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Crisis in Offing as State Expenditure Mounts

All the district treasuries, Pay and Accounts have been directed to release funds for emergency and urgent works only

Published: 16th February 2016 05:19 AM  |   Last Updated: 16th February 2016 05:19 AM   |  A+A-

VISAKHAPATNAM: The state government has been worrying about meeting huge expenditure in March. It directed all the district treasuries and Pay and Accounts to implement “Controlled Release” of funds, indicating that funds should be released for emergency and urgent works only. Meanwhile, the functional heads of various line departments are finding it impossible to meet the expenditure in the current fiscal.

Expecting funds in the last quarter of the financial year, several departments implemented various works and the contractors are eagerly waiting for payments to bills. However, according to the senior officials in the Finance department, there will be 30 to 40 per cent reduction in the budget allocations during the 2015-16 financial year.

According to highly places sources, the senior officials of the Finance department informed Chief Minister N Chandrababu Naidu that it was high time the Centre was pressurised for special funds. If the Centre did not release special aid to the residual Andhra Pradesh at least in 2016-17, it will not be possible to initiate any developmental activity in the state. As the revenue generation in the state is far below the ground-level expenditure, the state is finding it difficult to meet    expenditure, the Finance department informed the government.

Meanwhile, the elected MLAs are pressurising the departmental heads and collectors to take up various developmental activities and other works in their respective constituencies. As the new government has already completed two years of its term, the MLAs lament the delay in granting the works. With the collector’s consent in the districts, some of the departments have diverted funds to the other departments.  But the borrowed departments are not able to repay to the parent departments.

“With the tight financial position, the treasuries have been directed to implement “controlled release” of funds. Post- bifurcation, the state government is bound to incur additional expenditure. Violating  the Union Government assurances made in the Andhra Pradesh Reorganisation Act, no funds were released except sanction of some projects and educational institutions. We have also directed the functional heads to minimise their priority expenditure for the 2016-17 fiscal. There will be 30 to 40 per cent cut in the 2015-16 budget sanctions of all departments,” said a senior official of the finance department. On the impact of the current financial crisis on the welfare programmes, the official said that due to  political compulsions the government has been continuing with the welfare programmes affecting the development works.

The Finance department is also advising the elected representatives, ministers and even the chief minister to be judicious while announcing sops to the people. All the functional heads of line departments have also been directed to think twice before sending any new proposals to the government. Unless, it is an emergency and urgent, the heads have been direct to stop the proposals/discourage at the district level only.

“As an example, take the expenditure on the International Fleet Review. Almost all the departments were involved in the event by spending their funds. The GVMC alone had spent Rs 89 crore to deck up the city for the IFR. However, the government sanctioned only Rs 25 crore. The VUDA, Revenue, Police and other departments spent from their regular funds. The GVMC had written a letter to the government seeking another Rs  25 crore,” a senior official said.

Additional Commissioner (finance) of GVMC SS Varma said that the government recently sanctioned Rs 25 crore for the IFR works. However, the GVMC urged the government to sanction another Rs 25 crore, he added.

Austerity Measures

  • Minimising expenditure in 2016-17
  • Departments have been directed to minimise expenditure on stationery, maintenance, fuel and other activities
  • Plans to generate funds through internal resources like auction of waste and under utilised goods, material and equipment.
  • Outsourcing of works to be stopped and inter departmental staff to be adjusted
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