Today's Paper

Centre asks State some tough questions on spending

The Centre is said to be taking a good hard look at the accounts furnished by the Andhra Pradesh Government, including its revenue deficit figures, as it examines the State’s claim to additional financial assistance, sources said.

And Central Government officials, sources added, are reluctant to believe that the huge revenue deficit run up by the State is entirely due to bifurcation but also due to the crop loan waiver announced by it.

“They are raising right and hard questions to ensure that the State is not frittering away its limited resources and blaming it on bifurcation,” one official said.

The exercise to finalise a financial package based on the provisions laid down in the Andhra Pradesh State Reorganisation Act began long before Prime Minister Narendra Modi’s speech at the Amaravati foundation ceremony on Thursday, where he promised implementation of the law in “letter and spirit”. Accordingly, the Centre has been seeking additional information from the State almost on a daily basis, sources said.

The exercise to finalise a law-based package for Andhra Pradesh began in the last week of August after Chief Minister Chandrababu Naidu met the Prime Minister on August 22 and gave a detailed representation on the State’s claim to financial assistance from the Centre.

In fact, two days ahead of the Amaravati ceremony, senior State officials were called by Niti Aayog Vice-Chairman Arvind Panagaria on October 20 for further discussions on various issues including the resource gap funding of Rs.12,000 crore due from the Centre for 2014-15. It is likely that the Niti Aayog’s report on funds to be released to Andhra Pradesh will take at least two to four weeks more.

Once the report reaches Prime Minister’s Office, Mr. Modi is expected to take some time to give his approval.

“We hope for a concrete announcement after the Bihar elections,” sources in the State said. In the last couple of days, Niti Aayog has sought more information from the Andhra Pradesh Government, such as the detailed statements on the expenditure it incurred in 2014-15 and in the first two quarters of the current fiscal year.

They also wanted comparative statements on the revenue and expenditure of both Andhra Pradesh and Telangana.

The revenue deficit of Andhra Pradesh as a fallout of bifurcation in the first year was estimated at over Rs. 14,000 crore and was submitted to the Centre before the Appointed Day of June 2, 2014.

The Centre chose to refer it to the Comptroller and Auditor General (CAG) for verification, who is understood to have given his in-principle approval. Since the Centre has already released Rs. 2,303 crore as resource gap funding for 2014-15, government sources are confident that the remaining Rs. 12,000 crore will be released soon.

But it will be a part of the financial package desired by the State Government.

Central govt. officials reluctant to believe huge revenue deficit run up by State is owing to bifurcation