Andhra Pradesh remains among the few Indian states where total revenue receipts have not doubled over the past decade, according to the latest Comptroller and Auditor General (CAG) of India report, 'State Finances 2024-25'. The report highlights sluggish revenue growth, mounting fiscal pressures, and increasing dependence on borrowed funds to meet routine expenditure.
Revenue Receipts and Own Tax Revenue
AP generated total revenue receipts of ₹1,67,676 crore in FY 2024-25. The state's own tax revenue (SOTR) contributed ₹89,435 crore, accounting for 53% of total receipts, while non-tax revenue stood at ₹5,972 crore (3.5%). Together, AP's own revenues accounted for 57% of total receipts. This placed Andhra Pradesh ahead of Bihar and several Northeastern states but lagged behind leading states such as Haryana (80%), Telangana (79%), Maharashtra (76%), Tamil Nadu (75%), Karnataka (75%), Kerala (74%), and Gujarat (73%).
Revenue Deficit and Expenditure Coverage
The weak growth in revenue receipts directly affected AP's fiscal position. The state recorded a revenue deficit of ₹60,285 crore in FY 2024-25, the highest among all states. In contrast, Uttar Pradesh posted a revenue surplus of ₹59,327 crore during the same period. Revenue receipts covered less than 80% of the state's revenue expenditure, making AP one of only three states—along with Kerala and Punjab—where revenue receipts met less than four-fifths of routine expenditure.
Sluggish SOTR and SGST Growth
AP's annual SOTR growth averaged 10.7% in the pre-GST period but slowed to 7.8% between FY 2018-19 and FY 2024-25, significantly below the all-India average of 11%. This was the second-lowest growth rate among states after Kerala (7.7%). A similar trend was observed in state GST collections. AP recorded average annual SGST growth of 8.5% during the period, well below the national average of 12.2% and again the second-lowest among states after Kerala.
Reliance on Borrowings and Cash-Flow Pressures
With no revenue deficit grants available, the state government increasingly relied on borrowings to meet routine commitments such as salaries and pensions rather than directing resources towards capital asset creation. The report notes that AP depended on ways and means advances (WMA) and Reserve Bank of India overdrafts for 357 out of 365 days in FY 2024-25, highlighting persistent cash-flow pressures.
Excise Revenue Growth
Despite challenges, excise revenue emerged as a major growth source, with AP ranking among leading states. Excise collections, driven largely by liquor duties, rose by 353% over the decade to reach ₹19,882 crore in FY 2024-25. This exceeded the ₹17,423 crore collected through taxes on sales and trade during the year. Uttar Pradesh recorded the highest excise receipts of ₹52,575 crore in FY25, followed by Karnataka (₹35,784 crore), Maharashtra (₹25,466 crore), and Andhra Pradesh (₹19,882 crore). Across all states, aggregate excise collections increased by 173% between FY 2015-16 and FY 2024-25. Telangana recorded the highest growth at 388%, followed by West Bengal (386%) and AP (353%).
