Andhra Pradesh State government facing severe financial crisis and struggling to cope with Rs 29,000 crore financial problem. Imposes restrictions on expenditure.
Hyderabad: The cash strapped Andhra Pradesh State is battling to cope up with severe financial crisis estimated to the tune of Rs 29,000 crore by the current financial year.
According to State Finance Department Officials, the only way out for the State government to get out the current crisis is, either the Central government should come to its rescue, or impose severe restrictions on its expenditure. But, the government is not able to resort to such a move as it has to spend a lot due to the failed agriculture season and nearly 196 mandals in nine out of thirteen districts are reeling under drought conditions. Also, the recent cyclonic storm has added to its woes to take up disaster management works.
According to the State government estimates, post bifurcation the government has inherited about 14,409 crore revenue deficit. The Center has to fill this revenue deficit as per the Andhra Pradesh Re-organization Act. But, out of this, so far, the Center has given only 2,300 crore. This leaves the State to cope up with an inherent revenue deficit to the tune of Rs 12,109 crore.
In addition to the above, revenue deficit during the current financial year is stood at Rs 7,000 crore. And, on the top of it the government needed about Rs 10,000 crore to meet its budgetary allocated commitments during the current fiscal. This makes that on account of revenue deficit alone the government has to cope with Rs 19, 109 crore during the current financial year. Besides, as it needed a minimum of Rs 10, 000 crore to meet the current fiscals planned expenditure, the State government will have to manage a whopping financial burden of around Rs 29, 109 crore, the sources said.
However, as of today, the government has nearly exhausted all its sources to tide-over the financial situation. For, it has already availed twice over draft facility from the Reserve Bank of India. Out of a total of Rs 17,000 loan facility that it could avail, it has already borrowed Rs 10,000 crore, and left with the capacity to borrow only another Rs 7,000 crore.
And, out of the total targeted internal revenue generation from all sources, the government has already collected 90 per cent from taxes, cess and others. With still four months left to run the show during the current financial year, the government is looking into every possible avenue to mobilize the revenues on its own, besides making a strong appeal to the Centre to release the funds pending as per the Andhra Pradesh Re-organization Act.
Admitting the financial situation is grim; the State Finance Minister Yenamala Ramakrishnudu said that even after getting the 14th Finance Commission Funds, the gap could not be filled. Following this, the government has decided to impose restrictions on payments from the government treasury, except salaries, pensions and other emergency expenditures.
