Andhra Pradesh

A.P. to borrow ₹25,000 crore to clear pending bills

The State government is availing a loan of ₹25,000 crore from a consortium of national banks, and plans to clear all types of bills before the end of this financial year.

According to information, the government has created a new entity, Andhra Pradesh State Development Corporation (APSDC), exclusively to raise the loan.

Through the process that had begun about three months ago, the government could so far mobilise about ₹6,000 crore from the consortium comprising the State Bank of India (SBI), the Punjab National Bank (PNB), the Union Bank of India (UBI), and the Canara Bank.

“The government is trying to ensure the release of the remaining amount before March 2021. The aim is to clear all pending bills,” says an official on condition of anonymity.

“Due to grim financial condition, the government could not clear bills totalling 1.08 lakh pertaining to various works and schemes in the last quarter of the 2018- 2019 financial year, and the number was brought down to 40,000 by May 2019 with great difficulty,” sources say. The situation has remained more or less the same in the 2019-20 and 2020-21 budgets, it is said.

Aiming for ‘clean’ budget

“It is estimated that the government has to clear bills worth ₹25,000 crore, and has set itself a target to present a clean budget with no carry forwards,” the sources say.

The government has entered into a Memorandum of Understanding (MoU) with the consortium, and has agreed to place the income mobilised from sale of liquor, enhanced cess on petroleum products, and other taxes in escrow account. It will act as a guarantee for the bank loans. It will take five to six years to repay the loan,” sources add.

The revenue through excise will be more than ₹7,900 crore. This excludes the Value Added Tax (VAT) levied on liquor.

The government had generated an excise revenue of ₹4,352 crore in 2014-15, which increased to ₹6,220 crore by 2018-19.

The revised estimates for the year 2019-20 stand at ₹6,914 crore, and the budget estimates for 2020-21 are ₹7,931 crore.

Many agencies that have completed works in irrigation, housing, rural water supply, roads and buildings, and municipal administration are yet to receive payment.

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Printable version | Apr 22, 2021 5:48:46 PM | https://www.thehindu.com/news/national/andhra-pradesh/state-to-borrow-25000-crore-to-clear-pending-bills/article33836972.ece

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