Hyderabad: Andhra Pradesh spent more than 95 percent of its own revenue in the last financial year on salaries and pensions. In rupee terms, a whopping Rs 1,05,039 crore was spent on human resource-related expenditure in FY26, according to the State Finance Department Progress Report presented Tuesday by Chief Minister N Chandrababu Naidu.
Andhra employs between 10-12 lakh people directly and indirectly in the state public sector undertakings, corporations, and secretariats at state, district, village, and ward levels. In addition, the state supports about 3.59 lakh pensioners, according to official data. In contrast, other southern states spend far less on paying its staffers: Karnataka under a third of its state own revenue (SOR) on salaries, Telangana about 44 percent of SOR, Tamil Nadu 49 percent, and Kerala 68 percent of its revenue. on paying its staffers.
Making a presentation on the state’s progress in the last couple of years since the Telugu Desam-led NDA government assumed office in 2024, the chief minister states high HR expenditure increased the state’s fiscal burden. Explaining that the soaring HR budgets were on account of a “legacy problem”, Naidu admitted that the state’s inability to “fix this” overnight since the state must guarantee salary payments to its workforce. Blaming the previous Jagan Mohan Reddy-led YSR Congress Party dispensation, CM Naidu said, “This over-allocation is a primary example of what happens under a government lacking financial accountability. It severely choked the state’s fiscal room for other vital allocations and capital expenditures,” he explained to a room full of ministers and bureaucrats at Andhra Pradesh’s secretariat in Amaravati. To put this in perspective, at the time of the state’s bifurcation in 2014, Andhra’s HR spend was 66 percent of its revenue, and in FY15, the state spent Rs 25,094 crore in salaries.This rose to 116 percent during FY20, after the YSRCP government came to power in 2019, and by FY24, Andhra was paying Rs 92,147 crore to its employees, the report—dubbed White Paper on the State’s Finances—reveals.Highlighting the “corrective actions” taken over the past two years, Naidu said the current NDA government successfully managed to bring this cost down by 13 percent to 14 percent, reducing the current figure to roughly 95 percent of SOR. “To remedy the situation, we cleared the unpaid liabilities and released pending dues of Rs 30,849 crore of gratuities, CPS (contributory pension scheme) contribution, provident fund, APGLI schemes (Andhra Pradesh Government Life Insurance), and medical reimbursement,” CM Naidu said. Although the finance minister and finance secretary of Andhra Pradesh were not available for comment, the rising salary bills could also be on account of successive governments raising the retirement age of government employees. Thus far, Andhra Pradesh raised the retirement age from 58 in 2014 to 62 in 2026, stating that it did not have adequate funds to settle the retiring employees’ dues.
