The financial situation of Andhra Pradesh is in deepest crisis. It is not in a position to make payments of any sort. This is why it is unable to give Letters of Credit to the solar companies towards power supply dues. At such a time, the Centre ordered AP to issue LoCs failing which the state will be blocked from buying power in the Electricity Exchange. Pushed to a corner, AP Government has challenged the Centre’s order in the High Court. It narrated about its weak financial position. The court gave stay orders for three weeks.

The differences between AP and the Centre are increasing day by day. CM Jagan’s adamant attitude towards solar companies is making the Centre take a tougher stand against AP. The power department officials are worried that the Centre may take a final hardline against AP. In such a situation, all cooperation will be stopped and AP will face acute power shortage and also supply cuts continuously. Chief Secretary LV Subrahmanyam tried to resolve the crisis by asking respective departments to pay dues to solar companies but there’s no money available. No bank is coming forward to give new loans thanks to anti-development tag of Jagan Circar.