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  • Andhra Pradesh Budget Analysis 2025-26

Andhra Pradesh Budget Analysis 2025-26

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The Finance Minister of Andhra Pradesh, Mr. Payyavula Keshav, presented the Budget for the state for the financial year 2025-26 on February 28, 2025.

Budget Highlights

  • The Gross State Domestic Product (GSDP) of Andhra Pradesh for 2025-26 (at current prices) is projected to be Rs 18.3 lakh crore, amounting to a growth of 14% over the revised estimates of 2024-25.

  • Expenditure (excluding debt repayment) in 2025-26 is estimated to be Rs 2,97,929 crore, an increase of 19% from the revised estimates of 2024-25.  In addition, debt of Rs 24,430 crore will be repaid by the state in 2025-26.

  • Receipts (excluding borrowings) for 2025-26 are estimated to be Rs 2,18,002 crore, an increase of 24% as compared to the revised estimate of 2024-25.

  • Revenue deficit in 2025-26 is estimated to be 1.8% of GSDP (Rs 33,186 crore), lower than the revenue deficit in 2024-25 as per revised estimates (3% of GSDP) .   In 2024-25, revenue deficit is estimated to be higher than the initial budget estimate (2.1% of GSDP).

  • Fiscal deficit for 2025-26 is targeted at 4.4% of GSDP (Rs 79,927 crore).   In 2024-25, as per the revised estimates, fiscal deficit is expected to be 4.6% of GSDP, higher than the budget estimate (4.2% of GSDP).

Policy Highlights

  • Agriculture:  Financial relief during fishing ban period will be increased from Rs 10,000 to Rs 20,000.

  • Education: Talliki Vandanam scheme will be implemented to provide financial assistance of Rs 15,000 annually to every school going child between class 1 and class 12 from 2025-26.  It will cover children in both private and government schools.  Free electricity will be provided to all government schools.

  • Entrepreneurship:  An innovation hub will be established in Amaravati to mentor start-ups in the region.  It will be linked with five other zonal centres, each supported by a prominent business group, and facilitate technology and skill upgradation in emerging sectors.

Andhra Pradesh’s Economy

  • GSDP: In 2023-24, Andhra Pradesh’s GSDP (at constant prices) is estimated to grow by 7.4% over the previous year. In comparison, India’s GDP is estimated to grow by 9.2% in 2023-24.   In 2023-24, agriculture is estimated to grow at 2%.  Manufacturing and services sectors are estimated to grow at 8.3% and 5.2%, respectively.

  • Sectors:  In 2023-24, agriculture, manufacturing, and services sectors are estimated to contribute 37%, 23%, and 40% of Andhra Pradesh’s economy, respectively (at current prices).

  • Per capita GSDP:  In 2023-24, Andhra Pradesh’s per capita GSDP (at current prices) is estimated to be Rs 2,70,295, an increase of 10% over 2022-23.  In comparison, India’s per capita GDP in 2023-24 is estimated to be Rs 2,15,935, an increase of 11% over the previous year.

 

Figure 1: Growth in Andhra Pradesh’s GSDP at constant prices (2011-12) 
  image

Note: These numbers are as per constant prices (2011-12) which implies that the growth rate is adjusted for inflation.
Sources: MoSPI; PRS.

 Budget Estimates for 2025-26

  • Total expenditure (excluding debt repayment) in 2025-26 is targeted at Rs 2,97,929 crore, an increase of 19% from the revised estimate of 2024-25.  This expenditure is proposed to be met through receipts (excluding borrowings) of Rs 2,18,002 crore and net borrowing of Rs 79,227 crore.  Total receipts for 2025-26 (other than borrowings) are expected to increase by 24% over the revised estimate of 2024-25.

  • The state estimates a revenue deficit of 1.8% of GSDP (Rs 33,186 crore) in 2025-26, lower than the revenue deficit in 2024-25 as per revised estimates (3% of GSDP) .   In 2024-25, revenue deficit is estimated to be higher than the initial budget estimate (2.1% of GSDP).  This is driven by an estimated shortfall in revenue receipts as compared to the budget target (12% lower).

  • Fiscal deficit for 2025-26 is targeted at 4.4% of GSDP (Rs 79,927 crore), lower than the revised estimates for 2024-25 (4.6% of GSDP).  In 2024-25, fiscal deficit is estimated to be higher than initial budget estimate (4.2% of GSDP).  Although net expenditure in 2024-25 is estimated to be 8% lower than the budgeted, net receipts are expected to be 12% lower than the budget estimate, resulting in a higher estimated fiscal deficit.

Table 1: Budget 2025-26 - Key figures (in Rs crore)

Items

2023-24 Actuals

2024-25 Budgeted

2024-25 Revised

% change from BE 24-25 to RE 24-25

2025-26 Budgeted

% change from RE 24-25 to BE 25-26

Total Expenditure

2,53,557

2,94,427

2,74,608

-7%

3,22,359

17%

(-) Repayment of debt

17,046

24,499

25,190

3%

24,430

-3%

Net Expenditure (E)

2,36,511

2,69,928

2,49,418

-8%

2,97,929

19%

Total Receipts

2,50,000

2,92,629

2,73,408

-7%

3,21,659

18%

(-) Borrowings

76,209

91,443

97,352

6%

1,03,657

6%

of which central capex loans*

4,091

12,950

11,750

-9%

10,200

-13%

Net Receipts (R)

1,73,791

2,01,186

1,76,056

-12%

2,18,002

24%

Fiscal Deficit (E-R)

62,720

68,743

73,362

7%

79,927

9%

as % of GSDP

4.4%

4.2%

4.6%

 

4.4%

 

Revenue Deficit

38,683

34,743

48,311

39%

33,186

-31%

as % of GSDP

2.7%

2.1%

3.0%

 

1.8%

 

Primary Deficit

33,238

39,947

42,418

6%

44,929

6%

as % of GSDP

2.3%

2.4%

2.6%

 

2.5%

 

GSDP

14,22,094

16,40,581

16,06,109

-2%

18,25,000

14%

Note: BE is Budget Estimates; RE is Revised Estimates.   *Central government has been providing 50-year interest-free loans to state governments for capital expenditure since 2020-21.  These loans are excluded from the calculation of the state's borrowing ceiling.
Sources: Annual Financial Statement, Andhra Pradesh Budget Documents 2025-26; PRS.

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