Andhra Pradesh has reportedly become entangled in a major financial crisis with reports that the expenditure is now crossing the permissible limits. The Reserve Bank of India (RBI) has informed AP that it has now slipped into the overdraft facility with central bank
Making use of the Ways and Means facility , AP has borrowed around 700 crore from the RBI earlier in March. After that had become exhausted the state had availed Rs 145 crore on Monday (March 16), followed by Rs 117 crore this Tuesday.
This was followed by Rs 500 crore this Wednesday from the central bank while on Thursday , it has slipped into overdraft. This shows the dismal financial situation of AP and the time has come for the centre to act.
Sources say that availing these facilities wouldn’t be attracting any interest as the amounts should be repaid within a 30-day period. In case the state fails in repaying it, then the amount will be considered overdraft and after a 14-day warming period, there would be hefty interest charges.
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