‘Stop Reckless Borrowing’, Whom Did Modi Warn?

Prime Minister Narendra Modi warned states not to borrow recklessly as it would lead to huge debt burdens and they would reel under economic crisis like India’s neighbouring countries. Andhra Pradesh Chief Minister Y.S. Jagan Mohan Reddy should heed to the advice of the PM, suggested political analysts.

The YCP government is borrowing heavily for the implementation of several welfare programmes introduced in the name of Navaratnalu.

Modi was speaking in the Rajya Sabha and referring to the Old Pension Scheme, he said that it would ruin the future of the country’s children. The Centre says that the OPS is a recipe for economic disaster. In an apparent warning to the states that have reverted to the OPS, he said that if the government borrowed indiscriminately thinking that the debt burden would be borne by the next generations, then our country would get ruined like those in the neighbourhood. He suggested that the states should have some economic discipline and stop looking for political gains, at the cost of future generations.

Earlier this week, the finance ministry said that five states, including Rajasthan, Chhattisgarh, Jharkhand, Punjab, and Himachal Pradesh, had announced that they would go back to the OPS. The Centre had repeatedly warned states of financial disaster if the states reverted to the OPS.

“We might enjoy our lives with the money but the future of our children would be ruined,” Modi said.

Similarly, the YCP government is implementing several welfare programmes, for its political benefits. The state government has borrowed heavily in the last three years for the same, as it is just focused on spending the revenue rather than its generation. At present, the total debt burden on AP is above Rs 4 lakh crore. Unmindful of the ways to repay the loan, the YCP government is still trying to get debts.

Since bifurcation, Andhra Pradesh had been reeling under economic crisis and it has been getting compounded with fresh borrowings. The YCP government is only thinking of borrowing but not repaying and it will have a debilitating effect on the future generations, pointed out economic experts.

Under the OPS, employees with 20 year of service got 50 per cent of their last drawn salary as pension. The governments do not have any funding plan or corpus for the OPS and this only
increased the liability on the states. For this reason, the Centre has been advising states not to implement the OPS. However, states where the non-BJP parties are in the ruling began campaigning for it and a few even have begun implementing it.

As part of vendetta politics, the YCP government is hell bent on taking loans not just to implement the various welfare schemes but also to result in an economic crisis as it would become very hard for the TDP to administer the state even If it comes to power in 2024, said a TDP leader.

Further, the YCP government is also keen on the three-capital issue which cannot be a reality given the poor financial condition of the state. A lot of public funds are being wasted on government advisors and court cases too, said a Jana Sena leader.

It would be better if the YCP government pays heed to Modi’s advice and stops from going for unnecessary expenditure which would have an adverse impact on the future generations.