Naidu stops work to pay staff salary

Andhra Pradesh Chief Minister N. Chandrababu Naidu has stopped funds for all development works in the state.

Speaking to the media at the Secretariat on Tues-day, Mr Naidu that all developmental works had been stopped as it was becoming difficult for the government to pay the salaries of the staff.

The state government has directed all the departments not to pay any bills.

Mr Naidu said that it was common knowledge that the state government was facing finance problems, but he was trying to keep his promises given to the people by mobilising resources. He added that the Centre had committed funds to fill the budget deficit.

Speaking to the media separately, Andhra Pradesh finance minister Yanamala Ramakrishnudu said that the deficit in the budget was increasing, it had reached around `20,000 crore from `15,500 crore and this was a big problem.

AP finance minister Yanamala Ramakrishnudu said that the AP government was giving priority to matching funds for the Centresponsored schemes and was thus not being able to spend on capital expenditure as had been mentioned in the budget.

He said that the government had allotted `7,000 core for capital expenditure but had spent only around `2,000 crore. He added that the government had stopped development works and salaries would be paid if necessary by borrowing. He also said that imposing fresh taxes was out of the question though he hinted at a possible hike in power charges.

Mr Ramakrishnudu said that due to decrease of petrol and diesel rates, the government had lost `400 crore in the last seven months and like other states, the AP government too had taken a decision to increase tax on petrol and diesel.

AP Chief Minister N. Chandrababu Naidu, meanwhile, accused the previous Congress governments in the state and the Centre for the present financial crisis. He said that the Centre was also facing financial problems but the state was trying to get funds from the Centre.

He denied allegations that decisions like paying 10-year-old arrears of `1,500 crore to industries had led to the present financial crisis. He said that the previous Congress government had neglected to pay the subsidies and concessions to industries; to build confidence among industrialists the government had decided to pay the arrears.

Mr Naidu said, “I am an optimist, I am doing my best to get funds and Special Category status. In the last seven months, I have visited Delhi five to six times to discuss funds and other issues with the Centre.”

He added that he was hoping that the Centre would announce a financial package soon.

Government had allotted 7,000 core for capital expenditure but spent only 2,000 crore.