In the last four months the Andhra Pradesh government has been crediting salaries to employees in instalments and payments of September month will be the same too. This is mainly due to the financial crisis and in recent times, AP financial status has made it to the headlines even though the YCP government is claiming that all is well.
For salaries and pension to government and retired employees, AP government needs Rs 5,500 crore and another Rs 1500 crore towards pension for disabled people. Apart from this, the state government has to pay Rs 4,000 crore as interest for the debts made. The total makes up to Rs 11,000 crore and the government has to keep this amount ready by the end of every month but that’s not happening.
On Tuesday, the AP government approached the Reserve Bank of India for the sale of security bonds. Initially the AP government had estimated to gather Rs 2000 crore but the RBI has returned the proposals of the state government citing Fiscal Responsibility and Budget Management (FRBM) limitations. But then AP government yet again knocked the RBI and managed to Rs 1000 crore but this amount is insufficient for the salaries.
Accordingly the AP government is considering the option of OverDraft (OD) and a decision on this will be taken on Wednesday by the state’s finance ministry. On the other hand AP Finance Minister Bugganna met Union Finance Minister Nirmala Sitharaman. He placed many requests before Sitharaman but the Centre has complete knowledge of AP government’s financial mismanagement.
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