Hyderabad: The Andhra Pradesh government has frozen all payments since the past four days. More than one and half lakh bills worth more than Rs 7,000 crore, are pending. There is no financial crisis. The reason cited is that continued payment will increase the fiscal deficit potentially affecting market borrowings in the new financial year. Pay and Accounts officers have frozen payment for bills even cleared by the Finance Department.
Sources said that on the one hand the Finance Department was clearing bills while on the other oral instructions were being issued to the Treasury not to pay the bills. Usually in the last month of the financial year all departments send bills to clear before the end of financial year. So far the Finance Department has received more than one and half lakh bills. Some departments are yet to send. The Finance Department has cleared bills worth about Rs 2,800 crore, but the Treasury is not paying.
In the revised budget estimates the fiscal deficit was estimated at Rs 20,497 crore at the end of current financial year. Finance Department officials told the government that if the pending bills are paid then the fiscal deficit will exceed Rs 25,000 crore and the state government will face difficult in borrowings in the next financial year.
The state government has about Rs 2,000 crore in hand at present. It is going in for market borrowings of about Rs 3,000 crore next week. The Central government has already given permission to the state to borrow Rs 3,000 crore. Through market borrowing, the state is set to get Rs 1,500 crore next Monday and another Rs 1,500 crore, by Wednesday. The Centre will release about Rs 1,300 crore next week as state government’s share in tax devolutions. By the end of next week the state government will have about Rs 7,300 crore in hand.
