In a reflection of grim financial position of newly formed State of Andhra Pradesh, the State Government has decided to stop the payment of all the pending bills for two months.
Andhra Pradesh Chief Minister N Chandrababu Naidu, who on Wednesday came out with a white paper on the financial position of the State, directed Chief Secretary IYR Krishna Rao to issue instructions to all heads of departments to stop clearing pending bills of contractors and others. At the moment, the Government will be able to pay only salaries, pensions and establishment costs, the officials said.
Naidu has decided to control the expenditure in view of the serious fiscal deficit staring in the eyes of the Government. The State Government has bills of Rs 5,000 crore of various departments pending before it. A clear picture, however, was likely to emerge only after Finance Minister Y Ramakrishn-udu presents the annual Budget in next couple of months.
The bifurcation of Andhra Pradesh has left the residuary State of Andhra Pradesh reeling under a financial crisis as it had lost the main source of revenue in Hyderabad. The State has a fiscal deficit of Rs 16,000 crore. Adding to the discomfiture of the State, it has still not got a clear idea of what the centre was going to give it as part of special package.
The white paper, Naidu issued before the media this evening sums up the financial situation of the state during last ten years and also provides guidelines for the future. Naidu said that his Government will go according to the plans in the future with a participatory approach to involve the people in the development of the State.
“Through this white paper, we are trying to keep the people informed about the hardships caused by the bifurcation,” he said. “The bifurcation has increased both the revenue and the fiscal deficits,” he said.Naidu blamed the previous UPA Government for indiscriminately increasing the tax burden on the people and said that the fiscal condition had worsened since bifurcation of the two States.
However, he acknowledged that the per capita income had increased during last ten years from Rs 2,266 to Rs 7,136. But he charged the previous Government with completely neglecting investments in power sector and relied on the purchase of power at a higher cost. Though Rs 94,000 crore were spent on irrigation projects, there were no benefits to the farmers, he said. Naidu promised 24 hour power supply to domestic consumers and industries in the State from October 2.