Loans In The Name Of Ports & Funds Diversion To Freebies?

Andhra Pradesh Government is becoming innovative to get loans. This time the Government is trying to bring loans on the ports like Bhavanappadu, Machilipatnam, and Ramayapatnam.

The officials have approached Rural Electrification Company (REC) and Power Finance Corporation for loans. REC reportedly in Principal agreed to give loan of 12,000 Crore and PFC may give the same account.

The state government is trying to get 20% of that amount in advance which means 2,400 Crore. The government is planning to divert these amounts to freebies.

Experts are saying that REC and PFC should introduce stringent clauses to ensure the loans are used only for Ports.

If loans taken for infrastructure and assets creation are diverted towards Revenue Expenditure, the state has to suffer for several years.

Union Government is only reimbursing Polavaram expenses. World Bank and Asian Development Bank also gives loans with stringent conditions. Let us see what REC and PFC do.