Telangana can’t pay salaries sans Central help
Reserve Bank of India
Hyderabad: The Telangana government has plunged into its worst financial crisis after the Reserve Bank of India diverted Rs 1,274 crore from its account to the income-tax department to pay I-T arrears of AP Beverages Corporation last week. Unless the Centre comes to its rescue, the government will be not in a position to pay salaries for employees next month.
Union finance minister Arun Jaitley had assured that the money would be refunded to the state government in two days, but it has not happened so far. Chief Minister K. Chandrasekhar Rao had rushed IT minister K.T. Rama Rao and chief secretary Rajiv Sharma to New Delhi last week after the RBI action. The team told Mr Jaitley that the state government was not in a position to meet its day-to-day expenses following the RBI move.
This comes on top of the deficit crossing Rs 2,500 crore in the first three months of 2015-16. Finance officials have sounded a red alert and urged the government to take urgent steps to avert the crisis. In desperation last week, the TS government diverted Rs 500 crore NREGA funds, provided by the Centre to pay rural workers, to its treasury department to meet its daily needs.
It diverted another Rs 300 crore belonging to the land regularisation scheme, lying in the accounts of tehsildars, even before it was done under the payment category. This amount was paid by nearly 30,000 applicants as the first instalment for regularisation of encroached government land in March.
The state earned a revenue of Rs 7,261 crore in April and May and another Rs 2,000 crore was mobilised through loans. Against this, the revenue expenditure was Rs 8,500 crore. If the planend spending is included, the figure crossed Rs 10,921 crore, resulting in a revenue deficit of Rs 1,220 crore. This deficit increased to nearly Rs 2,500 crore after RBI diverted the Rs 1,274 crore to I-T department.
“The first challenge before the government is to pay Rs 2,200 crore to banks as the second instalment of the crop loan waiver scheme. The kharif season is in full swing and farmers are awaiting bank loans. Banks will halt disbursal of loans if the government does not pay up,” said a senior official.
( Source : deccan chronicle )
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