Home / News / India /  Fund-starved Andhra Pradesh govt explores casinos off Vizag coast

NEW DELHI: The Y.S. Jagan Mohan Reddy-led Andhra Pradesh government is exploring the feasibility of floating casinos within Indian territorial waters off the Visakhapatnam coast to raise resources, and has reached out to the Centre for the same, said two people aware of the development.

Facing the goods and services tax (GST) revenue gap amid dwindling fund transfers from the Centre against the backdrop of the economic derailment caused by the coronavirus pandemic, the state government is looking to promote tourism through these floating casinos, on the lines of what Goa has done on the Mandovi river.

The territorial waters extend up to 12 nautical miles from the coast. Andhra Pradesh has around 975 km coastline, which is part of the Coromandel coast.

This comes in the backdrop of the fund-starved state exploring the feasibility of raising resources through the lottery business, Mint reported earlier. While only 13 states in India run legal lotteries; states such as Sikkim and Goa have allowed gambling.

Queries emailed to the Andhra Pradesh chief minister’s office and the union home ministry spokesperson on 30 September remained unanswered till press time.

“The state needs revenue and has reached out to the Centre for these floating casinos off the Visakhapatnam coast," said a government official, one of the people mentioned above, requesting anonymity.

In July last year, the Andhra Pradesh government released a white paper accusing the previous state government of mis-governance, financial mismanagement, and neglect of investment in human and physical capital. The revenue surplus, which was nearly 1% of gross state domestic product in 2006-07, declined to 0.24 % in the subsequent years, the white paper pointed out.

“The state doesn’t have any resources, hence this initiative," said the first person cited above.

There are limited avenues for states to raise taxes after the introduction of the GST in 2017. With Andhra Pradesh’s outstanding liabilities to the tune of Rs3.62 trillion, the Y.S. Jaganmohan Reddy government is looking at options beyond raising taxes on fuels, liquor and tobacco; to offset drastic revenue shortfalls because of the coronavirus lockdown. The state government raised alcohol prices by around 75% during the lockdown, to offset drastic revenue shortfalls because of the coronavirus lockdown.

“Offshore casino is being explored for some time now. Andhra Pradesh needs revenue and has a huge coastline that can be leveraged for promoting tourism," said a second person cited above who also did not want to be named.

The Andhra Pradesh government has been exploring financial solutions to shore up revenues. A case in point is a plan to transfer the assets of state power generation companies (gencos) and distribution companies (discoms) to the Andhra Pradesh Power Finance Corp. Ltd to raise funds at competitive rates, which may also help clear its power sector dues, Mint reported on 16 January.

The tax collections of states took a hit during the prolonged lockdown and the Centre’s GST revenues too collapsed, resulting in a double whammy for the states. The Central and state governments collected Rs95,480 crore in GST revenue in September, indicating that receipts from the tax on consumption was stabilizing.

However, concerns regarding economic recovery remain as India’s covid-19 death toll crossed the one lakh mark and positive cases surged past 64 lakh on Friday, health ministry data showed.

Utpal Bhaskar
"Utpal Bhaskar leads Mint's policy and economy coverage. He is part of Mint’s launch team, which he joined as a staff writer in 2006. Widely cited by authors and think-tanks, he has reported extensively on the intersection of India’s policy, polity and corporate space.
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