Andhra Pradesh government has claimed a 30% drop in its revenues due to the Demonetization as people were resorting to careful spending as they did not have money in hand following the note ban. The central revenues have also dropped meaning that it will lead to a decrease in the devolution of revenue to the State.
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The economic activity across the country came to a standstill after November 8th but then the states with deficit budgets like Andhra Pradesh which will suffer the most. The state government is hoping that the center will somehow reimburse these losses to the states.
The Cash Crunch is expected to go on for 2 months more and so there will be no respite immediately. On the other side, the state had harbored high hopes on the implementation of Goods and Services Tax (GST) which might help increase the Government income.
