Soon after taking oath as new Chief Minister of Andhra Pradesh today, Jagan requires Rs 5,000 crore to run the government.
Shockingly, the AP government's treasury now has reserves of just Rs 100 crore. This shocking news was conveyed to Jagan by the finance department officials before taking the oath.
The government needs to pay salaries and pensions for state government employees on June 1 besides payment of social security pensions for poor in the first week of June.
Jagan has no option left but to go for 'overdraft' and mobilise funds from RBI.
During his final days as CM in April, Chandrababu Naidu resorted to indiscriminate wastage of public money with a view to buy votes from beneficiaries of welfare schemes.
Naidu announced new schemes every day left, right and centre, like Pasupu kumkuma, Annadhata Sukhibhava etc and deposited thousands of crores of rupees in the bank accounts of beneficiaries.
While this splurging of money did not fetch any votes for Naidu, it made the treasury empty now.
The AP government was eligible to avail Rs 5,000 crore loan from RBI by auctioning security bonds for the period April to June.
Even in this, Naidu already secured Rs 4,000 crore loan in April and May and distributed to beneficiaries of pasupu kumkuma, annadhata sukhibhava schemes etc.
Jagan can now take just Rs 1,000 crore loan from RBI, that too after mid-June as RBI will not allow back-to-back loans within a gap of few days.
Poor Jagan, has made several promises to win elections. This requires huge money to implement.
But the present financial condition of AP government is so worse that it is not in a position to pay even salaries for staff on June 1, if it fails to take loans from RBI or banks or other financial institutions.
The joy of becoming CM will not last for Jagan even for one day as employees will protest if he fails to pay salaries on June 1.