Source : INDIA TODAY NEWS
Andhra Pradesh chief minister N. Chandrababu Naidu has presented the state’s progress report 2024-26, lamenting about two aspects: the 2014 bifurcation to create Telangana that, he says, left Andhra Pradesh revenue-strapped and the five-year governance of the Yuvajana Sramika Rythu Congress Party (YSRCP) (2019-24) that, according to him, was a period of widespread mis-governance and erosion of institutions to the extent that it “damaged Brand Andhra”.
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Naidu still bemoans the loss to Telangana of growth-engine Hyderabad, the IT-pharma powerhouse he helped develop in his previous chief ministerial terms. He even alleges that former chief minister and YSRCP supremo Jagan Mohan Reddy’s tenure destroyed Andhra Pradesh’s economy, including the stalling of Naidu’s Amaravati capital project.
But what came out startling in the two-hour-long presentation of the progress report, aka white paper on state finances, on August 4 was what Naidu described as a legacy problem. As per the report, Andhra Pradesh’s HR expenditure is a whopping 95 per cent of the state’s own revenue (SOR). In 2025-26, the state government has spent Rs 105,039 crore on salaries and other emoluments of its personnel.
In the same year, neighbouring Karnataka’s HR bill was just 28 per cent of its own revenues while in Telangana it was 44 per cent. Tamil Nadu and Kerala expenditures under the same head were 49 and 68 per cent respectively, stated Naidu.
Naidu said that during YSRCP rule, the HR expense was 110 per cent of SOR, up 23 per cent from the average 87 per cent maintained during his previous term from 2014 to 2019.
“The high HR expenditure has increased our fiscal burden,” the chief minister said, claiming that the steep increase during YSRCP regime was due to disproportionate government recruitment under Jagan Reddy. Officials point to the appointment of around 126,000 employees for Reddy’s famed village and ward secretariats.
In the last two fiscals, Naidu said, the average has been brought down to 96 per cent. “The high HR bill is the biggest challenge in government, and balancing it is important,” Naidu told top ministers and officials.
The Opposition YSRCP strongly refuted Naidu’s figures and statements, calling them “grossly incorrect and misrepresented”. “Even during the previous Naidu administration, the HR expenses were as high as 98 per cent of SOR in some years like 2017-18. The proportion was as high as 123 per cent in 2020-21 [under Jagan Reddy] as the revenues were severely impacted by the Covid-19 pandemic. And we had also implemented a 27 per cent interim relief for the employees,” said Duvvuri Krishna, a member of the YSRCP’s political advisory committee.
“As the economy recovered, by the time we handed over power in 2024, the proportion was already brought down to around 98 per cent—a figure Naidu claims to have achieved last year,” said Duvvuri, who was special secretary (finance) in Jagan Reddy’s chief minister’s office. “In these two years, Naidu has not released any dearness allowance, etc., benefits due to the staff, but claims to have brought down the HR expenditure.”
How does Andhra Pradesh fare vis a vis other states? Naidu said that in Karnataka, the state revenues went up while employees shrunk. Even Kerala, which has a strong employees/workers union culture, the HR expenditure is 68 per cent, said Naidu. “We have to give salaries to all employees. This is a legacy problem we are facing in Andhra Pradesh, and [we] should be mindful [dealing with it]. After bifurcation, more employees came to us while resources remained in Telangana,” said the chief minister.
The remarks come at a time when employee unions are pressing for resolution of their long-pending issues, such as pay revision and clearance of dues—arrears estimated to be in the tune of about Rs 50,000 crore.
Bopparaju Venkateswarlu, chairman of employees’ Andhra Pradesh Joint Action Committee Amaravati, has disputed Naidu’s claims about HR expenditure, saying that salaries and pensions accounted for only 59 per cent of SOR.
SOR is the income state governments generate directly through their own tax and non-tax sources, such as excise duty, stamp duty and registrations, interest receipts and mining royalties. It excludes central tax devolution and grants.
Peeyush Kumar, principal secretary, finance department, spoke to INDIA TODAY about the factors contributing to Andhra Pradesh’s steep HR bill. According to him, the state government pays salaries and pensions to an average 1.3 million people every month, amounting to Rs 1.05 lakh crore. This includes regular employees (67 per cent ), pensioners (25 per cent ), grants in aid employees, professionals, wage employees and contract/outsourcing staff. The government also pays salaries to employees of local bodies and some corporations, such as the road transport corporation.
In 2013-14, the HR expenditure of undivided Andhra Pradesh was Rs 43,276 crore, which was 54 per cent of SOR. Post-bifurcation, Andhra Pradesh inherited only about 46 per cent of resources of the undivided state but had to bear a population share of 58 per cent.
Kumar said the economy underwent a sea of structural changes almost overnight. The share of agriculture sector increased from 24 per cent in 2013-14 to 31 per cent in 2014-15 immediately after bifurcation. This further increased to 33 per cent in 2025-26.
On the other hand, since Hyderabad went to Telangana, the share of revenue-generating services sector, including IT, declined sharply from 51 per cent in 2013-14 to 44 per cent in 2014-15 immediately after the bifurcation, and further to 43 per cent in 2025-26. The post-bifurcation agrarian economy of Andhra Pradesh has a low resource base that cannot contribute significantly to the state’s revenues, Kumar explained.
The SOR/GSDP (Gross State Domestic Product) ratio for combined Andhra Pradesh in 2013-14 was 8.7 per cent. This dropped to 6 per cent in 2024-25 while in Telangana it was 8.7 per cent the same year.
According to Naidu, the disproportionate recruitment during the YSRCP regime added to the HR burden in the form of appointment of around 126,000 employees in Jagan Reddy’s famed village and ward secretariats and 250,000 youths engaged as gram/ward volunteers, which “tremendously increased the burden of salaries post 2019”.
However, Duvvuri termed the recruitment of ward village, secretariat staff and volunteers as Jagan Reddy’s revolutionary initiative as it had “eased local governance and allowed delivery of services at the doorstep”.
The 250,000 volunteers are not functional anymore. They used to be paid Rs 5,000 as honorarium per month.
Giving more reasons, principal secretary Kumar said the honorarium the Andhra Pradesh government pays to ASHA workers is Rs 10,000, which is highest among the states. The remuneration of Rs 11,500 to anganwadi workers is also amongst the highest in the country. Thus, all these reasons contributing, HR expenditure remains a very high proportion of Andhra Pradesh’s SOR.
However, employee union leaders cite 2025-26 CAG figures to state that salaries and pensions accounted for only 59.36 per cent of SOR and 47.64 per cent of the total revenue receipts. “The Telugu Desam Party-led NDA (National Democratic Alliance) came to power promising quick resolution of employee issues and clearance of dues. While the pending payments from YSRCP regime days are about Rs 28,000 crore, another over Rs 20,000 crore are estimated to have added in the two years of the present government,” said Venkateswarlu.
Engaged in rebuilding Andhra Pradesh and erecting a top-notch capital Amaravati, chief minister Naidu seems to have several other pressing issues too to immediately deal with. While the previous Naidu government had in 2014 enhanced the state government employees’ superannuation age to 60 from 58 years, Jagan Reddy in 2022 further raised it to 62.
This July, the Naidu government issued an order raising the superannuation age of employees of PSUs, corporations and societies too to 62 years. Experts say that decisions like these help the administration defer the payment of retirement benefits—an outflow that forms a substantial portion for the exchequer.
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SOURCE :- TIMES OF INDIA
