india

Updated: Jan 22, 2015 09:10 IST

Seven months after Telangana and Andhra Pradesh separated, AP chief minister N Chandrababu Naidu’s worst fears may come true – his state could be pushed into a financial crisis soon.

The state coffers have dried up so much that the government might default on the salaries of its 5.7 lakh employees and 3 lakh pensioners. The salaries (and pensions) bill for January stands at Rs 2,800 crore.

"We are under a great financial stress. To put simply, we have no money. Either God or GoI (government of India) should help us," a senior finance department official told HT.

Andhra is reeling under a revenue deficit of a whopping Rs 15,980 crore this fiscal, which the residual state acquired when Telangana was created on June 2.

Till now, Naidu has pinned his hopes on his ally Prime Minister Narendra Modi who, during his election campaign, accused the UPA of dividing the state irrationally and offered every kind of support to Andhra if elected to power.

Now with fiscal danger looming large, the state chief secretary IYR Krishna Rao and finance secretary PV Ramesh visited New Delhi to get immediate help to avert the crisis.

In fact, officials point to the Andhra Pradesh Reorganization Act that stipulates reimbursement of the revenue deficit in its first financial year by the Centre.

“Till now, not even a single rupee has been received,” said an official.

With no assurance in sight, the state would be forced to borrow more from the Reserve Bank of India to tide over the situation. The new state already took Rs 8000 crore from the RBI.

The centre is said to be tight-fisted on supporting the state so far as its resources are also weak.

Some in the state opine that given the dire situation, Naidu could have avoided populist measures like the doling out of Sankranti gifts for the poor that burdened the state further by about Rs 310 crore.