Is financial health of AP government in doldrums?

Gali Nagaraja

Amaravati: The Government of Andhra Pradesh keeps its employees and pensioners agonisingly waiting for salaries/pensions due to be paid for the month of June, giving rise to suspicions over the financial health of the state.

The government normally ensures payment of pensions and salaries on first of every month. But this time, payments for the month of June have not been made till July 7. The government approximately incurs Rs 4,400 crore—Rs 2,500crore for nearly 5 lakh employees and Rs 1200cr for pensioners–every month.

The YSRC government initially blamed the TDP blocking the money bill in the state Legislative Council for the delay in disbursement of salaries and pensions. However, the government got an ordinance promulgated by Governor Biswabhusan Harichandan on Saturday as a remedy for the appropriation failing to be passed in the council.

Earlier, the ruling YSR Congress party and the TDP were engaged in a blame game for the failure of the appropriation bill or the money bill to get the Legislative Council’s clearance.

Even five days after the ordinance promulgated, the employees and pensioners failed to see the amounts credited in their bank accounts till the evening of Tuesday. This seemingly could be attributed to the precarious condition of the state’s financial position triggered by the Covid-19 and a prolonged lockdown that followed the pandemic.

Drop in revenues 

In the first month of the current fiscal the government received meagre revenues that stood at just Rs 100cr in view of the corona virus. Consequently, the government imposed a cut in the salaries of employees for two months. In the previous financial year (2019-20), the state-owned tax revenues declined by 24 percent for a variety of reasons. This trend sent out signals over the fragile state’s economy right from the beginning of the financial year, pointing to the alleged hostile postures of the YSRC government towards development and industrial growth.

COVID-19 relief fund

The state government has received Rs 491crore towards Covid relief from the Central government in March in the form of advance payments. A part of the amount was incurred on purchase of over 1,000 ambulances and personal protection equipments to augment health services for people in the corona times. The YSR Congress government is accused by the TDP of diverting the rest of the relief fund for acquisition of lands for distribution of house sites among women beneficiaries and distribution of pensions covering the beneficiaries under the Navaratnalu welfare scheme. Chief Minister Y.S. Jaganmohan Reddy stated that the pension scheme was on the top of his agenda so much so that the benefit should not be impacted by the poor finances caused by the pandemic at any cost.

Accordingly, the government planned to deliver pensions at the doorsteps of 59 lakh beneficiaries across the state in time. On his completing one year in office, Reddy also boasted of spending Rs 43,000crore during the year on welfare schemes which obviously took a toll on the state’s financial condition.

The government also planned to distribute house sites among 27 lakh women beneficiaries on Wednesday under the Pedalandarigi Illu Pathakam that required the government to acquire huge swathes of lands from owners. But the ambitious programme was deferred to August 15 following legal hurdles allegedly created by the opposition TDP.

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