With its coffers almost dried up, Andhra Pradesh Government was not in a position to pay salaries to its employees for the month of January. The situation was so precarious that the State Government’s coffers had only Rs1,200 crore.
Worried over the worsening situation , the State Government has not only sent a SOS to the Union Government seeking an immediate release of Rs2,500 crore but State Chief Secretary IYR Krishna Rao was camping in Delhi to talk to the officials of Union Finance Ministry.
Apart from salaries of Rs2,500 crore, the State Government urgently needs another Rs1,000 crore to clear the bills towards establishment works and maintenance and another Rs350 crore to the Civil Supplies Department towards the Sankranti gift packs provided to poor families.
For the first time the State Government has already availed ways and means advance of Rs490 crore from the Reserve Bank of India to keep the shop running. The fact that the State Government was not in a position to pay salaries to the employees was openly stated by the Chief Minister N Chandrababu Naidu during his visit to National Capital earlier this week.
Sources said that the crisis was worsened by some wrong priorities of the Government like releasing Rs1,500 crore to the industries towards the arrears of concessions and power subsidy for the last ten years.
Similarly, the decision to increase the retirement age of employees from 58 to 60 years has also added to the burden of the State Government. Over fiscal situation of the State was so bad that its expenditure was overshooting the revenue by 30 per cent, an official in the State Finance Department said.