AP in deep financial stress!

It is already known that the Andhra Pradesh government is in a deep financial crunch, with the lack of proper funds for anything, and crores of rupees brought in as loans, which the government is unable to clear right now. Whenever a loan amount is taken from any bank, this loan amount should be repaid within the stipulated period of time, otherwise, there would be a huge loss to the recipient, with regards to the entire amount they are to receive. This policy is for everyone, including any government, and not just the common man.

This is the exact situation that the AP government now finds itself in. On Tuesday, the AP government offered huge interests to securities, something that no other state has done previously. Through this, the state has been able to generate Rs. 2,000 Crores. On Thursday, the state government got Rs. 1470 Crores from the Central government, under revenue deficit. Put together, the state government received a total income of Rs. 3470 Crores, through which it thought that it would be able to pay off this month’s government employees salaries, and retired employees’ pensions.

However, this is where the state government is now facing a problem, given that it has an Overdraft (OD) left to pay, to the RBI. The RBI is said to have pocketed this Rs. 3470 Crores, and even after this, the government would still have to pay Rs. 800 Crores, as part of the OD. With this, the AP government is now left with the big task of figuring out how to manage employees and pensions. Given that it’s the 9th today, already, salaries and pensions have already been delayed. While pensions have started to be deposited from last night, that’s not the case with salaries. The AP government can take an additional loan for paying salaries and pensions, but it would have to pay back this amount in a short period of time, which would once again turn out to be an additional financial burden for the government. It is now to be seen what the AP government will do.