A major component of Andhra Pradesh’s expenditure is:

The correct answer is: c) Salaries and pensions.

Salaries and pensions are the largest component of Andhra Pradesh’s expenditure, accounting for 35% of the total budget in 2020-21. This is followed by interest payments (25%), subsidies (15%), and capital expenditure (15%).

The high share of salaries and pensions in Andhra Pradesh’s budget is due to the large number of government employees in the state. As of 2020, there were over 2 million government employees in Andhra Pradesh, which is more than the population of many countries. The high cost of salaries and pensions is a major challenge for the state government, as it puts a strain on the budget and limits the government’s ability to invest in other areas.

Interest payments are the second largest component of Andhra Pradesh’s expenditure. The state has a large debt burden, which has been increasing in recent years. In 2020-21, the state’s debt was over Rs. 2 lakh crore. The high interest payments on this debt are a major drain on the state’s resources.

Subsidies are the third largest component of Andhra Pradesh’s expenditure. The state government provides subsidies on a variety of goods and services, including food, fuel, and electricity. The cost of subsidies has been increasing in recent years, as the state government has expanded the scope of its subsidy programs.

Capital expenditure is the fourth largest component of Andhra Pradesh’s expenditure. The state government invests in a variety of capital projects, including infrastructure, education, and health. The cost of capital expenditure has been increasing in recent years, as the state government has sought to improve the quality of life for its citizens.

In conclusion, the largest component of Andhra Pradesh’s expenditure is salaries and pensions. This is followed by interest payments, subsidies, and capital expenditure. The high share of salaries and pensions in the state budget is a major challenge for the government, as it puts a strain on the budget and limits the government’s ability to invest in other areas.