Andhra Pradesh to be hit by fiscal crisis!

The truncated Andhra Pradesh state is likely to be hit by fiscal crisis. The government which is already running the show by deficit budget is slowly running out of money. In the last six months, the government has released orders worth around Rs 40,000 crore while the state’s tax and non-tax revenue was Rs 26,000 crore and borrowings Rs 8,000 crore. The government has also released 5,500 crore for Mahatma Gandhi National Rural Employment Guarantee Programme (NREGP) and 1600 Crore for the scholarships of students.

At this rate, the state will very soon run in to financial crisis and will have to depend on Central assistance and borrowings. According to Andhra Pradesh Reorganization Act, the center needs to make up the deficit budget of the state for the first year. AP government has shown a deficit of 15000 Crore in the first year budget and waiting for the Central government to release the funds accordingly. In case Center do not intervenes in time, AP may have to face difficulty even in paying salaries to its staff very soon.