With the State Bank of India raising concerns about Andhra Pradesh's rising outstanding debts and sovereign guarantees, the state's Jagan Mohan Reddy-led YSR Congress Party government on Friday (11 October) blamed previous Chandrababu Naidu regime for the financial mess the state finds itself currently under.
Finance Minister Buggana Rajendernath said the financial indiscipline of the previous Telugu Desam Party (TDP) government was spilling over and it would take time to undo the damage.
"The previous government has left behind a legacy of huge debts stemming from off-budget borrowings and loans from various corporations and extravagant spending and clearing the dues of their favoured contractors while mounting the dues to public services and other utilities," he told reporters.
On the news in a section of media about SBI letter on the loan taken by Andhra Pradesh Power Finance Corporation (APPFC), Rajendernath said that it was part of regular correspondence. He said he had no knowledge as to how the letter was leaked.
The SBI, in its letter date 30 September, questioned the veracity of the guarantees offered by the state government for Rs 3,000 crore term loan for APPFC.
The Finance Minister said the ratings will be given by agencies like Crisil and Brickwork who have their own basis on assessing the credit worthiness. He pointed out that in January, Crisil gave A+ while Brickwork gave A- rating.
Stating that the outstanding guarantees by the state rose from Rs 9,665 cores in 2017 to Rs 35,964 cores in 2018, he said this was the period of the previous government.
Rajendernath alleged that the combination of then Chief Minister N Chandrababu Naidu and then Finance Minister Yanamala Ramakrishnudu always played truant with the state finances. He said it was the previous government which went out of the way to draw supplementary grants, took loans from all the corporations including Civil Supplies and has the dubious distinction of drawing Rs 5,000 crore on single day.
The minister said huge amounts were paid to their eight favoured contractors while public utility bills like mid-day meals, fees reimbursement, land acquisition, power distribution companies, hospital subsidies, and outsourcing employees' salaries were kept pending.
"The pending bills and amounts drawn before elections were piled up on us and their mismanagement was carried forward and has fallen on us to clear. Now it is the same TDP leaders who are talking about financial management," he said.
Rajendranath said the previous government left the state finances high and dry with total dues to distribution companies to a tune of Rs 14,857 cores and signed Power Purchase Agreements (PPAs) with companies with terms heavily loaded in favour of the latter's favour.
He said was premature to judge the financial situation of the government which is just four months old and it takes at least one year to gauge the performance. On 7 October, the government went for a routine borrowing of Rs 1,000 crore but it was oversubscribed at Rs 2,005 crores which shows the confidence Reserve Bank of India has in the state government, he said.
(This story has been published from a wire agency feed without modifications to the text. Only the headline has been changed.)
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