Hyderabad,Nov 25: Andhra Pradesh,the state that boasts of a Rs 1.05 lakh crore Budget for the 2009-10 financial year,now hardly has cash reserves that are sufficient to meet the salary bill for the next two months.According to the official sources the deficit in the state finances till this month stands at Rs 4,040 and crores.At a high level meeting convened at the secretariat here on Tuesday,Chief Minister K Rosaiah urged the officials to look for ways to raise the resources so as to meet the required deficit.The poor collection of land revenue and the waiving of taxes to the farmers in the flood hit areas has caused a severe blow to the state coffers,said the CM.
On the other had the global economic meltdown dealt a telling blow to the state economy as well resulting in a severe shortfall in revenues,he added .According to the official sources the government is further crippled as it owes Rs 3400 crore to contractors executing various projects under the ambitious Rs two lakh crore irrigation development programme – Jalayagnam.This has virtually brought the project works to a halt as the contractors are unwilling to execute works without cash flowing.Though the state government was spending significant amounts on populist schemes like housing, free power, health insurance,Rs 2-a-kg rice and several others,it somehow managed to run the show in 2006-07 and 2007-08 financial years as it sold away hundreds of acres of government lands and raised about Rs 20,000 crore.
The incentive (to farmers) bill alone touched Rs 1750 crore this year, as against Rs 800 crore initially estimated. At the same time, revenues through commercial taxes took a dip because of the economic slowdown while revenue from excise alone has been keeping the cash registers ringing, highly-placed official sources explained.