The Hindu : Andhra Pradesh News : State to borrow Rs. 16,000 crore

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Andhra Pradesh

Andhra Pradesh

State to borrow Rs. 16,000 crore

Special Correspondent

Move necessitated due to dip in revenue from land sales

HYDERABAD: In a formal acknowledgment of its deteriorating financial health, the State government has resolved to amend the Fiscal Responsibility & Budget Management Act (FRBM) to facilitate borrowing of a huge sum of Rs. 16,000 crore and bridge the revenue gap. The borrowing has become necessary as the revenue from land sales fell short by Rs. 8,500 crore from the Rs. 12,000-crore target projected in the budget, Information Minister A. Ramnarayan Reddy told reporters after a meeting of the Cabinet here on Saturday. Disclosing that the amending Bill would be introduced in the forthcoming Assembly session, he maintained that the borrowing would not cause any dent in the budget.

Benchmarks achieved

Andhra Pradesh, like other States, was entitled to raise loans up to certain limit under FRBM but it did not use this facility for the past four-and-half years as its economy was healthy. The State, indeed, achieved the benchmarks prescribed by the 12th Finance Commission for three years now in a row.

The borrowing would be made now to boost public expenditure in the face of the global economic slowdown. Chief Minister Y. S. Rajasekhara Reddy discussed the issue with the Prime Minister during his recent rip to Delhi, he said. The Cabinet sanctioned 34 posts required for setting up a separate ITDA for the tribals in plains.

It approved the draft Bill to introduce a legislation replacing an ordinance promulgated for extension of the period of ban on no-trust move against Mayors and Municipal Chairmen, to four years from three.

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