Jagan: Govt pushing state into ‘debt trap'
Vijayawada: Former chief minister
on Thursday alleged that the state govt's lack of fiscal discipline and disregard for constitutional framework is pushing the state into a debt trap.
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He said the APMDC non-convertible debentures (NCDs) bonds were issued at a coupon (interest) rate as high as 9.30%, which is 2.60% higher than the prevailing SDL rate.
In a post on microblogging platform X, tagging Union finance minister Nirmala Sitaraman and the PMO, Jagan alleged that APMDC concluded the second tranche of its NCD (bond) issuance at a coupon (interest) rate of 9.30% to raise 5,526 crore, taking the aggregate value of the issuance to 9,000 crore on Wednesday (June 25).
He said this is second instalment of APMDC going for NCDs in violation of treasury rules. "The govt went ahead with the issuance of NCDs despite the matter being admitted by the AP high court and notices served. It is quite apparent that the proceeds of the issuance would be utilized to finance govt revenue expenditure," he said.
He further stated that the TDP-led NDA govt granted private parties access to the consolidated funds of the state through RBI direct debit mandate, owing to which, private parties can access the state exchequer and withdraw funds without any requirement of any action from the govt officials.
He alleged that it was a blatant violation of articles 203, 204 and 293(1) of the Constitution of India.
The govt also mortgaged mineral wealth worth 1,91,000 crore for NCD (bond) issuances of aggregate value 9,000 crore, Jagan further claimed. He alleged that the additional yearly burden on APMDC is to the tune of 235 crore due to the high interest rate, and the term of NCDs is understood to be 10 years. With NCD issuance, the total budget and off-budget borrowings availed and secured in this 13-month period by the TDP alliance govt exceeded 50% of what was borrowed by the previous govt over a five-year period, the YSRCP chief alleged.
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