Cash crunched AP doing all it can?
news Friday, February 06, 2015 - 05:30
The News Minute | February 6, 2015 | 10:40 am IST The state of Andhra Pradesh which is in a state of serious financial crisis, seems to be going all out - in an attempt to gather funds. The state which sent an SOS to the Centre stating that it did not have funds to even pay salaries to its employees for the month of January also wrote a letter to the Union finance ministry requesting an immediate release of Rs 2,500 crore so as to pay the salaries for the 5.67 lakh employees on its payroll. The Centre however announced only Rs 850 crore in the financial package, along with some smaller packages for each district. The TDP led government in a bid to fill up its empty coffers, hiked fuel prices in the state late on Thursday night by Rs 4 per litre each of petrol and diesel. Reports suggest that a proposal by AP distribution companies of a six per cent hike on existing power tariff for middle, upper classes as well as industrial and commercial consumers, is being considered as it would mean, earning an extra Rs1,261 crore. Chief Minister N Chandrababu also announced on January 27 that the state had stopped all development works. The AP government has reportedly also written to the Telangana government to pay Rs 500 crore as its share towards loan repayment to the Centre. United Andhra Pradesh had borrowed close to Rs 19,000 crore till the end of March 2014 from the Centre. Post bifurcation, this repayment has to be shared by Andhra Pradesh and Telangana in the ratio of 58:42 - according to the AP Reorganization Act. Read - Why Andhra Pradesh is cash strapped and stopped all development works The TDP government which is in a severe financial crisis also cross checked their financial history and found that the Tamil Nadu government had to pay Rs 500 crore to the AP government for supplying 5 TMC Krishna waters to Chennai for drinking purpose through the Telugu Ganga Project and wrote to the Tamil Nadu government to clear the dues. The opposition parties have come down heavily on the TDP for the situation with the YSR Congress Party asking for the expenditure list for all of chief minister Chandrababu Naidu's foreign trips including the recent visit to the economic world forum, which was taken from the state exchequer. With no sign of any allocation so far and unexpected additional expenditure in the wake of the cyclone Hudhud, the current scenario is grim. The construction of a new capital and various ambitious development plans looming ahead, AP needs to gather funds fast if it expects to get out of the financial crunch. Tweet Follow @thenewsminute