Andhra Pradesh Budget Analysis 2025-26

 Page 1


 
  
 
 
 
    
      
    
Andhra Pradesh Budget Analysis 
2025-26 
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)  
 
Note: These numbers are as per constant prices (2011-12) 
which implies that the growth rate is adjusted for inflation. 
  
-0.6%
24.9%
-9.2%
1.5%
10.6%
6.8%
10.8%
9.6%
4.0%
5.3%
9.0%
5.8%
2.0%
8.3%
5.2%
7.4%
-15%
-10%
-5%
0%
5%
10%
15%
20%
25%
30%
35%
Agriculture
Manufacturing
Services
GSDP
2020-21 2021-22 2022-23 2023-24
Page 2


 
  
 
 
 
    
      
    
Andhra Pradesh Budget Analysis 
2025-26 
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)  
 
Note: These numbers are as per constant prices (2011-12) 
which implies that the growth rate is adjusted for inflation. 
  
-0.6%
24.9%
-9.2%
1.5%
10.6%
6.8%
10.8%
9.6%
4.0%
5.3%
9.0%
5.8%
2.0%
8.3%
5.2%
7.4%
-15%
-10%
-5%
0%
5%
10%
15%
20%
25%
30%
35%
Agriculture
Manufacturing
Services
GSDP
2020-21 2021-22 2022-23 2023-24
 
 
 
 
 
 
 
 
   
 
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. 
 
Expenditure in 2025-26 
? Revenue expenditure for 2025-26 is proposed to be 
Rs 2,51,163 crore, an increase of 12% over the 
revised estimate of 2024-25.  This includes 
expenditure on committed items such as salaries, 
pension and, interest and other items such as grants, 
and subsidies. 
? Capital outlay for 2025-26 is proposed to be Rs 
40,636 crore, an increase of 69% over the previous 
year.  Capital outlay indicates the expenditure 
towards creation of assets (excluding loans given by 
state).  Key sectors with a significant rise in capital 
outlay compared to the revised estimate for 2024-25 
include: (i) irrigation and flood control (Rs 6,991 
crore increase) and (ii) water supply and sanitation 
(Rs 1,855 crore increase), and rural development (Rs 
1,489 crore increase).  In 2024-25, capital outlay is estimated to be 26% lower than budgeted.  Sectors with 
a relatively higher decrease in 2024-25 include: (i) irrigation and flood control (Rs 5,884 crore lower than 
budgeted), and (ii) rural development (Rs 1,142 crore lower). 
? In 2025-26, loans and advances given by the state are expected to be Rs 6,131 crore, about six times the 
revised estimate of 2024-25.  This increase is driven by loans estimated for major irrigation (Rs 1,491 
crore) and urban development (Rs 1,945 crore).  As per revised estimates, no loans are estimated to be 
provided towards these accounts in 2024-25.  
Underspending in 2023-24 and 2024-25 as compared to 
budget estimates  
There has been significant underspending in the revised 
estimates of 2024-25 as compared to the budgeted 
estimates.  Net expenditure of the state is expected to be 
lower by 8% in 2024-25.  This is driven by underspending in 
sectors such as: (i) agriculture (51% underspending), (ii) 
irrigation and flood control (39% underspending), (iii) rural 
development (24% underspending) and (iv) welfare of SC, 
ST, OBC and minorities (19% underspending).  In 2023-24, 
net expenditure of the state was 9% lower than the budgeted 
estimates.  Sectors that have seen decrease in spending 
include: (i) irrigation and flood control, (ii) social welfare and 
nutrition, (iii) transport, and (iv) agriculture (see Annexure 2 
for details).   
Page 3


 
  
 
 
 
    
      
    
Andhra Pradesh Budget Analysis 
2025-26 
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)  
 
Note: These numbers are as per constant prices (2011-12) 
which implies that the growth rate is adjusted for inflation. 
  
-0.6%
24.9%
-9.2%
1.5%
10.6%
6.8%
10.8%
9.6%
4.0%
5.3%
9.0%
5.8%
2.0%
8.3%
5.2%
7.4%
-15%
-10%
-5%
0%
5%
10%
15%
20%
25%
30%
35%
Agriculture
Manufacturing
Services
GSDP
2020-21 2021-22 2022-23 2023-24
 
 
 
 
 
 
 
 
   
 
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. 
 
Expenditure in 2025-26 
? Revenue expenditure for 2025-26 is proposed to be 
Rs 2,51,163 crore, an increase of 12% over the 
revised estimate of 2024-25.  This includes 
expenditure on committed items such as salaries, 
pension and, interest and other items such as grants, 
and subsidies. 
? Capital outlay for 2025-26 is proposed to be Rs 
40,636 crore, an increase of 69% over the previous 
year.  Capital outlay indicates the expenditure 
towards creation of assets (excluding loans given by 
state).  Key sectors with a significant rise in capital 
outlay compared to the revised estimate for 2024-25 
include: (i) irrigation and flood control (Rs 6,991 
crore increase) and (ii) water supply and sanitation 
(Rs 1,855 crore increase), and rural development (Rs 
1,489 crore increase).  In 2024-25, capital outlay is estimated to be 26% lower than budgeted.  Sectors with 
a relatively higher decrease in 2024-25 include: (i) irrigation and flood control (Rs 5,884 crore lower than 
budgeted), and (ii) rural development (Rs 1,142 crore lower). 
? In 2025-26, loans and advances given by the state are expected to be Rs 6,131 crore, about six times the 
revised estimate of 2024-25.  This increase is driven by loans estimated for major irrigation (Rs 1,491 
crore) and urban development (Rs 1,945 crore).  As per revised estimates, no loans are estimated to be 
provided towards these accounts in 2024-25.  
Underspending in 2023-24 and 2024-25 as compared to 
budget estimates  
There has been significant underspending in the revised 
estimates of 2024-25 as compared to the budgeted 
estimates.  Net expenditure of the state is expected to be 
lower by 8% in 2024-25.  This is driven by underspending in 
sectors such as: (i) agriculture (51% underspending), (ii) 
irrigation and flood control (39% underspending), (iii) rural 
development (24% underspending) and (iv) welfare of SC, 
ST, OBC and minorities (19% underspending).  In 2023-24, 
net expenditure of the state was 9% lower than the budgeted 
estimates.  Sectors that have seen decrease in spending 
include: (i) irrigation and flood control, (ii) social welfare and 
nutrition, (iii) transport, and (iv) agriculture (see Annexure 2 
for details).   
 
 
 
 
 
 
 
 
   
 
Table 2:  Expenditure budget 2025-26 (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 
Revenue Expenditure 2,12,450 2,35,917 2,24,343 -5% 2,51,163 12% 
Capital Outlay 23,330 32,713 24,072 -26% 40,636 69% 
Loans given by the state 731 1,298 1,003 -23% 6,131 511% 
Net Expenditure 2,36,511 2,69,928 2,49,418 -8% 2,97,929 19% 
 
Committed expenditure: Committed expenditure of a state typically includes expenditure on payment of 
salaries, pension, and interest.  A larger proportion of the budget allocated for committed expenditure items 
limits the state’s flexibility to decide on other expenditure priorities, such as capital outlay.  In 2025-26, the state 
government has estimated to spend Rs 34,998 crore on interest payment, which is 16% of its revenue receipts.  
Rs 21,935 crore is estimated to be spent towards pension (10% of revenue receipts).  In 2023-24, the state spent: 
(i) Rs 36,872 crore on salaries (21% of revenue receipts), (ii) Rs 29,481 crore on interest payments (17% of 
revenue receipts) and (iii) Rs 21,696 crore on pensions (12% of revenue receipts).  In all, committed expenditure 
contributed 51% of the state’s revenue receipts in 2023-24.   
Table 3: Committed Expenditure in 2025-26 (in Rs crore) 
Committed 
Expenditure 
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 
Salaries 36,872 NA NA - NA - 
Pension 21,696 21,808 20,185 -7% 21,935 9% 
Interest payment 29,481 28,796 30,944 7% 34,998 13% 
 
Sector-wise expenditure: The sectors listed below account for 68% of the total expenditure on sectors by the 
state in 2025-26.  A comparison of Andhra Pradesh’s expenditure on key sectors with that by other states is 
shown in Annexure 1. 
Table 4: Sector-wise expenditure under Andhra Pradesh Budget 2025-26 (in Rs crore) 
Sectors 
2023-24 
Actuals 
2024-25 
BE 
2024-25 
RE 
2025-26 
BE 
% change from 
RE 24-25 to  
BE 25-26 
Budget Provisions (2025-26) 
Welfare of SC, ST, 
OBC, and Minorities 
36,185 47,277 38,475 52,047 35% 
? Rs 19,899 crore allocated towards NTR Bharosa 
pension scheme 
Education, Sports, 
Arts and Culture 
31,400 33,111 31,882 35,213 10% 
? Rs 20,492 crore allocated towards teaching grants 
? Rs 2,335 crore allocated towards Samagra Shiksha  
Health and Family 
Welfare 
15,106 18,732 17,202 19,589 14% 
? Rs 4,000 crore allocated for Dr Nandamuri Taraka 
Ramarao Vaidya Seva trust 
? Rs 1,385 crore allocated towards teaching hospitals  
Rural Development 14,147 15,899 12,073 18,140 50% ?  Rs 5,956 crore allocated towards rural employment 
Irrigation and Flood 
Control 
6,802 15,237 9,339 16,490 77% 
? Rs 6,705 crore allocated for Polavaram project 
? Rs 3,447 crore allocated for irrigation projects in 
Anantpur 
Agriculture and 
Allied Activities 
10,022 12,514 6,192 14,138 128% 
? Rs 6,300 crore allocated for Annadatta Sukhibhava 
scheme 
Energy 14,927 7,612 14,466 13,135 -9% 
? Rs 11,883 crore allocated towards power subsidy for 
agricultural and allied activities. 
Urban Development 8,633 11,168 12,604 11,625 -8% 
? Rs 6,000 crore allocated for Amaravati capital city 
development project 
Social Welfare and 
Nutrition 
5,957 11,899 14,700 9,071 -38% 
? Rs 3,344 crore allocated towards subsidy on rice 
? Rs 900 crore allocated towards Bala Sanjeevani 
scheme 
Transport 6,105 8,035 7,192 8,055 12% 
? Rs 1,968 crore allocated towards capital outlay on 
roads and bridges. 
% of total 
expenditure on all 
sectors 
63% 68% 66% 68%   
   
Page 4


 
  
 
 
 
    
      
    
Andhra Pradesh Budget Analysis 
2025-26 
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)  
 
Note: These numbers are as per constant prices (2011-12) 
which implies that the growth rate is adjusted for inflation. 
  
-0.6%
24.9%
-9.2%
1.5%
10.6%
6.8%
10.8%
9.6%
4.0%
5.3%
9.0%
5.8%
2.0%
8.3%
5.2%
7.4%
-15%
-10%
-5%
0%
5%
10%
15%
20%
25%
30%
35%
Agriculture
Manufacturing
Services
GSDP
2020-21 2021-22 2022-23 2023-24
 
 
 
 
 
 
 
 
   
 
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. 
 
Expenditure in 2025-26 
? Revenue expenditure for 2025-26 is proposed to be 
Rs 2,51,163 crore, an increase of 12% over the 
revised estimate of 2024-25.  This includes 
expenditure on committed items such as salaries, 
pension and, interest and other items such as grants, 
and subsidies. 
? Capital outlay for 2025-26 is proposed to be Rs 
40,636 crore, an increase of 69% over the previous 
year.  Capital outlay indicates the expenditure 
towards creation of assets (excluding loans given by 
state).  Key sectors with a significant rise in capital 
outlay compared to the revised estimate for 2024-25 
include: (i) irrigation and flood control (Rs 6,991 
crore increase) and (ii) water supply and sanitation 
(Rs 1,855 crore increase), and rural development (Rs 
1,489 crore increase).  In 2024-25, capital outlay is estimated to be 26% lower than budgeted.  Sectors with 
a relatively higher decrease in 2024-25 include: (i) irrigation and flood control (Rs 5,884 crore lower than 
budgeted), and (ii) rural development (Rs 1,142 crore lower). 
? In 2025-26, loans and advances given by the state are expected to be Rs 6,131 crore, about six times the 
revised estimate of 2024-25.  This increase is driven by loans estimated for major irrigation (Rs 1,491 
crore) and urban development (Rs 1,945 crore).  As per revised estimates, no loans are estimated to be 
provided towards these accounts in 2024-25.  
Underspending in 2023-24 and 2024-25 as compared to 
budget estimates  
There has been significant underspending in the revised 
estimates of 2024-25 as compared to the budgeted 
estimates.  Net expenditure of the state is expected to be 
lower by 8% in 2024-25.  This is driven by underspending in 
sectors such as: (i) agriculture (51% underspending), (ii) 
irrigation and flood control (39% underspending), (iii) rural 
development (24% underspending) and (iv) welfare of SC, 
ST, OBC and minorities (19% underspending).  In 2023-24, 
net expenditure of the state was 9% lower than the budgeted 
estimates.  Sectors that have seen decrease in spending 
include: (i) irrigation and flood control, (ii) social welfare and 
nutrition, (iii) transport, and (iv) agriculture (see Annexure 2 
for details).   
 
 
 
 
 
 
 
 
   
 
Table 2:  Expenditure budget 2025-26 (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 
Revenue Expenditure 2,12,450 2,35,917 2,24,343 -5% 2,51,163 12% 
Capital Outlay 23,330 32,713 24,072 -26% 40,636 69% 
Loans given by the state 731 1,298 1,003 -23% 6,131 511% 
Net Expenditure 2,36,511 2,69,928 2,49,418 -8% 2,97,929 19% 
 
Committed expenditure: Committed expenditure of a state typically includes expenditure on payment of 
salaries, pension, and interest.  A larger proportion of the budget allocated for committed expenditure items 
limits the state’s flexibility to decide on other expenditure priorities, such as capital outlay.  In 2025-26, the state 
government has estimated to spend Rs 34,998 crore on interest payment, which is 16% of its revenue receipts.  
Rs 21,935 crore is estimated to be spent towards pension (10% of revenue receipts).  In 2023-24, the state spent: 
(i) Rs 36,872 crore on salaries (21% of revenue receipts), (ii) Rs 29,481 crore on interest payments (17% of 
revenue receipts) and (iii) Rs 21,696 crore on pensions (12% of revenue receipts).  In all, committed expenditure 
contributed 51% of the state’s revenue receipts in 2023-24.   
Table 3: Committed Expenditure in 2025-26 (in Rs crore) 
Committed 
Expenditure 
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 
Salaries 36,872 NA NA - NA - 
Pension 21,696 21,808 20,185 -7% 21,935 9% 
Interest payment 29,481 28,796 30,944 7% 34,998 13% 
 
Sector-wise expenditure: The sectors listed below account for 68% of the total expenditure on sectors by the 
state in 2025-26.  A comparison of Andhra Pradesh’s expenditure on key sectors with that by other states is 
shown in Annexure 1. 
Table 4: Sector-wise expenditure under Andhra Pradesh Budget 2025-26 (in Rs crore) 
Sectors 
2023-24 
Actuals 
2024-25 
BE 
2024-25 
RE 
2025-26 
BE 
% change from 
RE 24-25 to  
BE 25-26 
Budget Provisions (2025-26) 
Welfare of SC, ST, 
OBC, and Minorities 
36,185 47,277 38,475 52,047 35% 
? Rs 19,899 crore allocated towards NTR Bharosa 
pension scheme 
Education, Sports, 
Arts and Culture 
31,400 33,111 31,882 35,213 10% 
? Rs 20,492 crore allocated towards teaching grants 
? Rs 2,335 crore allocated towards Samagra Shiksha  
Health and Family 
Welfare 
15,106 18,732 17,202 19,589 14% 
? Rs 4,000 crore allocated for Dr Nandamuri Taraka 
Ramarao Vaidya Seva trust 
? Rs 1,385 crore allocated towards teaching hospitals  
Rural Development 14,147 15,899 12,073 18,140 50% ?  Rs 5,956 crore allocated towards rural employment 
Irrigation and Flood 
Control 
6,802 15,237 9,339 16,490 77% 
? Rs 6,705 crore allocated for Polavaram project 
? Rs 3,447 crore allocated for irrigation projects in 
Anantpur 
Agriculture and 
Allied Activities 
10,022 12,514 6,192 14,138 128% 
? Rs 6,300 crore allocated for Annadatta Sukhibhava 
scheme 
Energy 14,927 7,612 14,466 13,135 -9% 
? Rs 11,883 crore allocated towards power subsidy for 
agricultural and allied activities. 
Urban Development 8,633 11,168 12,604 11,625 -8% 
? Rs 6,000 crore allocated for Amaravati capital city 
development project 
Social Welfare and 
Nutrition 
5,957 11,899 14,700 9,071 -38% 
? Rs 3,344 crore allocated towards subsidy on rice 
? Rs 900 crore allocated towards Bala Sanjeevani 
scheme 
Transport 6,105 8,035 7,192 8,055 12% 
? Rs 1,968 crore allocated towards capital outlay on 
roads and bridges. 
% of total 
expenditure on all 
sectors 
63% 68% 66% 68%   
   
 
 
 
 
 
 
 
 
   
 
Receipts in 2025-26 
? Total revenue receipts for 2025-26 are estimated to be Rs 2,17,977 crore, an increase of 24% over the 
revised estimate of 2024-25.  Of this, Rs 1,28,126 crore (59%) will be raised by the state through its own 
resources, and Rs 89,851 crore (41%) will come from the centre.  Resources from the centre will be in the 
form of state’s share in central taxes (26% of revenue receipts) and grants (15% of revenue receipts). 
? Devolution:  In 2025-26, the state’s share in central taxes is estimated at Rs 57,566 crore, an increase of 
11% over the revised estimate of 2024-25.     
? Grants from the centre in 2025-26 are estimated at Rs 32,284 crore, an increase of 47% over the revised 
estimates for 2024-25.  This is driven by an increase anticipated in grants for centrally sponsored schemes 
(CSS) such as MGNREGS and Pradhan Mantri Awas Yojana-Urban.  In 2024-25, grants from centre are 
expected to be 28% lower than the budget estimate, primarily due to a lower grant anticipated for CSS as 
compared to the initial budget estimate (Rs 7,738 crore lower). 
? State’s own tax revenue:  Andhra Pradesh’s total own tax revenue is estimated to be Rs 1,09,007 crore in 
2025-26, an increase of 15% over the revised estimate of 2024-25.  Own tax revenue as a percentage of 
GSDP is estimated at 6% in 2025-26, marginally higher than the revised estimates for 2024-25 (5.9%). 
As per the actual figures for 2023-24, own tax revenue as a percentage of GSDP was 6%. 
? State’s own non-tax revenue:  In 2025-26, own non-tax revenue is estimated at Rs 19,119 crore, an 
increase of 172% over the previous year.  The state has estimated to earn Rs 7,917 crore from 
miscellaneous general services in 2025-26, significantly higher than 2024-25 (Rs 226 crore).  Non-tax 
revenue from mining is estimated to increase from Rs 3,518 crore in 2024-25 to Rs 6,000 crore in 2025-26. 
Table 5: Break-up of the state government’s receipts (in Rs crore) 
Items 
2023-24 
Actuals 
2024-25 
Budgeted 
2024-25 
Revised 
% change from  
BE 2024-25 to 
RE 2024-25 
2025-26 
Budgeted 
% change from 
RE 2024-25 to 
BE 2025-26 
State's Own Tax 85,922 1,09,789 94,967 -14% 1,09,007 15% 
State's Own Non-Tax 7,432 10,576 7,018 -34% 19,119 172% 
Share in Central Taxes 45,711 50,475 52,080 3% 57,566 11% 
Grants-in-aid from Centre 34,702 30,334 21,966 -28% 32,284 47% 
Revenue Receipts 1,73,767 2,01,174 1,76,031 -12% 2,17,977 24% 
Non-debt Capital Receipts 24 12 25 104% 26 5% 
Net Receipts 1,73,791 2,01,186 1,76,056 -12.5% 2,18,002 24% 
Note: BE is Budget Estimates; RE is Revised Estimates.  
  
? In 2025-26, State GST is estimated to be the largest source of own tax revenue (37% share).  State 
GST revenue is estimated to increase by 12% over the revised estimates of 2024-25. 
? In 2025-26, revenue from stamp duty and registration fees is estimated to increase by 43% over the 
previous year.  As per revised estimates, in 2024-25, revenue from this source is estimated to be 32% 
lower than budgeted.  
? In 2025-26, revenue from certain taxes such as land revenue and taxes and duties on electricity are 
estimated to be significantly lower than the previous year.  In 2024-25, revenue from land is estimated 
to be significantly higher than the initial budget estimate.  Revenue from taxes and duties on electricity 
is expected to be moderately higher than the initial budget estimate. 
Table 6:  Major sources of state’s own-tax revenue (in Rs crore) 
Head 
2023-24 
Actuals 
2024-25 
Budgeted 
2024-25 
Revised 
% change from 
BE 2024-25 to 
RE 2024-25 
2025-26 
Budgeted 
% change from 
RE 2024-25 to 
BE 2025-26 
State GST 31,130 37,489 36,296 -3% 40,718 12% 
Sales Tax/ VAT 18,475 24,500 18,505 -24% 20,874 13% 
Stamps Duty and Registration Fees 9,542 13,500 9,200 -32% 13,150 43% 
Taxes on Vehicles 4,557 5,203 4,655 -11% 5,664 22% 
State Excise 15,998 25,597 21,300 -17% 27,097 27% 
Taxes and Duties on Electricity 5,528 2,648 3,008 14% 510 -83% 
Land Revenue 52 58 1,342 2225% 222 -83% 
GST Compensation Grants 0 164 164 0% - -100% 
 
Page 5


 
  
 
 
 
    
      
    
Andhra Pradesh Budget Analysis 
2025-26 
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)  
 
Note: These numbers are as per constant prices (2011-12) 
which implies that the growth rate is adjusted for inflation. 
  
-0.6%
24.9%
-9.2%
1.5%
10.6%
6.8%
10.8%
9.6%
4.0%
5.3%
9.0%
5.8%
2.0%
8.3%
5.2%
7.4%
-15%
-10%
-5%
0%
5%
10%
15%
20%
25%
30%
35%
Agriculture
Manufacturing
Services
GSDP
2020-21 2021-22 2022-23 2023-24
 
 
 
 
 
 
 
 
   
 
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. 
 
Expenditure in 2025-26 
? Revenue expenditure for 2025-26 is proposed to be 
Rs 2,51,163 crore, an increase of 12% over the 
revised estimate of 2024-25.  This includes 
expenditure on committed items such as salaries, 
pension and, interest and other items such as grants, 
and subsidies. 
? Capital outlay for 2025-26 is proposed to be Rs 
40,636 crore, an increase of 69% over the previous 
year.  Capital outlay indicates the expenditure 
towards creation of assets (excluding loans given by 
state).  Key sectors with a significant rise in capital 
outlay compared to the revised estimate for 2024-25 
include: (i) irrigation and flood control (Rs 6,991 
crore increase) and (ii) water supply and sanitation 
(Rs 1,855 crore increase), and rural development (Rs 
1,489 crore increase).  In 2024-25, capital outlay is estimated to be 26% lower than budgeted.  Sectors with 
a relatively higher decrease in 2024-25 include: (i) irrigation and flood control (Rs 5,884 crore lower than 
budgeted), and (ii) rural development (Rs 1,142 crore lower). 
? In 2025-26, loans and advances given by the state are expected to be Rs 6,131 crore, about six times the 
revised estimate of 2024-25.  This increase is driven by loans estimated for major irrigation (Rs 1,491 
crore) and urban development (Rs 1,945 crore).  As per revised estimates, no loans are estimated to be 
provided towards these accounts in 2024-25.  
Underspending in 2023-24 and 2024-25 as compared to 
budget estimates  
There has been significant underspending in the revised 
estimates of 2024-25 as compared to the budgeted 
estimates.  Net expenditure of the state is expected to be 
lower by 8% in 2024-25.  This is driven by underspending in 
sectors such as: (i) agriculture (51% underspending), (ii) 
irrigation and flood control (39% underspending), (iii) rural 
development (24% underspending) and (iv) welfare of SC, 
ST, OBC and minorities (19% underspending).  In 2023-24, 
net expenditure of the state was 9% lower than the budgeted 
estimates.  Sectors that have seen decrease in spending 
include: (i) irrigation and flood control, (ii) social welfare and 
nutrition, (iii) transport, and (iv) agriculture (see Annexure 2 
for details).   
 
 
 
 
 
 
 
 
   
 
Table 2:  Expenditure budget 2025-26 (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 
Revenue Expenditure 2,12,450 2,35,917 2,24,343 -5% 2,51,163 12% 
Capital Outlay 23,330 32,713 24,072 -26% 40,636 69% 
Loans given by the state 731 1,298 1,003 -23% 6,131 511% 
Net Expenditure 2,36,511 2,69,928 2,49,418 -8% 2,97,929 19% 
 
Committed expenditure: Committed expenditure of a state typically includes expenditure on payment of 
salaries, pension, and interest.  A larger proportion of the budget allocated for committed expenditure items 
limits the state’s flexibility to decide on other expenditure priorities, such as capital outlay.  In 2025-26, the state 
government has estimated to spend Rs 34,998 crore on interest payment, which is 16% of its revenue receipts.  
Rs 21,935 crore is estimated to be spent towards pension (10% of revenue receipts).  In 2023-24, the state spent: 
(i) Rs 36,872 crore on salaries (21% of revenue receipts), (ii) Rs 29,481 crore on interest payments (17% of 
revenue receipts) and (iii) Rs 21,696 crore on pensions (12% of revenue receipts).  In all, committed expenditure 
contributed 51% of the state’s revenue receipts in 2023-24.   
Table 3: Committed Expenditure in 2025-26 (in Rs crore) 
Committed 
Expenditure 
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 
Salaries 36,872 NA NA - NA - 
Pension 21,696 21,808 20,185 -7% 21,935 9% 
Interest payment 29,481 28,796 30,944 7% 34,998 13% 
 
Sector-wise expenditure: The sectors listed below account for 68% of the total expenditure on sectors by the 
state in 2025-26.  A comparison of Andhra Pradesh’s expenditure on key sectors with that by other states is 
shown in Annexure 1. 
Table 4: Sector-wise expenditure under Andhra Pradesh Budget 2025-26 (in Rs crore) 
Sectors 
2023-24 
Actuals 
2024-25 
BE 
2024-25 
RE 
2025-26 
BE 
% change from 
RE 24-25 to  
BE 25-26 
Budget Provisions (2025-26) 
Welfare of SC, ST, 
OBC, and Minorities 
36,185 47,277 38,475 52,047 35% 
? Rs 19,899 crore allocated towards NTR Bharosa 
pension scheme 
Education, Sports, 
Arts and Culture 
31,400 33,111 31,882 35,213 10% 
? Rs 20,492 crore allocated towards teaching grants 
? Rs 2,335 crore allocated towards Samagra Shiksha  
Health and Family 
Welfare 
15,106 18,732 17,202 19,589 14% 
? Rs 4,000 crore allocated for Dr Nandamuri Taraka 
Ramarao Vaidya Seva trust 
? Rs 1,385 crore allocated towards teaching hospitals  
Rural Development 14,147 15,899 12,073 18,140 50% ?  Rs 5,956 crore allocated towards rural employment 
Irrigation and Flood 
Control 
6,802 15,237 9,339 16,490 77% 
? Rs 6,705 crore allocated for Polavaram project 
? Rs 3,447 crore allocated for irrigation projects in 
Anantpur 
Agriculture and 
Allied Activities 
10,022 12,514 6,192 14,138 128% 
? Rs 6,300 crore allocated for Annadatta Sukhibhava 
scheme 
Energy 14,927 7,612 14,466 13,135 -9% 
? Rs 11,883 crore allocated towards power subsidy for 
agricultural and allied activities. 
Urban Development 8,633 11,168 12,604 11,625 -8% 
? Rs 6,000 crore allocated for Amaravati capital city 
development project 
Social Welfare and 
Nutrition 
5,957 11,899 14,700 9,071 -38% 
? Rs 3,344 crore allocated towards subsidy on rice 
? Rs 900 crore allocated towards Bala Sanjeevani 
scheme 
Transport 6,105 8,035 7,192 8,055 12% 
? Rs 1,968 crore allocated towards capital outlay on 
roads and bridges. 
% of total 
expenditure on all 
sectors 
63% 68% 66% 68%   
   
 
 
 
 
 
 
 
 
   
 
Receipts in 2025-26 
? Total revenue receipts for 2025-26 are estimated to be Rs 2,17,977 crore, an increase of 24% over the 
revised estimate of 2024-25.  Of this, Rs 1,28,126 crore (59%) will be raised by the state through its own 
resources, and Rs 89,851 crore (41%) will come from the centre.  Resources from the centre will be in the 
form of state’s share in central taxes (26% of revenue receipts) and grants (15% of revenue receipts). 
? Devolution:  In 2025-26, the state’s share in central taxes is estimated at Rs 57,566 crore, an increase of 
11% over the revised estimate of 2024-25.     
? Grants from the centre in 2025-26 are estimated at Rs 32,284 crore, an increase of 47% over the revised 
estimates for 2024-25.  This is driven by an increase anticipated in grants for centrally sponsored schemes 
(CSS) such as MGNREGS and Pradhan Mantri Awas Yojana-Urban.  In 2024-25, grants from centre are 
expected to be 28% lower than the budget estimate, primarily due to a lower grant anticipated for CSS as 
compared to the initial budget estimate (Rs 7,738 crore lower). 
? State’s own tax revenue:  Andhra Pradesh’s total own tax revenue is estimated to be Rs 1,09,007 crore in 
2025-26, an increase of 15% over the revised estimate of 2024-25.  Own tax revenue as a percentage of 
GSDP is estimated at 6% in 2025-26, marginally higher than the revised estimates for 2024-25 (5.9%). 
As per the actual figures for 2023-24, own tax revenue as a percentage of GSDP was 6%. 
? State’s own non-tax revenue:  In 2025-26, own non-tax revenue is estimated at Rs 19,119 crore, an 
increase of 172% over the previous year.  The state has estimated to earn Rs 7,917 crore from 
miscellaneous general services in 2025-26, significantly higher than 2024-25 (Rs 226 crore).  Non-tax 
revenue from mining is estimated to increase from Rs 3,518 crore in 2024-25 to Rs 6,000 crore in 2025-26. 
Table 5: Break-up of the state government’s receipts (in Rs crore) 
Items 
2023-24 
Actuals 
2024-25 
Budgeted 
2024-25 
Revised 
% change from  
BE 2024-25 to 
RE 2024-25 
2025-26 
Budgeted 
% change from 
RE 2024-25 to 
BE 2025-26 
State's Own Tax 85,922 1,09,789 94,967 -14% 1,09,007 15% 
State's Own Non-Tax 7,432 10,576 7,018 -34% 19,119 172% 
Share in Central Taxes 45,711 50,475 52,080 3% 57,566 11% 
Grants-in-aid from Centre 34,702 30,334 21,966 -28% 32,284 47% 
Revenue Receipts 1,73,767 2,01,174 1,76,031 -12% 2,17,977 24% 
Non-debt Capital Receipts 24 12 25 104% 26 5% 
Net Receipts 1,73,791 2,01,186 1,76,056 -12.5% 2,18,002 24% 
Note: BE is Budget Estimates; RE is Revised Estimates.  
  
? In 2025-26, State GST is estimated to be the largest source of own tax revenue (37% share).  State 
GST revenue is estimated to increase by 12% over the revised estimates of 2024-25. 
? In 2025-26, revenue from stamp duty and registration fees is estimated to increase by 43% over the 
previous year.  As per revised estimates, in 2024-25, revenue from this source is estimated to be 32% 
lower than budgeted.  
? In 2025-26, revenue from certain taxes such as land revenue and taxes and duties on electricity are 
estimated to be significantly lower than the previous year.  In 2024-25, revenue from land is estimated 
to be significantly higher than the initial budget estimate.  Revenue from taxes and duties on electricity 
is expected to be moderately higher than the initial budget estimate. 
Table 6:  Major sources of state’s own-tax revenue (in Rs crore) 
Head 
2023-24 
Actuals 
2024-25 
Budgeted 
2024-25 
Revised 
% change from 
BE 2024-25 to 
RE 2024-25 
2025-26 
Budgeted 
% change from 
RE 2024-25 to 
BE 2025-26 
State GST 31,130 37,489 36,296 -3% 40,718 12% 
Sales Tax/ VAT 18,475 24,500 18,505 -24% 20,874 13% 
Stamps Duty and Registration Fees 9,542 13,500 9,200 -32% 13,150 43% 
Taxes on Vehicles 4,557 5,203 4,655 -11% 5,664 22% 
State Excise 15,998 25,597 21,300 -17% 27,097 27% 
Taxes and Duties on Electricity 5,528 2,648 3,008 14% 510 -83% 
Land Revenue 52 58 1,342 2225% 222 -83% 
GST Compensation Grants 0 164 164 0% - -100% 
 
 
 
 
 
 
 
 
 
   
 
Deficits, Debt, and FRBM Targets for 2025-26 
The Andhra Pradesh Fiscal Responsibility and Budget Management Act, 2005 provides annual targets to 
progressively reduce the outstanding debt, revenue deficit and fiscal deficit of the state government. 
Revenue balance:  It is the difference of revenue expenditure and revenue receipts.  A revenue deficit implies that 
the government needs to borrow to finance those expenses which do not increase its assets or reduces its liabilities.  
The budget estimates a revenue deficit of Rs 33,186 crore in 2025-26 (1.8% of the GSDP).  In 2024-25, revenue 
deficit is estimated at 3% of GSDP, notably higher than the initial budget estimate (2.1% of GSDP).  This is driven 
by a shortfall estimated in revenue receipts as 
compared to the budget target (12% lower). 
Fiscal deficit:  It is the excess of total expenditure over 
total receipts.  This gap is filled by borrowings by the 
government and leads to an increase in total liabilities.  
In 2025-26, the fiscal deficit is estimated to be 4.4% of 
GSDP.  For 2025-26, the central government has 
permitted fiscal deficit of up to 3% of GSDP to states.  
Additional borrowing space up to 0.5% of GSDP will 
also be available for undertaking certain power sector 
reforms.  Further, the state government will receive 50-
year interest free loan from the central government for 
undertaking capital expenditure, which is over and 
above these limits. 
As per the revised estimates, in 2024-25, the fiscal 
deficit of Andhra Pradesh is expected to be 4.6% of 
GSDP.  This is higher than the budget estimate of 4.2% 
of GSDP.  This is driven by a shortfall in receipts as 
compared to the budget target (12% lower). 
Outstanding debt:  Outstanding debt is the accumulation of total borrowings at the end of a financial year.  At 
the end of 2025-26, the outstanding debt is estimated to be 35% of GSDP.  Outstanding debt had decreased to 
31.5% of GSDP in 2021-22 and has since increased.   
Outstanding Government Guarantees: Outstanding debt of states do not include a few other liabilities that are 
contingent in nature, which states may have to honour in certain cases.  State governments guarantee the 
borrowings of State Public Sector Enterprises (SPSEs) from financial institutions.  As of March 2024, the state’s 
outstanding guarantee is estimated to be Rs 1,54,797 crore (10.8% of GSDP). 
 
 
 
Figure 2: Revenue and Fiscal Deficit (% of GSDP)  
 
Note: RE is Revised Estimates; BE is budget estimates. 
 
   
Figure 3: Outstanding Debt (as % of GSDP)  
Note: RE is revised estimates; BE is budget estimates 
 
2.7%
3.6%
0.8%
3.3%
2.7%
3.0%
1.8%
4.1%
5.6%
2.2%
4.0%
4.4%
4.6%
4.4%
0%
1%
2%
3%
4%
5%
6%
7%
2019-20
2020-21
2021-22
2022-23
2023-24
2024-25 RE
2025-26 BE
Revenue Deficit Fiscal Deficit
31.0%
35.5%
31.5%
32.6%
35.0%
35.0%
35.0%
0%
10%
20%
30%
40%
50%
2019-20
2020-21
2021-22
2022-23
2023-24
2024-25 RE
2025-26 BE
Fiscal Health of Andhra Pradesh 
The fiscal health index published by NITI Aayog in 2025 
ranked Andhra Pradesh 17
th
 among the 18 states analysed, 
indicating high fiscal strain.  NITI Aayog (2025) observed that 
cumulative capital expenditure of the state on social and 
economic services had come down by 84% and 60% 
respectively between 2018-19 and 2022-23.  It noted that the 
state’s revenue was increasingly being locked in committed 
expenditure such as salaries, pensions, and interest 
payments.  Committed expenditure as a percentage of 
revenue receipts had increased from 58% of in 2018-19 to 
65% in 2022-23.  NITI Aayog (2025) also noted that the 
growth rate of state’s own revenue had come down from 
17% in 2018-19 to 10% in 2022-23.  It recommended that 
the state may focus on enhancing the efficiency of capital 
expenditure, optimise committed spending and diversify 
revenue sources for greater resilience.