The Centre on Thursday dealt a blow to Andhra Pradesh government by reducing its loan limit for this year.
The Jagan government is depending entirely on loans to fund its Navaratnalu cash transfer schemes, development programmes and even to pay salaries for state government employees.
It was found that Jagan government obtained loans over and above the permissible limits during the past two years.
This year, AP government sought Centre’s permission to take Rs 42,000 crore loans. The Centre had approved Rs 37,000 crore loans.
After it was found that, Jagan government crossed loan limit in the last two years, it has now deducted excess loans and cut down AP loan limit to Rs 27,000 crore this year.
Jagan government is now tensed over how to run the show with just Rs 27,000 crore loans this year at a time when AP government earnings took a drastic hit due to Covid and subsequent lockdown since April/May.
