Andhra Pradesh to borrow from first month

Hyderabad: The Andhra Pradesh government, which is facing a financial crisis, is looking to borrow from the first month itself. The state government in June had written to the Reserve Bank of India (RBI), asking permission to borrow Rs 2,000 crore. A reply is still awaited.

According to Fiscal Responsibility and Budget Management (FRBM) Act, the state government is allowed to borrow Rs 27,000 crore in a year. After formation of the new state, in the first month, the major revenue earning departments in Andhra Pradesh did not reach their targets.

Depending on the July revenues, the state government will be in a position to assess the total earnings in the present financial year.

Meanwhile, to meet expenditures, the state government has decided to borrow Rs 2,000 crore and RBI will give permission depending on the state government’s financial position and its repaying capacity.

The government, however, has already received an amount of Rs 4,000 crore in the consolidated fund.

The amount was collected in May when the state was still united. Therefore, the amount will be divided between Andhra Pradesh and Telangana.

While AP will get Rs 2,320 crore, Telangana will get Rs 1,680 crore in the ratio of 58:42.