Hyderabad: The Centre has stopped payment of about Rs 1,240 crore to AP for November, officials said on Wednesday.
The Centre releases Rs1,760 crore as the state’s share of tax and Rs 450 crore to fill the revenue gap on the first of every month. This month, the Centre released Rs 970 crore under tax devolutions, and held back the revenue gap funding.
Officials said the Centre had stopped the payment of certain funds to all states due to financial problems. They said the Centre would release the Rs 1.240 crore later.
The practice of stopping of funds has become major problem for AP which itself is facing a financial crunch. The AP government is running under ‘ways and means advances’ from the RBI to tide over the crisis.
If Centre does not release the money quickly, the state government will have to take an overdraft this month, officials said.
Despite the crunch, the state government has decided to release Rs 2,500 crore to DWCRA groups. For this, the state government had borrowed Rs 2,000 crore at the end of October.
Officials said the state government would face a severe financial crisis in the coming days. It has stopped paying of pending bills which have mounted to Rs 1,500 crore. Only urgent bills were being cleared, and it would not be possible to pay the others in the current financial year.
