State faces cash crunch, sends SOS for `14,000cr

THE CHIEF Minister is reportedly considering a proposal to move Supreme Court against the Central government if it denies permission to raise loans by June 4

The finance department is learnt to have sent an SOS to the state government to bring to its urgent notice the precarious financial condition being faced because of the Centre stopping loans to Telangana since April.

According to official sources, the finance department has alerted the Chief Secretary’s Office and the Chief Minister’s Office on the urgent need for mobilising `14,000 crore in the first week of June to meet emergency financial needs including payment of salaries and pensions for employees for the month of May and servicing of existing debt towards repayment of principal amount and interest in June.

Chief Minister K. Chandrashekar Rao is reportedly mulling to convene a special Cabinet meeting very soon to take stock of the prevailing financial crisis and devise future course of action to be initiated against the Centre, if it denies permission to the state government to raise loans even in June.

He is reportedly seriously considering a proposal to move Supreme Court against the Centre if it denies permission to raise loans by June 4 on the ground that the Centre has been allowing states that are ‘revenue deficit’ and that have higher debt to GSDP ratio to raise loans while denying the same to Telangana which is a ‘revenue surplus state’ and has a lower debt to GSDP ratio in the country.

Since only a day left for May to end, the finance department is clueless on how to arrange funds for salaries, pensions, debt servicing, and to meet expenditure for flagship welfare schemes such as Rythu Bandhu and Aasara pensions. Since the kharif agriculture season

starts from June 1, the state government needs to credit nearly `7,500 crore in the bank accounts of nearly 62 lakh farmers toward Rythu Bandhu.

The finance department hopes to mobilise `6,000 crore through own tax and non-tax revenues but still has to face a deficit of `9,000 crore, if the Centre denies permission to raise loans by auctioning bonds even in June.