Centre allows AP to raise money despite massive debt burden
The Government of India has given a much-needed breather to the cash-starved Andhra Pradesh government, allowing it to raise ₹10,500 crore through open market borrowing (OMB) for the first nine months of the ongoing financial year.
With this, the total open market borrowing allowed to the state during the current year would be ₹ 31,251 crore, the Union Finance Ministry said in a letter to the Reserve Bank of India.
The Centre fixed a Net Borrowing Ceiling (NBC) of ₹42,472 crore for the state for the year 2021-22, with a borrowing space of ₹37,163 crore for the first nine months.
A ‘debt statement’ prepared by the state Finance Department indicated that a sum of ₹ 34,058.80 crore has already been borrowed from April to August this year. The sum includes ₹14,867.60 crore OMB in the first five months of the current fiscal year, the statement said.
The state’s cumulative debt has now shot up to a whopping ₹3,84,615.66 crore, including ₹1,27,105.81 crore borrowed by the Jagan government in the last two years. Besides, other outstanding loans, for which the state government gave guarantees, climbed to ₹96,500.36 crore, an increase of ₹47,058 crore in the last two years.
Unable to pay even the staff salaries in time, the Jagan government requested the Centre to give consent for raising ₹17,810 crore through open market borrowing in the first nine months of the 2021-22 financial year.
The Centre adjusted an amount of ₹17,923.94 crore with the available borrowing space on account of “over-borrowing” by AP during the previous years and thereby brought down the NBC this year.
The state government has been requesting that the Centre review the whole thing in the light of the repayments made under State Development Loans pertaining to the erstwhile united Andhra Pradesh, official sources in Amaravati told news agency Press Trust of India.
TEJASWINI PAGADALA is an independent communications consultant. She has previously worked with the Andhra Pradesh Chief Minister’s Office as the Communications Officer where she has written English speeches for the CM, managed English media communication from the CMO and handled social media accounts of Andhra Pradesh Chief Minister and the Government.