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Debt-ridden AP seeks funds from Finance Commission

Apart from demanding special category status for 10 years, the Andhra Pradesh government has sought from the 15th Finance Commission Rs. 2,19,695 crore specific grants.
 
In the report submitted to the commission two days ago, the government requested for Rs 47,424 crore as capital city development grant. However, the report made no mention of capital city Amaravati, like the previous government did. 
 
In the breakup of grants, the state government divided the amount under Judiciary, Legislature, Executive and other heads. It explained in the report how the previous TDP government borrowed indiscriminately to meet the expenditure for the schemes announced before the 2019 assembly elections. 
 
As a result, the report pointed out that the new government had inherited 2,72,266 unpaid bills amounting to Rs 39,423 crore as on April 1, 2019.
 
The report found that Rs 16,260 crore of resources from corporations have been utilised in the form of budget borrowings. There are Rs 10,000 crore of deferred dues of the power sector and AP Civil Supplies Corporation. 
 
The report maintained that while on one hand the new government inherited Rs 65,683 crore of liabilities, it has a limited borrowing space on the other hand. The outstanding liabilities of the state government as on 31-3-2019 have mounted to Rs. 2,58,928 crore. 
 
The state government urged the 15th Finance Commission to facilitate Grant of Special Category Status by the central government to the state for 10 years in the interest of reducing the state’s revenue deficits and initiating a virtuous cycle. 
 
The state government said, “We will continue to pursue this matter with the Government of India. Pending the decision of Special Category Status, we request that we may be provided some relief through Externally Aided Projects (EAPs) and Centrally Sponsored Schemes (CSS). AP is having 11 on-going EAPs with an outlay of Rs 25,849 crore, which were signed after 2015-16.”
 
“Another five projects with an outlay of Rs. 15,242 crore have been approved by Government of India and External Funding Agencies. The total cost of EAPs is Rs 41,091 crore. Considering the difficult fiscal position, the state is seeking a grant of Rs36,982 crore, which is equivalent to 90% of EAP loans. We request that the grants equivalent to 90% of EAP loans be extended for a period of 10 years”. 
 
The state government also sought debt relief of Rs. 11,039 crore to AP by writing off outstanding central loans as on 31 March 2020.
 

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