The Y S Jagan Mohan Reddy government in Andhra Pradesh, which has been facing financial crisis due to tight-fisted attitude of the centre, has got yet another major relief on Thursday.
The Union rural development and panchayat raj ministry on Thursday released Rs 581.70 crore to the state government for the year 2021-22 as per the recommendations of the 15th finance commission, according to state rural development commissioner N Girija Shankar.
This money, which should have been released long ago, had been withheld by the Centre due to non-conduct of elections to gram panchayats and other rural local bodies on time.
Though the Centre later agreed to release the funds as the elections were postponed due to Covid-19 pandemic, it continued to withhold the funds.
But finally, the Centre released the funds following extensive lobbying by state finance minister Buggana Rajendranath Reddy with the Union ministers during his recent visit.
The rural development commissioner said out of the total amount, around 70 per cent, accounting for Rs 407.19 crore would be spent on gram panchayats and 15 per cent each (Rs 174.51 crore) to mandal parishad and zilla parishads.
“The releases were made as the elections were held to the rural local bodies as per the directions of the Centre,” Girija Shankar said, adding that these funds would be of great help to the state government to take up the developmental works in the rural areas.
It may be mentioned that the Centre, last week, gave approval to the state for borrowing another Rs 10,500 crore through open market.
The department of expenditure of the Union ministry of finance sent a communique to the Reserve Bank of India that it was allowing the Andhra Pradesh government to go in for additional market borrowing.
The state government has been facing severe financial crunch due to sharp fall in revenues due to Covid-19 and the central share in the taxes.
While the Jagan Mohan Reddy government has been ensuring that the welfare schemes are not halted, it is facing troubles in paying salaries to the employees on time.
It is compelled to go in for overdraft facility with the RBI every time to meet the day-to-day expenses. The state is not able to go in for additional loans due to restrictions imposed by the Centre for additional borrowings.
