BREAKING NEWS

Sorry, can’t give more money: RBI to Jagan Govt

With money on welfare schemes being spent beyond the prescribed limit and expenditure rising beyond income, Andhra Pradesh’s financial situation is at its worst at the moment. The state’s income has taken a huge blow due to the Coronavirus pandemic and the real estate has been hit too, apart from the mindless spending of Jagan government. 
 
In one word, if the welfare schemes are implemented, the state cannot afford to pay salaries to government employees and if the salaries are paid, the welfare schemes cannot be implemented. 
 
As of 6th April, only 35 per cent of the total state government employees have been paid their salaries and that too with borrowed money. On the other hand, the Jagan government has said it could not pay salaries due to a series of bank holidays. This is drawing a lot of ire from government employees as well as citizens whose benefits from schemes have come to a grinding halt. 
 
In this scenario, the Reserve Bank of India (RBI) turning down AP government’s request to borrow Rs. 2,000 crore from the open market to have cash reserves has gotten to the current government’s nerves. The RBI has informed the Jagan government that it would let the state government participate in the securities auction only after it gets the union government’s approval.
 
Early in the week, the Andhra Pradesh government had raised Rs 2,000 crore through bonds auction to pay salaries to the rest of the employees. However, with the RBI blocking the move, the state finance ministry is worried about the salaries to employees and pensions to the retired employees.
 
The state’s economy is in such a situation where the daily income is sufficient to only pay the salaries in instalments. In that case, implementation of the government welfare schemes has become a million dollar question. Well, it looks like Jagan has put himself in a situation he himself cannot come out of. 
 

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