AP to spend Rs 20 cr for Polavaram visit

The Andhra Pradesh government had decided to spend around Rs 20 crore to invite people to visit the Polavaram Project. The government would provide free transportation and food for the visitors from across the 13 districts of the State.

The visitors would have to go around and look at the progress of the project work and pat the State government. The APSRTC would be operating special busses from various destinations to the project site and the AP Tourism would coordinate the work with the help of the Water Resources Department.

The project, as per the AP Reorganisation Act 2014, has to be executed by the Central government with full expenditure. But, the State government had taken up the task of executing the work and spending from its coffers. The revenue deficit State is spending huge amount of money on the project, anticipating that the Central government would reimburse.

The irony is that the State had spent more than RS 15,000 crore on the project so far, which was borrowed from the external sources. The government would have to pay the interest to the money borrowed and the Central government will not pay this interest. The total project cost, which stood at Rs 16,000 crore initially had now gone up to Rs 58,000 crore including the rehabilitation and resettlement as per the 2013 Land Acquisition Act.

The Central government is not accepting the claims of the State government on the total project cost and the dispute is set to delay in the Central government reimbursing the cost. The delay is set to be costly for Andhra Pradesh exchequer which runs on external borrowings. The State’s debt had gone upto Rs 2.25 lakh crore this year from Rs 95,000 lakh crore at the time of bifurcation. The State government is set to go for another Rs 30,000 crore this financial year, though the Fiscal Responsibility and Budget Management (FRBM) Act 2003 is not amended giving relaxation to the State government to go for borrowings beyond the limits of the GDP.

There is no financial discipline in Andhra Pradesh and the Finance Minister Yanamala Ramakrishnudu himself had admitted that the State was running on external borrowings, which is not good for the economy. External borrowing without internal revenue is not a good sign of healthy economy and AP spends more on travel of the Chief Minister and events like this. Given this style of financial indiscipline, it would be highly impossible for the government to survive. But, there is no one to see that this government follows the fiscal discipline.

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