The huge cut in salaries and allowances of state government employees in Andhra Pradesh led to speculations that Chief Minister YS Jaganmohan Reddy has imposed ‘financial emergency’ on his own before the Central government acts on this issue.

Normally, the central government has the power to impose ‘financial emergency’ in the country or any state, if the financial situation goes out of control under Article 360 of the Constitution. The first step that the Centre takes after imposing financial emergency is that it cuts the salaries and allowance of government employees to bring down expenditure.

After Jagan became CM of AP in May 2019, the financial condition of AP turned from bad to worse. With an eye of ‘vote bank politics’ Jagan resorted to cash dole out schemes in the name of “Navaratnalu” with focussing on development of state and without improving revenue earnings of the state through job creation, new industries and other projects.

The finances of AP have dried up completely under the Jagan regime which is now struggling to pay even salaries and pensions for employees.

Jagan recently announced new PRC scales for government employees with 23% fitment. This should lead to an increase in basic pay by 23 per cent. But the salaries of employees came down over previous PRC scales as Jagan imposed drastic cuts in HRA and other allowances of employees.

Jagans cuts led to state government employees losing Rs 750 crore per year.

This gave clear indications that Jagan imposed financial emergency on his own and cut salaries of employees after realising that Centre is bound to impose financial emergency in AP due to financial crisis.