Andhra Pradesh heading towards Overdraft!

Andhra Pradesh state which is handicapped due to the state division is reeling under the pressure of heavy financial burden. The state is already having a 16000 Crore budget and the helping hand of the Center is a mirage. It is said that the state is seeking to go overdraft to meet its daily expenses.

The state is likely to go Overdraft before March 12th, the day the state budget will be tabled in the assembly. States facing severe financial crunch are allowed the overdraft facility to meet its daily expenses. The erstwhile Andhra Pradesh never had to go overdraft since 2004.

The state successfully avoided the financial danger in the last two months by arranging funds with ‘ways and means’ advances to pay salaries for the staff. They also stopped clearing various bills but as the financial year is ending, the bill payments can not be delayed further.The overdraft option will have a very bad impact on the state’s credit worthiness and flow of investments as it could send alarming signals to the investors on the financial situation of the State.