As the centre is yet to move to keep up its commitment for reimbursement of revenue deficit, the Andhra Pradesh state government is facing severe financial crunch. The widening revenue deficit making the government difficult for payment of routine bills.

As a result, the finance department has issued oral instructions to the treasury to stop making payments for a variety of bills with immediate effect. All the district treasuries have reportedly stopped payments for development works since February 8, though no such specific instructions were issued.

The estimated revenue deficit for the financial year 2016-17 is around Rs. 4,868 crore. But in reality, officials are expecting it is bound to rise two fold, resulting Rs. 14,174 crore by the end of the fiscal. The government is waiting for the Centre to come to its rescue by giving nod to their plea for increasing FRBM limit to 4 per cent.

Though no formal orders were issued seeking to stop payment of bills and officials are routinely forwarding bills and cheques to banks for making payments, they informally advised the banks not to go ahead with payment.

It is a normal practice for the treasury to get such instructions during last or first week of every month whenever steep fall in revenues are noticed. Nowadays, almost every month both Telugu states are witnessing such situation. But, officials felt it seems to be an extraordinary situation to issue such instructions in the middle of a month.

The government is following restrictions on payment of bills only to meet its prime task of ensure timely payment of salaries and pensions. Officials confirming that they do not want to give scope for repeat of bitter experiences faced by pensioners in the immediate aftermath of the demonetisation of high value currency.

Officials stating that they will clear bills pertaining to office expenses and medical reimbursement after clearing salaries and pensions. However, the financial positions seems to be remain constrained till March-end.