Andhra Pradesh Second Most Indebted Farm State with Rs 3.76 Lakh Crore Loans
16 Dec, 2025 15:55 IST|Sandeep Athreya
AP Government’s Welfare Claims Ring Hollow as Farm Debt Mounts, Power Sector Struggles
Despite repeated assurances by the Andhra Pradesh government that schemes such as Rythu Bharosa (a brainchild initiative of visionary leader and former CM YS Jagan) and Annadata Sukhibhava are easing the financial burden on farmers to an extent, official data tells a far more troubling story. Crop loans taken by farmers in the state have ballooned to a staggering Rs 3.76 lakh crore as of September 30 this year, exposing the widening gap between political claims and ground reality.
Andhra Pradesh Among India’s Most Indebted Farm States
In terms of agricultural debt, Andhra Pradesh now ranks second in the country, trailing only Tamil Nadu, which tops the list with farm loans amounting to Rs 4.94 lakh crore. The figures were revealed by Union Minister of State for Finance Pankaj Chaudhary in a written reply in the Lok Sabha, lending official weight to concerns long raised by farmer groups and opposition parties.
The data highlights the scale of dependence on institutional credit in Andhra Pradesh. Farmers in the state have borrowed Rs 2.89 lakh crore from commercial banks, Rs 33,739 crore from cooperative banks, and ₹53,603 crore from Regional Rural Banks (RRBs). Alarmingly, cooperative and rural banks have extended a larger volume of agricultural credit in Andhra Pradesh than in Tamil Nadu, indicating deeper distress among small and marginal farmers.
Welfare Schemes Fail to Reduce Debt Burden
The surge in farm loans raises serious questions about the effectiveness of the state government’s flagship welfare schemes. While the government continues to project Rythu Bharosa as a safety net for cultivators, the mounting debt suggests that financial assistance has failed to offset rising input costs, erratic weather, and falling farm incomes.
Adding to farmers’ anxiety, the Union government has made it clear that no proposal for a nationwide farm loan waiver is currently under consideration. This leaves indebted farmers in Andhra Pradesh with little relief, even as liabilities continue to pile up.
Power Sector Crisis Adds to Economic Stress
The financial strain is not limited to agriculture alone. Andhra Pradesh’s power sector is grappling with its own crisis, with the state’s power distribution companies (DISCOMs) saddled with outstanding liabilities of ₹77,600 crore as of the 2024–25 financial year.
DISCOMs in the state are reportedly clearing electricity purchase bills with an average delay of 105 days, reflecting persistent cash flow issues. While Andhra Pradesh fares better than some states—Delhi leads the list with delays of 389 days, followed by Jharkhand (384 days) and Telangana (295 days)—the comparison offers little comfort.
Governance Under Scanner
In sharp contrast, Gujarat’s DISCOMs have been cited as a benchmark for efficiency, settling dues within just four days. The disparity underscores structural weaknesses in Andhra Pradesh’s financial and administrative management.
Taken together, the soaring farm debt and mounting power sector liabilities paint a grim picture of the state’s economic health. As the government continues to highlight welfare spending, critics argue that without meaningful reforms, fiscal discipline, and income-enhancing measures, Andhra Pradesh risks pushing its farmers and public utilities deeper into a debt trap.
For many in the state, the numbers released in Parliament have reinforced a growing perception: grand welfare narratives may win headlines, but they have done little to arrest the economic distress unfolding on the ground.
