Jagan Government Has Got The Shock Of Its Life?

Like never in the history of Andhra Pradesh, today is the 9th of the new month and many government employees and pensioners in the state are yet to get money in their accounts. On Tuesday, the cash-strapped government has pooled in 2000 Crore in an RBI auction paying the highest interest rate in the country.

The Union Government further transferred 1,470 Crore as Revenue Deficit. The 3,470 Crore Rupees should have helped the Government tide over the crisis of July month. But then, the Government is in for a rude shock after the RBI has taken the money adjusting to the money the government owes to the Central Bank.

The Government will now have to go for yet another Overdraft or go for market borrowings to pay the employees and salaries. Moreover, even after that 3,470 Crore deposit, the state government has to still pay 800 Crore towards OD to RBI. If the government takes OD of another 600 Crore, the OD will become 1,400 Crore and has to be repaid in four days which is again impossible.

So, the government is under severe stress, according to a report in Andhrajyothy. AP Government has borrowed 18,100 Crore in just thirteen weeks. We are just into the fourth month of this financial year and the state government is allowed only around 20,000 Crore loans which will be exhausted next month.