AP on the verge of a financial crisis

Hyderabad, Oct 29: Financial crisis in Andhra Pradesh is aggravating with each passing day. The government is opting for overdrafts and loans as the gap between income and expenses is widening further. Due to the grim financial situation prevailing for the past two months, government imposed caps on payment of bills. Every month the government is borrowing from open market and it will soon run out of borrowing ability completely. As the government acquired Rs 8,500 crore loan from open market already, now it can only acquire Rs 6,896 crore in this fiscal. The government should borrow Rs 10,000 crore this year to steer the state out of crisis. The government is finding it difficult to release Rs 4,000 crore for crop loan waiver scheme. According to reports, sanction of Rs 3,000 crore loan to SHG members and excess fund allocation for Polavaram project are the originating and aggravating factors of the financial crisis. On an average, AP is borrowing Rs 1,000 crore per month from open market and in this amount Rs 900 crore is being used to repay debts and interest amounts. In the past six months AP's income stood at Rs 34,577 crore and expenditure incurred is Rs 35,116 crore.