The Modi Government at the Centre is tightening the noose around the Jaganmohan Reddy Government’s neck in Andhra Pradesh on the issue of Polavaram project. As per latest indications, the Union Finance Ministry is giving another twist to the delay in release of Central funds for the project. It is asking the State Government to present the bills for different works already executed at the project site. Reports say that the Centre has decided to release funds to AP only when it is clarified that the funds meant for Polavaram are spent for its works only.

The latest decision of the Centre came amid reports of gross diversion of Polavaram funds for other prestigious schemes of the YCP. It is well known AP is not giving funds to welfare corporations and using those funds to implement his Cash Transfer welfare schemes under ‘Navaratnalu’. There are rumours that some funds under Polavaram were also diverted for this in the past. As a result, the bill payments to Polavaram contractors were kept pending.

The allegations on funds diversions came as a big opportunity to the Centre now to use its pressure tactics to corner the Jagan Reddy regime now. By doing so, the Centre wants to make AP fall in line with the Union Finance Ministry’s argument that only Rs. 20,398 Cr Central funding would be there for Polavaram as per 2014 price level. Jagan Reddy has written a letter to the PM seeking total Rs. 55,000 Cr support.

On its part, the Union Jal Shakti Ministry has decided to make it clear to AP in the next meeting of Polavaram Project Authority that from now on, funds would be released only after checking whether bills submitted by AP were relating to Polavaram works or not. If AP does not cooperate, the Centre may not release Rs. 2,234 Cr towards already completed works and another Rs. 7,053 Cr funds to be given as per 2013-`14 estimates.