It is an open secret that the Andhra Pradesh government is facing a severe financial crunch so much so that it is forced to go in for borrowings even to meet the regular expenses like salaries and pensions, forget about implementation of developmental works.
Now, the state government is faced with a peculiar situation – of providing matching grants to the central funds to implement several centrally-sponsored schemes in the state.
If there is matching grant from the state, the central funds get lapsed and the schemes are not implemented.
So, the Jagan Mohan Reddy government is now compelled to go in for overdraft form the banks to raise funds towards the matching grant for the implementation of central schemes.
The state government wrote a letter to the bankers and the union finance ministry to this effect a couple of days ago.
As of now, nearly 40 centrally-sponsored schemes are being implemented in the state. According to sources, the centre has taken serious note of the reports that the state government was diverting the central funds to other welfare schemes, as a result of which the central schemes are not being implemented in the state.
Therefore, the centre has asked the state government to operate financials related all the central schemes through a single bank, which would be a nodal agency for the same.
This bank account has to be linked to the Public Financial Management System (PFMS), which would be under the direct control of the centre, so that the diversion of central funds would not be possible.
The Jagan government has now identified State Bank of India as the single nodal agency for central schemes and informed the same to the Centre.
Now, the state has to deposit the central funds as well as the matching grant in this bank account for drawing the same for implementation of the schemes.
Since there is no money with the state government to provide matching grant for the central funds, the state government has written to various banks to grant overdraft facility for 10 centrally-sponsored schemes.
The total expenditure for these schemes is Rs 18,466 crore, of which the Centre will release Rs 11,299 and the remaining Rs 7,237 crore has to be provided as matching grant by the state government.
The schemes include Mahatma Gandhi National Rural Employment Guarantee Programme, Swachh Bharat Mission, Nirmal Bharat Mission, National Health Mission, Mid-day meals scheme, Sarva Siksha Abhiyan, PM Awas Yojana etc.
The State government indicated to the Centre that the entire process of opening account in the single nodal agency bank and linking it to the PMFS would be completed by September end.
It hopes to get overdraft facility from the banks by that time.