With fiscal discipline at its core and innovation as its driver, Andhra Pradesh is emerging as a model for financial resilience and inclusive growth in India. Balancing development with governance, ambition with accountability, and welfare with prudence, the state is building a new paradigm of economic strength rooted in transparency, technology, and reform-driven policymaking. From achieving doubledigit growth and strengthening revenue systems with AI-powered analytics to pioneering end-to-end digital budgeting and expenditure tracking, Andhra Pradesh is setting new benchmarks in financial governance. Shri Peeyush Kumar, IAS, Principal Secretary, Finance Department, Government of Andhra Pradesh, shares his insights on how technology, fiscal discipline, and visionary planning are powering the state’s journey towards a prosperous, equitable, and future-ready economy, in an exclusive interaction with Elets News Network (ENN). Edited excerpts:
What strategies is the Finance Department, Government of Andhra Pradesh, implementing for sustaining the state’s strong growth trajectory?
The State of Andhra Pradesh has historically been endowed with abundant natural resources, a strategic location and enterprising people. Post-state bifurcation, the dominance of the primary sector in the state economy increased. The primary sector continues to be the mainstay of the state economy. Since 2024, the state economy has chalked out a very robust recovery and has achieved a growth rate of 12.02% in 2024-25. Our focus is to not only sustain the growth momentum, but also push it further to the aspiration target of 15%+. To achieve this objective, the government has developed the Swarna Andhra @ 2047 Vision with equal emphasis on development of primary, industry and services sectors of the economy.
Working in the direction of Swarna Andhra @ 2047, the government has already revamped the policy space. Many new policies like Sand Policy, Excise Policy, AP Industrial Development Policy 4.0, AP Electronics Manufacturing Policy 4.0, AP Information Technology (IT) & Global Capability Centers (GCC) Policy, AP Textile, Apparel and Garments Policy, the AP MSME & Entrepreneur Development Policy, 4.0 etc. have been rolled out.
At the same time, the government has chalked out a roadmap for the implementation of welfare schemes and is implementing them in a phased manner. The sustainability for growth is also coming from streamlining the Centrally Sponsored Schemes and other support from the Government of India for landmark projects like the Amaravati Capital City and Polavaram Irrigation Project.
Revenue mobilization is central to fiscal stability. What new measures is Andhra Pradesh pursuing to expand its tax base, improve GST compliance, and enhance non-tax revenues without burdening citizens or businesses?
Andhra Pradesh is implementing advanced technology solutions to widen its tax base without increasing tax rates. A central Data Lake is being developed to integrate data from all revenue-generating departments, supported by AIpowered analytics to detect tax evasion and unregistered entities. This system is expected to be operational within 2–3 months and will consolidate data from GSTN, Commercial Taxes, Transport, and Registrations for real-time monitoring. Additionally, government approvals such as building permits and trade licenses are being linked to mandatory GST registration, ensuring compliance in a seamless manner. These measures aim to bring more businesses into the formal tax network and improve transparency.
Andhra Pradesh has strengthened GST compliance through digitization and systemic reforms, resulting in sustained revenue growth. GST collections in Andhra Pradesh have shown steady improvement, with State GST (SGST) emerging as the largest contributor to own tax revenue, accounting for about 2.3% of the Gross State Domestic Product (GSDP) in 2024–25.
We are adopting AI and Data Analytics tools and integrated data systems to detect anomalies, fake ITC claims, and nonf ilers, as outlined in the FRBM Statement of Fiscal Policy.
Andhra Pradesh is also focusing on high-value resources and technology-driven reforms to boost non-tax revenues while ensuring that common citizens and small businesses are not adversely impacted. The strategy emphasizes taxing luxury and sin goods, optimizing underperforming sectors, and plugging revenue leakages rather than imposing new levies.
Corrective measures are being implemented in transport, mining, and forest revenues with an aim to improve compliance and efficiency rather than increase user charges.
The state has significantly increased its reliance on digital tools for budgeting and expenditure tracking. Could you elaborate on the specific innovations introduced by the Finance Department to strengthen transparency, reduce leakages, and ensure efficient utilization of funds?
The Finance Department has really stepped up its game with digital tools and good governance practices through IT to manage budgeting and spending. For us, it is no longer just about moving things online, but also about making the whole process clearer and making sure funds are utilized efficiently.
At the heart of this transformation is the Comprehensive Financial Management System (CFMS), which is the state’s go-to financial system. What is unique is how CFMS integrates all aspects of public finance management, like budgeting, expenditure, debt management, human resources, payment processing, and much more, into a single real-time digital platform. This integration has shown improved efficiency, transparency, and accountability by enabling seamless tracking of fund flows and resource mobilization. What is clever is how CFMS powers digital workflows for approvals, biometric-based officer authentications to ensure security, and employee self-service modules. It has been designed in a way that connects everyone involved, from the secretariat to district-level users. CFMS also works hand-in-hand with central government digital platforms.
We have also undertaken a WhatsApp governance initiative, a seamless integration of CFMS citizen services into WhatsApp for easy public access and faster response. In addition, we have introduced the NIDHI platform, a single platform that automates auditing for the entire State to process any works undertaken in its jurisdiction. This was developed comprehensively to enforce strict government rules digitally, automating all steps from administrative sanction to final bill payments, ensuring complete paperless transactions and accountability.
Andhra Pradesh’s experience demonstrates that technology, when implemented thoughtfully, can be a powerful enabler of good governance and efficient service delivery. The key lies in strong adoption and active participation from both citizens and government institutions, and that momentum is clearly visible.
Andhra Pradesh is pushing major investments in infrastructure, logistics, tourism, and renewable energy. How is the Finance Department aligning fiscal planning with these long-term capital-intensive projects while ensuring social sector spending is not compromised?
Andhra Pradesh’s development strategy is ambitious, with major investments underway in infrastructure, logistics, tourism, and renewable energy-sectors that are critical to the state’s long-term growth. At the same time, the government remains firmly committed to ensuring that social sector spending is not compromised. The Finance Department is aligning fiscal planning with these capital-intensive projects through a multi-pronged approach.
First, the state has adopted a Medium-Term Fiscal Strategy (MTFS) that aligns large-scale investments with predictable revenue streams. Projects are being financed in phases, leveraging public-private partnerships (PPP) and viability gap funding to minimize upfront fiscal pressure.
Second, to ensure that big-ticket infrastructure projects do not strain the consolidated fund, the government has established special purpose vehicles (SPVs) and state-level infrastructure funds. These mechanisms are complemented by innovative financing tools such as green bonds, multilateral agency support, and blended finance, particularly for renewable energy and logistics initiatives.
Third, Andhra Pradesh is securing long-term, low-interest loans from both domestic and international financial institutions. This strategy reduces the annual debt servicing burden and aligns repayment schedules with the long gestation periods of infrastructure assets. Instruments such as sovereign-backed infrastructure loans, development finance, and export credit agency support are being utilized to optimize the cost of capital.
Fourth, the government is safeguarding social sector spending by ring-fencing welfare allocations in the annual budget. Key programs in education, healthcare, and poverty alleviation remain fully funded. To enhance transparency and efficiency, real-time expenditure tracking is being implemented, while outcome-based budgeting ensures that every rupee delivers measurable social impact.
Finally, the government is taking proactive steps to add new assets to the state’s balance sheet, including industrial parks, logistics hubs, renewable energy parks, and tourism infrastructure. These assets are designed to generate longterm revenue streams, attract private investment, and create wealth that can be reinvested into welfare and development. This approach transforms capital expenditure into productive capital formation, ensuring fiscal sustainability and inclusive growth. This integrated fiscal strategy allows us to pursue transformative infrastructure while maintaining fiscal discipline and social equity. Andhra Pradesh is proving that growth and welfare can go hand in hand.
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