Faced with severe financial crunch, the Y S Jagan Mohan Reddy government in Andhra Pradesh has been trying every source to borrow loans to meet the regular expenses of the government, besides implementing the welfare schemes.
On Tuesday, the Jagan government obtained another Rs 1,000 crore loan from the Reserve Bank of India by participating in the auction of security bonds.
In all five states took part in the auction and the Andhra Pradesh government bagged the loan offer by projecting 7 per cent interest rate, which is the highest compared to the other states.
Of the total amount of Rs 1,000 crore, the state government would repay Rs 500 cr over a period of 17 years and another Rs 500 crore over a period of 19 years, at an interest rate of 7 per cent.
With this, Andhra Pradesh has almost touched the additional borrowing limit fixed by the Centre. It can now borrow only Rs 150 crore more from any other source for this year.
However, the state finance department authorities are running from pillar to post at the Centre seeking extension of additional borrowing limit, so that it can go in for more loans. If the state can’t mobilise additional resources, it would plunge into further financial crisis.
