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Government exploring ways to tackle fund crunch
State government is exploring ways to borrow money from financial institutions to continue development works amidst growing financial crunch.
Amaravati: State government is exploring ways to borrow money from financial institutions to continue development works amidst growing financial crunch.
The government, which sanctioned road works without compliance of budgetary allocations, is now prompting Roads and Building (R&B) department to take a loan of Rs 3,000 crore from any financial institution, while the Cabinet has already decided to borrow another Rs 3,000 crore for irrigation works.
Highlights:
- R&B department told to take loan of Rs 3,000 cr
- Enhances borrowing limit of APRDC
- Cabinet decides to borrow Rs 3,000 cr for irrigation works
It also approved enhancement of borrowing limit of AP Road Development Corporation (APRDC) to Rs 3,000 crore.According to a senior official of R&B department, the department is prompted to go for loans.
The government has not specified for which purpose the loan amount can be utilised. He also said they have not even identified any works and not prepared any detailed project report about the need of loan till now.
According to sources, there is tremendous pressure for funds within the department as the budgetary allocations are insufficient and the government sanctioned road works over and above the budgetary allocations. “We need more funds to meet expenditure if the additional works are to be completed” said engineer-in-chief (R&B) Rajiv Reddy.
Government made meagre allocation of Rs 210 crore in 2017-18 budget by cutting 50 per cent of funds comparing last budget (Rs 410 crore in 2016-17) to State highway works even as around Rs 930 crore has to be paid for works, which were sanctioned in last year and are in progress now.
“We have to pay at least Rs 500 crore to contractors based on progress this year for ongoing works that are sanctioned last year” a senior official said.Meanwhile, the department has taken up 437 road works and 78 bridges in 13 districts with estimated cost of Rs 2,622.42 crore.
None of these works are completed till now and the average progress of this works is only 25 per cent. “Shortage of funds and delay in payments to contractors also one of the reason for the snail’s pace of road works” said the official.
By K Varaprasada Rao
