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Andhra Pradesh Tethering On Bankruptcy After Sops Galore

Forty-seven year old Andhra Pradesh Chief Minister YS Jagan Mohan Reddy is having sleepless nights as the state tethers on the brink of financial bankruptcy. With no special status being conferred on AP, and no industries being set up the state is getting deeper and deeper into the debt trap, primarily caused by unviable freebies promised by Jagan to win the elections.  As a result, it is surviving a hand-to-mouth existence through borrowings from public sector banks. Even public sector banking finance is drying out with the Union Finance Ministry questioning the banks over such lending to AP.  Every year AP has to pay over Rs 43,000 crore as interest alone, says a government source. As per CAG report the fiscal deficit for Andhra was Rs 68,538 crore in FY 2020-2021. Jagan’s anxiety to provide 3 million homes to the poor as part of his election promise is also adding to the financial burden. Responding to a  recent Gazette notification by AP Government, realtors are up in arms as builders are expected to hand over 5% land voluntarily for public housing or give matching cost compensation to accommodate free housing accommodation for the poor. For now, welfare measures are negatively impacting the state’s finances with no real investment going in for revenue generation.