The AP government is stuck in an early financial crisis because of its new policies and past liabilities. The government is now unable to make bill payments even towards services given by private parties at its offices. The dues are not being cleared for car owners, drivers and canteen owners engaged on contract basis in government offices all over the state. As of now, only government employees’ salaries and pensions are being paid.

Multiple blows to AP economy have forced the finance department to take drastic steps. Senior officials have passed instructions to the Pay and Accounts Offices in the districts not to make payments on bills towards services rendered by contractors and individuals for the time being. This kind of a deep crisis usually arises for any state government at the beginning of the year because of pending bills. But AP already started feeling its pinch.

The immediate factor behind this is the unexpected, sudden drop in overall state revenue because of Jagan Regime’s only-welfare agenda. This caused anti-industry and anti-real estate sentiment which had an impact on revenue collections. Far less revenue than expected has left even IAS officers with no clues on how to overcome it. Very unfortunately, even Rs. 3,000 Crore monthly loans taken from banks is sufficient only to pay salaries and pensions.