In 40 days, AP Govt Took Rs 9500 Cr debts!

The Andhra Pradesh government continues to make more debts and freshly it received Rs 3500 crore debts from the Reserve Bank of India (RBI). The AP government gets this borrowing facility through the auction of Security Bonds. In the Security Bonds auction held on Tuesday, the RBI allowed the state government to participate and in a total of five interest slabs, AP government will be receiving Rs 3500 crore.

However, under the Over-Draft (OD) limit, the RBI will deduct Rs 1500 crore out of the Rs 3500 crore. This means Rs 2000 crore will get credited in the AP government’s treasury. The state government intends to use this money to pay salaries for employees and pensions. In fact this has been the same story every month and without debts, the state government is unable to pay salaries and pensions to beneficiaries.

AP’s debts are increasing exponentially in the last 12 to 18 months. Going by AP government’s drawing loans more than Rs. 10 lakh crore new debts have been incurred already. In the last 40 days, Rs. 9,500 crores have been borrowed by the state government. As per the finance department, it is estimated that 30 percent of the income (state revenues) are being paid for interest on these debts.