The AP government and the State Bank of India have thus far been in an agreement, where the AP government would borrow funds from the SBI, and use it for the government’s various purposes. The SBI has now given a major shock to the AP government, by denying to lend the AP government a sum of Rs. 6500 Crores as an overdraft. With this, the AP government has now fallen into major confusion, as it has to get grants that match the CSS schemes.
On the other hand, the financial position of the AP government is worsening by the day, with no assets that could bring the government any substantial financial income, and all the income, and the additional debts that it is making, being spent in the form of the AP government’s various welfare schemes. Thousands of crores have been deposited into the bank accounts of the people of the state, via the many welfare schemes that the YSRCP government has introduced.
Furthermore, no banks or other financial institutions are ready to give any sort of loans to the Ap government, looking at its financial position.