

rate. At All India level (GDP), the Sectoral Growth rate in Service sector is

9.67%, while in Agriculture Sector, it is 1.60%. In these both sectors, our

State's Growth rate is higher than All India level. The relative decline in

Agriculture growth during 2008-09 is due to a very high base effect during the

previous years especially last year i.e. 14.85%. However, the foodgrain

production has reached a peak of 204.04 lakh tones during the year 2008-09.

 

The Per Capita Income figure gives a better idea of the standard of living of

the people. The Per Capita Income of Andhra Pradesh at current prices is

estimated at Rs.39,597 in 2008-09 as against Rs.35,864 in 2007-08. At

current prices, the Per Capita Income has increased by 10.41%, while at

constant (1999-2000) prices, it has gone up from Rs.26,195 in 2007-08 to

Rs.26,983 in 2008-09 registering a growth rate of 3.01 per cent.

 

The growth of the economy of the State also depends on its rate of capital

formation. The gross fixed capital formation in Andhra Pradesh has shown a

growth of 23.69% during 2006-07 and as the percentage of GSDP it works out

to 28.96%. 

 

Interest: During the year 2008-09 Reserve Bank of India has decreased CRR

to 5% in its Monitory policy to give fillip to the economy. The Bank rate, Repo

rate and reverse Repo rate are also decreased to 4.75% and 3.25%

respectively. These decreases have made Market Borrowings for the State

little bit cheaper. The State is able to raise resources at competitive rates from

the market due to the confidence it enjoys in the financial markets and good

ratings by rating agencies. The State is implementing interest subsidy

 

 

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programmes (Pavala Vaddi) to needy sections in the State to increase

economic activities and to make poor and downtrodden active participants in

the growth process. The State Government has extended this Pavala-Vaddi

Scheme to farmers, small entrepreneurs, Weavers.

 

Public Finance: The finances of Government of Andhra Pradesh are robust

due to efficient public finance management. The State is well in advance in

eliminating revenue deficit and achieving other fiscal targets enacted in

APFRBM Act, 2005. The State revenue receipts stood at Rs.69.685 crores in

2008-09 (RE) of which the State's own revenue is Rs.44,138 crores. The

revenue receipts under State's own taxes during the year 2008-09 (RE) stood

at Rs.35,739 crores as against Rs.28,794 crores in the previous year

registering a growth rate of 24.12 %. Total expenditure (revenue + capital)

stood at Rs.85,363 crores for the year 2008-09 (RE).  The capital expenditure

constituted 20.78% of the total expenditure (revenue + capital).  Revenue

Surplus for 2008-09 (RE) is Rs.2,066 crores. The Fiscal Deficit is Rs.10,427

crores which 2.81% of GSDP.