With the financial situation turning grim, the State government may have to go for overdraft this year if it were to meet the commitments made in the annual budget. As part of fire-fighting efforts, the Finance Department is all set to put in place austerity measures.
Finance Minister Yanamala Ramakrishnudu, who held a review meeting on the state of finances during the first half of 2016-17 financial year on Friday, did not mince words when he said that the gap between flow of funds and requirement was widening. It had touched Rs. 6,403 crore., subjecting the finances to severe pressure. And, bills to the tune of Rs. 1,000 crore were pending payment. The revenue-earning departments were falling short of targets.
The non-tax revenue had also fallen. Chief Minister N. Chandrababu Naidu would review the performance of revenue-earning departments on October 14, he said.
The Minister said that the government had already availed a debt of Rs. 13,673 crore, though it estimated that it would have to borrow Rs. 20,097 crore this year. The government estimated that the annual deficit would be Rs. 4,868 crore. However, the deficit had already touched Rs. 6,641 crore, he said.
While the revenue generated was Rs. 58,912 crore, the expenditure touched Rs. 65,315 crore. The government departments would have to spend judiciously and avoid unproductive expenditure during the next half year, he said.
New system
Despite the financial constraints, the government was committed to keeping its promises. The Chief Minister had directed the Finance Department to make arrangements to pay the second instalment, amounting to Rs. 3,000 crore, for DWCRA groups.
The amount would be released by the month-end, he said, adding, the government had already made payments to the farmers for this financial year. The Finance Minister said that the government would follow new system from next financial year.
