In February 2025, Payyavula Keshav, the Minister for Finance for the Andhra Pradesh (AP) state government, presented the Annual budget of AP for the Financial Year 2025-26 (FY 26) with a total outlay of Rs 3,22,359 crore. The budget allocations include a Revenue Expenditure of Rs 2,51,162 crore and a Capital Expenditure of Rs 40,635 crore.
- The budget outlay of FY26 is about 9.48% higher than the previous year. The budget size for FY25 was Rs. 2,94,427 crore.
- The budget proposes to spend Rs 47,456 crore for the Backward Classes’ (BC) welfare, while school education gets an allocation of Rs 31,805 crore for 2025-26.
Financial Indicators:
i.The estimated revenue deficit is around Rs. 33,185 crore, which constitutes 1.82% of the Gross State Domestic Product (GSDP) and the fiscal deficit is around Rs 79,926 crore, accounting for 4.38% of the GSDP.
ii.The revised estimate for revenue expenditure for FY25 is Rs.2,24,342 crore, and for capital expenditure is Rs.24,072 crore.
iii.The revenue deficit for FY25 is around Rs.48,311 crore, whereas the Fiscal Deficit(FD) is around Rs.73,362 crore. The revenue deficit is 3.01% and fiscal deficit is 4.57% of GSDP.
Key Allocations:
I.The government incorporated 2 major electoral promises under Super Six:
i.Talliki Vandanam Scheme: Rs 9,407 crore was allocated for this welfare scheme which will provide financial assistance of Rs 15,000 per annum to selected students (from Class I to XII) who belong to financially unstable families in AP.
ii.AP Annadata Sukhibhava: Rs 6,300 crore was allocated for a welfare scheme providing a financial assistance of Rs 20,000 per year to all farmers.
- Of this, Rs 14,000 will be provided by the state government, and the remaining Rs 6,000 will be provided under the Central Sector Scheme (CSS) Pradhan Mantri KIsan SAmman Nidhi (PM-KISAN).
- Rs.6000 per annum per family will be payable in 3 equal installments, every 4 months.
II.Health:
i.The Budget proposes to allocate Rs 19,264 crore for the Health, Medical, and Family Welfare Department for FY26, accounting for 5.98% of the total budget.
ii.It includes Rs 16,558.97 crore for revenue and Rs 2,705.96 crore for capital expenditure.
- A Rs 25 lakh health insurance scheme for all residents was also announced, which is set to launch in the next financial year.
III.Agriculture:
i.A separate budget of Rs 48,341.14 crore was presented by AP Agriculture Minister Kinjarapu Atchannaidu for agriculture, with the highest allocation of Rs 12,903.41 crore for the maintenance of irrigation projects.
- Rs 29,655 crore was allocated for Sustainable Agriculture & Drought Free State.
- Rs 12,773.25 crore was allocated for a 9-hour free power supply to agricultural consumers
- Rs 12,401.58 crore for implementing various farmers’ welfare and development programs.
ii.As per the GSDP’s First Advance Estimates (FAE), the Gross Value Added (GVA) for agriculture at current prices was estimated as Rs 57,187 crore with a growth rate of 22.86%.
IV.Water Resource Management:
A total of Rs 11,314 crore has been allocated for water resource management.
- Polavaram Irrigation Project was allocated Rs 6,705 crore, and Amaravati Project was allocated Rs 6,000 crore to restart the capital city project.
- The financial relief for the fishermen’s families during the fishing ban period has increased to Rs 20,000 from Rs 10,000.
V.Major Infrastructure and Development Projects:
i.Viability Gap Funding (VGF) Scheme: A corpus of Rs 2,000 crore dedicated to Public-Private Partnership (PPP) projects.
ii.Jal Jeevan Mission (JJM): Allocated Rs 2,800 crore for clean drinking water initiatives and Rs 13,487 crore for Agriculture & Allied sectors.
iii.Rs 10 crore was allocated for the development of Telugu Language.
iv.Rs 31,805 crore was allocated for school education with Rs 2506 crore for higher education.
v.The AP state government would also provide free electricity to over 44,000 government schools.
vi.The AP government also increased the allocation for minorities’ welfare to Rs 5,434 crore from Rs 4,376 crore and the allocation for women and child welfare also increased to Rs 4,332 crore from Rs 4,285 crore.
vii.Other allocations include:
- Rs 1,228 crore for the Skill Development (SD) Department;
- Rs 18,847 crore for the Panchayat Raj and Rural Development (PR & RD) Department;
- Rs 13,862 crore for the Municipal Administration and Urban Development (MA&UD) Department;
- Rs13,487 crore for Agriculture & Allied sectors.
viii.Rs 27,518 crore has been allocated for the NTR Bharosa Pension (NBP) scheme, which is already under implementation
ix.Rs 1,000 crore was allocated for relaunching the ‘Adarana’ scheme which had supported artisans, craftsmen, and other traditional occupations. This scheme would provide improved modern toolkits and gadgets to ensure sustainable income by improving productivity,
VI.Economic Growth:
i.The economy of AP is recovering and targeting a growth rate of 15% + annually, as part of the Swarna Andhra@2047, a 10 guiding principles aimed at making AP a wealthy, healthy, sustainable, and happy state.
ii.According to the FAE for 2024-25, the GSDP grew by 12.94%. Sector-wise growth rates include:
- Agriculture & Allied Activities: 15.86%
- Industries: 6.71%
- Services: 11.70%
About Andhra Pradesh(AP):
Chief Minister (CM)- Nara Chandrababu Naidu
Governor– Justice (Retd.) S. Abdul Nazeer
Airports– Visakhapatnam International Airport, and Vijayawada International Airport
Bird Sanctuaries– Atapaka/Kolleru Bird Sanctuary, and Pulicat Bird Sanctuary
