Telangana in the grip of major financial crisis

Hyderabad, July 10: Telangana, the second richest state in the country next to Gujarat, is facing a major financial crisis for the first time after its birth. The situation has worsened to such an extent that the State government is facing fund crunch for organizing Godavari Pushakaralu and for fulfilling ‘Ramzan sops’ promised to the Muslims. The situation further aggravated as Reserve Bank of India diverted Rs 1,260 crore from the State’s account to Income Tax department to pay the arrears of AP Beverages corporations a week ago. Besides this the government released Rs 2,250 crore towards crop loan waiver for farmers and Rs 1,000 crore towards salaries of employees and as a result the state is staring at financial crisis. The officials are taking permission of either KCR or Chief Secretary even to release Rs 1 crore amount. The Finance Department is not clearing bills including that of flagship Mission Kakatiya programme and free power to farmers. Sources said that the senior State government officials are contacting their counterparts in Union government to secure the funds diverted to IT department. The government decided to secure Rs 1,500 crore through sale of security bonds. So far the government secured Rs 3,400 crore through sales of bonds in the present financial year. The government can sell security bonds worth Rs 10,500 crore in a financial year.