Center To Review AP’s Loans Every Three Months

Union Government has warned Andhra Pradesh Government over limitless loans. The central government has clarified to the state government that it will review the financial health of the state every three months in this financial year.

“The focus should be on spending money towards Capital Expenditure (which is expenditure towards infrastructure creation). We will review in September, December, and March. If the target is not met, we will decrease the loan limit,” the center reportedly warned the state government.

The RBI has asked the state government to take the Union Government’s approval when the state tried to get a 2,000 Crore loan in the very first month of the financial year. The Center has written to the state that it can not borrow more than 42,472 Crore in 2021-22.

It also clarified that 27,589 Crore should go towards Capital Expenditure which means needs to be spent on infrastructure creation. That means only 14,883 Crore can be used on freebies.