The NDA government at the Centre has sought an explanation from the Y S Jagan Mohan Reddy government in Andhra Pradesh on obtaining huge loans from the banks and financial institutions by mortgaging government assets and escrowing future revenues of the state with them.
In a letter to state principal secretary (finance) three days ago, a Union finance department official recalled a letter written by the state government on April 24 stating that Andhra Pradesh State Development Corporation (APSDC) had raised Rs 18.500 crore from financial institutions by escrowing the state government’s future revenues during the financial year 2020-21.
Surprisingly, the letter also referred to a complaint lodged by rebel YSR Congress MP Kanumuru Raghurama Krishnam Raju with the Union finance minister and also a news report published in a local English daily.
Quoting the complaint, the Union finance department official said it had come to the notice of the Centre that the district collectorate, tehsildar offices and other government buildings had been transferred to Andhra Pradesh State Development Corporation (APSDC) with a plan to mobilise loans to the tune of Rs 1600 crore by mortgaging such government assets.
“The same was reported in the English daily,” he pointed out.
Raju was also quoted to have complained to Prime Minister Narendra Modi that Andhra Pradesh government was borrowing funds by incorporating new corporations by concealing the information to the Government of India by violating all the existing norms of FRBM and other borrowing and guarantee guidelines in vogue.
The official said prima facie, the pledging of future tax revenues appears to be not in consonance with the Article 266 (1) of the Constitution.
Further, some of the provisions of the Andhra Pradesh State Development Corporation Act, 2020 appear to be violating the provisions of Article 293 (3) of the Constitution.
“It is requested to kindly provide comments in this regard,” the official said to the state government apart. He also asked all the details of the loans raised by the state government undertakings and the revenue sources which have been pledged escrowed to repay the aforesaid loans may also be provided.
