Wastage of public funds by Andhra Pradesh Government

Andhra Pradesh government has paid an amount of Rs 8 Crores towards interest on Overdraft facility utilised for 5 days from Reserve Bank of India (Central Bank). This happened due to a financial mismanagement / miscalculation by the government. The government released Rs 2067 Crores towards pending incentives for industrial units just 5 days prior to the closure of the financial year. It is understood that these dues are pending for over a decade.

This is the news item which has come in the news papers yesterday. What is the motivation to release the entire amount of incentives at one go that too when they were outstanding for over a decade? Second thing is why is it necessary to release these funds at one go when the government is well aware that it does not have sufficient funds in its account in central bank? This is a surprising act by the government which is headed by an experienced Chief Minister, Mr Chandrababu Naidu. But a look at his previous rule, we find that his government utilised the overdraft and ways and means advances from Central Bank for nearly 1200 days. So it is quite natural that he is accustomed to utilisation of debt funds. There is nothing wrong in using debt as this is done by everyone from individual to the sovereign governments to leverage their financial position. However it becomes a danger signal the moment you start utilising the costly overdraft facilities to tide over day to day operations. This is like using credit cards to buy provisions when you do not even have any income sources and pay one credit card debt with another credit card. This will get the entity into a debt spiral.

Of late Andhra Pradesh government is splurging a lot of public money with little or no tangible returns like the Rs 15 Crores used by the Chief Minister for chartering special planes for his foreign trips and even his regular travel from the joint capital Hyderabad to other cities in Andhra Pradesh. There is nothing wrong if a Chief Minister travels by Road (Vijayawada is around 340 Km from Hyderabad and 4 hours away) or even by regular passenger planes. Also this government is spending more than a Crore of Rupees on publicising their achievements in the last 10 months (hardly much has happened). Or even take the case of one time distribution of the so called "Chandranna Kanuka" (Brother Chandra's Gift) to the poor people in the form of a packet containing some rice, ghee, sugar etc for the Sankranthi Festival at a cost of Rs 300 Crores. Of this amount it is alleged a part went to his family concern "Heritage Foods Ltd" for the Ghee supplied. This kind of one time gifts does not add anything to improve the lives of the poor but result in wastage of the government funds. The funds pointed out above amounting to Rs 325 Crores could have been utilised to improve the quality of life for some of the villages by supply of potable water or electricity (yes there are still some villages in Andhra Pradesh with literally no power connections). There may be other forms of wastage like this happening every day. An experienced Chief Minister like Chandrababu Naidu should have avoided this kind of wastage by setting a better example to his ministers and bureaucrats.


Hope better financial sense prevails in Andhra Pradesh in coming months.

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