Centre says no to AP's plea for funds

HYDERABAD: Much to the chagrin of the cash-starved AP government, the Centre is learnt to have not responded positively to the State's request to bail it out of the grave economic crisis, created following the bifurcation of erstwhile AP.

Days after chief minister N Chandrababu Naidu had openly claimed that the State government was not in a position to pay the salaries of its employees for January, according to highly placed sources, the Centre told the State government on Thursday that it could not give ample funds to the State as the Union government itself is facing Rs 1 lakh crore revenue deficit now, leave alone fulfilment of all the promises made to AP in the AP Reorganisation Act, 2014.

Even though the State government had written a letter to the Union Finance Ministry seeking its financial help, besides sending Principal Secretary (Finance) PV Ramesh to Delhi for the same, it is learnt that the Centre clearly told the AP government that it could not come to the rescue of the State.

The Union government itself is racking its brains on how to overcome the revenue deficit while preparing the Union budget. In fact, the Principal Secretary had camped in Delhi for three days till Wednesday and tried to convince Union Finance Ministry officials about the financial crisis the State is facing now.

Following the Centre's blunt reply to the State, the State government is understood to have begun making efforts to search for other options to fill its coffers. It also sent a memo to all the government departments asking them to follow strict financial discipline while releasing money for various works, besides imposing a blanket ban on spending of money.

'Chief Minister Naidu and Finance Minister Yanamala Ramakrishnudu, after their return from Davos, will once again request the Prime Minister and Union Finance Minister Arun Jaitley to lend a helping hand to the cash-strapped State,' said the sources.

In fact, CM Naidu, during his recent visit to Delhi, openly claimed that the State did not have funds even to pay salaries to its employees for January. After that, the State government wrote a letter to the Union Finance Ministry, seeking immediate financial aid to pay the salaries of its six lakh employees.

According to the sources, the State government requested the Centre to release Rs 2,500 to 3,000 crore in the first phase so as to pay the January salaries of its staff.

Besides, the AP government urged the Centre to give grants to construct the new capital city. The State government recently asked the Centre to release some funds immediately and provide a provision in the next annual budget for the construction of the capital city.

But causing the jitters to the AP government, the Union Finance Ministry is learnt to have told the State government that it could not come to the aid of the State.