Revenue deficit at Rs 16,000 crore: Will Chandrababu Naidu fulfil loan waiver promise?

Hyderabad: Staring at fund crunch following the state bifurcation, the Andhra Pradesh government is seeking to re-orient its programmes, besides exploring ways to mobilise required financial resources.

The N Chandrababu Naidu-led TDP-BJP government, which also has the obligation to fulfil the many commitments it made to people, has decided to do away with some of the schemes of the previous Congress government that have not only become a drain on the exchequer, but have also become "obsolete".

Some of the schemes that the Chandrababu government implemented between 1995 and 2004 will be re-introduced with the required modifications.

"Many of the Congress schemes have become obsolete. Such schemes will be scrapped as we have to re-orient the government programmes. Yes, some of our old schemes like Aadarana (for artisans) and Deepam (supply of LPG connections to women) will be re-launched," state Finance Minister Yanamala Ramakrishnudu said.

With a revenue deficit of Rs 16,000 crore and fiscal deficit of Rs 20,000 crore in the current financial year, the state government remains cash-strapped.

On top of it, the government has taken on its shoulders a staggering debt burden of Rs 35,000 crore by promising loan waiver to the farmers.

Another Rs 8,000 crore would go for waiver of loans to women self-help groups, weavers and SCs.

The Reserve Bank of India's tough stand against loan waiver and also the possible rescheduling of farm loans is worrying the government as it will have to shell out Rs 35,000 crore in one go if the rescheduling does not happen.

Given the current fiscal health of the state, that will be virtually impossible for the government.

The state Chief Secretary I Y R Krishna Rao has addressed another letter on Monday explaining the farmers' distress caused by a series of natural calamities, including drought and cyclone, and making a case for rescheduling the farm loans.

The Finance Minister says they were exploring various means to mobilise resources without imposing fresh tax burden on people.

"The Centre immediately owes us Rs 7,000 crore as Central Sales Tax compensation. We will also borrow money in accordance with the Fiscal Responsibility and Budget Management Act," Yanamala said.