Is center planning to fund AP revenue deficit?

Did central government finally agree to fund the revenue deficit of AP? Did the agitation of Telugu MPs yielding some success? These are the signals coming from BJP led union government. The central government finally gave positive signals to the state that it will bridge the revenue deficit. As per the 14th Finance commission regulations, center finally agreed to fund the revenue deficit for the fiscal year 2014-15. Also, center has agreed to release funds for the three years at a time.

Union Finance Minister Jaitley, Railway Minister Piyush Goyal and BJP national president Amit Shah, met with minister Sujana Chowdary and discussed on key issues like funds for the AP, Railway zone for Visakhapatnam and formation of national institutions in AP. It is reported that, if the details of expenditure are disclosed clearly, center is ready to release remaining funds for construction of Amravati. Also center expressed their willingness to release the EAP funds as per the special package. Also, Arun Jaitley has requested Piyush Goyal to expedite the process of Vizag Railway zone. Ministers also agreed to expedite on Dugarajapatnam port, Petrochemical complex and Kadapa steel plant.

This is all the information coming from Delhi circles. We need to wait for official confirmation from Delhi bigwigs. Hope they understand the agony of Telugu people.

For the enthusiasts, below are the details on what is the exact meaning of revenue deficit:

Government’s source of income:

Revenue receipts

Tax revenue – this includes all the money coming from direct and indirect taxes

Non tax revenue – this includes foreign aid, income earned from government units

Capital receipts – this includes borrowings, money from disinvestment etc

Government expenditure:

Revenue expenditure – this includes salaries to employees, subsidies, welfare schemes, interest payments. In a way these are the mandatory monthly payments

Capital expenditure – Expenditure for big projects that dont yield immediate revenues

Budget deficit is the difference between total income and total expenditure. Budgetary deficit is not a bad thing if it is because of more money spent on capital expenditure because such projects will give excellent returns in long term. But revenue deficit is definitely bad thing because that means your earnings are less than your mandatory revenue expenditure. This is why state ask for center help to bridge revenue deficit gap.