In a meeting to discuss the loan waiver issue, Chandrababu was believed to have put forward a proposal to keep his promise on the loan waiver issue.
He wanted the advice of the experts on issuing bonds to the banks for around Rs 18,000 crore. However, the experts promptly dismissed this proposal saying that banks would not be willing to give bonds to the government for such a huge amount in the present state of the economy.
They also said that even if the banks agreed the interest rate charged would be around 12 to 13% whereas the government was currently paying around 7 to 8%. Also, the working capital available for the current financial year with the government was around Rs 5000 crore currently.
Another problem for Naidu is that the banks have ruled out giving fresh loans for the new ‘Kharif season unless the old dues were cleared first.
What will happen ultimately is that by hook or crook, Naidu will arrange for some amount and clear a percentage of the loans off.
The banks would then give fresh loans to the farmers who will not repay even a single paisa back until 2019, for Naidu in order to get elected again would promise another waiver. Thus the economy would be bled dry.
Naidu and his community in the meantime having made enough money from selling off the real estate in and around Vijayawada and Guntur will migrate to Singapore and reside in one of his family-owned hotels there!
