India: Andhra Pradesh runs out of money to pay salaries

Hyderabad: With its coffers almost dried up, Andhra Pradesh government is not in a position to pay salaries to its employees for the month of January.

The situation is so precarious that the state government’s coffers had only Rs12 billion (Dh715 million).

Worried over the situation worsening, the state government has not only sent an SOS to the union government seeking an immediate release of Rs25 billion but the state Chief Secretary I.Y.R. Krishna Rao was camping in Delhi to talk to the officials of union finance ministry.

Apart from salaries of Rs25 billion, the state government urgently needs another Rs10 billion to clear the bills towards establishment work and maintenance and another Rs3.5 billion to the civil supplies department towards the Sankranti Gift packs provided to the poor families.

For the first time that state government has already availed ways and means advance of Rs4.9 billion from 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 Chief Minister N. Chandrababu Naidu during his visit to national capital earlier this week.

Sources said that the crisis was worsened by misplaced government priorities, including the release of Rs15 billion to industries towards for 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.

The 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.