VIJAYAWADA: Blaming the previous Chandrababu Naidu regime for the financial crisis in the State, Finance Minister Buggana Rajendranath Reddy said that the Jagan Mohan Reddy government is in the process of undoing the damage.
The minister said that it could take at least three years to overhaul the system riddled with gross mismanagement, adding that the corrective steps initiated by the government have helped the State not only reduce its overdraft but also in gradually boosting lenders’ confidence.
In a press conference at the Secretariat on Friday, the minister explained that the previous TDP government had left behind a huge legacy of debts, which stemmed from gross off-budget borrowings, unnecessary spending and supplementary loans without revenue resources.
“Normally, any government might leave behind a debt of Rs 5,000 crore or so. But, we inherited Rs 48,000 crore from the TDP. Besides this, we are facing about Rs 40,000 crore unpaid bills. We are in the process of controlling the damage, which will take time,” he revealed. When asked how long it would take for the government to undo the ‘damage’, the minister said, “We are clearing bills less than Rs 10 lakh and it may be done by December. We can’t say how long it would take to clear the entire bills as we also have our priorities. But, it may take about three years to rectify the system.”
On SBI’s letter to AP Power Finance Corporation, which sought Rs 3,000 crore loan from the bank, enquiring about the State’s repayment capacity, the minister explained, “The observation of the SBI was that the outstanding government guarantees shot up sharply from Rs 9,665 crore in 2017 to Rs 35,964 crore in 2018. But, it is a mischief to blame the four-month-old present government for the mismanagement of the previous regime. It is the TDP’s mismanagement that is spilling over now. “Similarly, he noted that the TDP government’s poor financial management led to the State being in overdraft for 43 days in 2018-19 fiscal. “Before elections, in April and May, too, the government went in for overdraft for 14 days. But, after we came to power, we were in OD for eight days in June. In the subsequent three months, there was no OD,” he said.
Buggana rebutted the TDP leaders’ claims of lowered lenders’ confidence and decreased per capita income. “On October 7, as part of regular borrowing, the government sought state development loan (SDL) of Rs 1,000 crore from RBI. It was oversubscribed and we raised Rs 2,005 crore. If the lenders’ have no confidence, why would there be oversubscription?” he asked. “Their claim that the per capita income came down too doesn’t hold any water. The calculations are done based on the performance of previous government, in which agriculture GSDP increased and that of industries and service sector plummeted,” he explained.
The minister also alleged that the TDP government borrowed irresponsibly. Explaining that the government could borrow Rs 30,000 crore in an entire year, Buggana revealed that, for the first time ever, the earlier government borrowed Rs 5,000 crore in a single day in April this year. “Between January and April, the AP Civil Supplies Corporation borrowed Rs 4,800 crore. And just before elections, the government went for supplementary borrowings, by creating new schemes, for Rs 38,000 crore. All these were diverted for various schemes and payment of contractors’ bills. While public utility bills like midday meals, fee reimbursement, land acquisition, discoms, hospital subsidies, outsourcing employees’ salaries were kept pending for nine to 12 months, contractors dues were cleared. In March, Rs 3,300 crore worth bills were cleared. Of this, Rs 1,000 crore was paid to their 8 favourite agencies,” he claimed.
He slammed the TDP government for pushing the energy sector into doldrums. He accused it of signing renewable power purchase agreements (PPAs) at exorbitant prices knowing fully well that the generation costs would come down shortly. “The previous government left the State with a debt burden of Rs 14,857 crore to Discoms and signed PPAs with terms favouring the power companies,” he noted.
A glimpse of State finances
Rs 2.58L cr
Total public debt inherited by the YSRC government
Rs 3.62L cr
Total debt and liabilities
Rs 40,000 cr
Rs 9,256 cr
Pending subsidies to be given topower utilities
Rs 5,601 cr
Power dues to be paid by government departments to Discoms