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Of development and welfare

The number of southern states has increased to five after the bifurcation of Andhra Pradesh into two separate states. The budgetary trends of these states continue to run on similar lines as in previous years by way of balancing their development programmes with welfare programmes in order to continue in power through populist schemes.

Due to this phenomenon, development initiatives take back seat. The revenue and fiscal indicators also show that majority of the states are living beyond their means.

Table 1 shows that except Telangana and Karnataka which have revenue surplus, the other three states Tamil Nadu, Andhra Pradesh and Kerala, are expected to have revenue deficit, for the financial year 2015-16 as in the previous year. Revenue deficit for Kerala is expected to decline whereas it is expected to go up for Tamil Nadu and Andhra Pradesh.

Regarding fiscal deficit it is expected to fall in Andhra Pradesh and Telangana and significantly increase in Tamil Nadu and Kerala, marginally in Karnataka in 2015-16 compared to 2014-15.            

Table 2 reflects the revenue mobilisation efforts and expenditure programmes of the respective government. Overall, total revenue receipts are greater than total revenue expenditure in Telangana and Karnataka whereas revenue expenditure is greater than revenue receipts in Tamil Nadu, Andhra Pradesh and Kerala both in 2014-15 (R.E) and for 2015-16 (B.E.). There is some marginal increase in the capital receipts of Telangana, Karnataka and Kerala while it is expected to decline in Andhra Pradesh in the ensuing financial year 2015-16 compared to the previous year. Correspondingly, capital expenditure also shows substantial increase in all the states except Andhra Pradesh. In Karnataka capital receipts are much less than capital expenditure for 2014-15 and 2015-16.

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