The Andhra Pradesh Government has demanded to make Gujarat State model universal in depositing funds for all Centrally-aided State plans of the Union Government.
Since the Gujarat Government has made it mandatory that funds shall be placed at Treasury, the Andhra Pradesh Government has also requested to permit all other State Governments to follow the same by giving special provisions in forthcoming 2018-19 FY Union Budget.
Andhra Pradesh Chief Minister Chandrababu Naidu sent a Memorandum through his Finance Minister Yanamala Ramakrishnudu to Union Finance Minister Arun Jaitley. The Union Finance Ministry conducted pre-budget meeting with all State Governments on Thursday in Delhi.
The Union Government insisted on depositing funds relating to Centrally-aided State plan schemes in bank accounts after routing through the State Government Treasury. The Andhra Pradesh Government has requested permission for depositing the same in the PD A/cs, which are being operated by State Treasury and can be operated through cheques. But some GOI departments dealing with SSA & RMSA etc are insisting that it is mandatary to place the funds in banks.
As Andhra Pradesh is new State, Naidu has requested increase of Fiscal Space to borrow more funds for development of the State. Naidu wrote, "Andhra Pradesh State is facing double jeopardy from the financing perspective; the fragile financial situation is compounded by the increased need for public investment in infrastructure, public services, construction of new capital city, etc. In this context, we require a bigger borrowing space to which we are legitimately entitled. The Fourteenth Finance Commission (FFC) permitted an additional borrowing space of 0.5% of GSDP to States with Debt-GSDP ratio of less than or equal to 25 per cent in the preceding year and interest payments being less than or equal to 10% of the revenue receipts in the preceding year. However, this space is made available to those States that do not have revenue deficit in the year in which borrowing limits are fixed and in the immediately preceding year".