Hyderabad: AP Chief Minister N. Chandrababu Naidu will present a special financial package proposal to Prime Minister Narendra Modi during a meeting on January 12 or 13 in New Delhi.
It will be after almost a year that the CM will meet mr Modi and he is expected to submit a memorandum on several issued related to the AP State Bifurcation Act apart from the special financial package.
Mr Naidu seeks to clear outstanding loans through a special financial assistance from the Centre. He will seek the PM’s approval for this.
In fact, TDP and BJP MPs had submitted a memorandum to Mr Modi when they met him on Friday. The issues will be discussed by Mr Naidu during his meeting with the PM. Mr Naidu expressed disappointment over the letter from the Centre on June 10, 2017, intimating that the special assistance would be provided by way of repayment of loan and interest for the external-aided projects (EAP), signed and disbursed during the five years and it would not provide support to clear outstanding loans. It also intimated that the EAP loans would be released to the state in the present procedure as loan only and within the Fiscal Responsibility and Budget Management (FRBM) limits.
According to the Andhra Pradesh government, it could have been received in the ratio of 90:10 under Centrally-Sponsored Schemes (CSS) at Rs 2,951 crore in 2015-16 and Rs 2,992 crore in 2016-17.
But the Centre arrived at Rs 2,516 crore for 2015-16, deducting its share of schemes and those for which the sharing pattern was same for special status and other states.
As a result, the state government tentatively arrived at Rs 15,000 crore for five years from 2015-16. It was expecting this amount under EAP as Central grant and a provision of Rs 3,500 crore was also made in the 2017-18 Budget. Apart from this, special category states were eligible to grants under CSS as well as EAP projects at 90:10 ratio.
The State Government had sought special assistance at 90:10 ratio for EAP projects as given to special States. Loan received under EAP was Rs 685.17 crore in 2015-16 and Rs 873.81 crore in 2016-17. As a special category State, AP would be eligible to 90 per cent as grant instead of loan at 70 per cent as received. This would be Rs 881 crore for 2015-16 and Rs 1,124 crore for 2016-17. The average would be Rs 1,002 crore per year and for five years this the total would be Rs 5,010 crore.
Accordingly, the State Government sent proposals to the Department of Economic Affairs (DEA). Of this, Rs 8,349 crore worth of projects were given in-principle clearance by external agencies. Projects worth Rs 18,857 crore were recommended to external agencies by the DEA and the balance Rs 7,611 crore worth projects were pending DEA and external agencies’ clearance.
The State Government was anticipating about Rs 20,010 crore as assistance from the Centre under special assistance measures. It said it might not able to spend this amount on EAP projects in the stipulated five years. In this backdrop the CM would request the Prime Minister to permit it to clear other outstanding loans towards EAPs, small savings and NABARD.
Also it should be allowed to borrow from internal lenders like NABARD, HUACO and other commercial banks. It could use the gap to pay interest commitments to the Central Government, NABARD and EAPs.
Since the repayment responsibility of EAPs would be taken up by the Centre, the liability of EAPs could be taken out from the accounts of AP Government so that it would not form part of the FRBM limit.
