The Andhra Pradesh government has almost entirely been depending on loans and debts to run the show, due to the lack of proper revenue in the state, and due to the several welfare schemes introduced by the YSRCP government.
The AP government requested the Centre for a loan of Rs. 42,000 Crores this year, with the help of which the government planned to execute its Navaratnalu cash transfer schemes, development programmes and even to pay salaries for state government employees. However, the Centre approved of only Rs. 37,000 Crores as loan.
After it was found out that the AP government went way beyond its permissible amount of loans in the last two years, the Centre further reduced the AP government’s loan amount to Rs. 27,000 Crores this year. This has now become a major problem for the AP government, which is said to be wondering how it would be able to run the show with such a low amount considering that its revenues aren’t as good either.