Naidu hints at hard decisions to save economy

HYDERABAD: A day after he reportedly told his Cabinet colleagues that the Centre was not in a position to rescue the cash-starved Andhra Pradesh, chief minister N Chandrababu Naidu hinted at some hard decisions to regulate the ailing economy of the state.

Admitting that the state is passing through a serious financial crisis, Naidu said to bring financial discipline and to stop further deterioration of the financial condition, his government had started cutting down Plan Expenditure and put restrictions on taking up developmental works in the state.

'AP is reeling under a revenue deficit of a whopping `15,980 crore this fiscal, which the residual state acquired when Telangana was created on June 2,'' he remarked.

Addressing media persons at the Secretariat here, Naidu said the AP Reorganisation Act 2014 stipulates reimbursement of the revenue deficit in its first financial year by the Centre. But, there is no word from the Centre on the issue. Hence he had decided to cut down expenditure on developmental works.

'We have cut capital expenditure and stopped certain development works due to financial problems. If we continue with development works, there is a possibility that the financial situation of the state may further deteriorate and in future we may not be able to pay salaries to our employees,' he said.

In fact, it is an open secret that sanction of funds to all departments in AP has seen a drastic cut-down to allow the government to pay the salaries of its staff.

When asked about the reports that the Centre is in no mood to accord Special Category Status to the State, Naidu explained that the delay in according Special Category Status to the State was due to various reasons including elections in a few states.

He said he had even taken up the matter with Union finance minister Arun Jaitley at Davos recently and discussed various assurances given by the Centre to AP at the time of bifurcation such as incentives to industries and bridging the deficit budget.

Giving details about his four-day Davos tour, Naidu said the general feedback from them was that India was far behind with regard to 'ease of doing business.'

'India stands at 143rd position as far as 'ease of doing business' is concerned. The rules and regulations would have to be simplified for foreign investors to come to India,'' he added.

Stating that his government would soon come up with an investor-friendly industrial policy, Naidu said his government would announce its own package of incentives for industries.