Jagan Reddy accuses Andhra Pradesh government of Rs 9,000 crore bond scam
Former Andhra Pradesh chief minister YS Jagan Mohan Reddy, has accused the ruling Telugu Desam Party (TDP) alliance government of gross financial mismanagement and constitutional violations in connection with the recent non-convertible debenture (NCD) issuance by the Andhra Pradesh Mineral Development Corporation (APMDC).In a post on X, Jagan Mohan Reddy alleged that the current government displayed 'a lack of fiscal discipline and disregard for the Constitutional framework'. He pointed to the second tranche of NCDs issued by APMDC on June 25, which raised Rs 5,526 crore at a coupon rate of 9.30 per cent. With this, the total amount raised through bond issuances stands at Rs 9,000 crore.advertisementJagan contended that the issuance went ahead despite the matter being sub judice, with the Andhra Pradesh High Court having admitted the case and notices having been served. He alleged that the funds were intended to finance the government's revenue expenditure, in breach of constitutional guidelines.
He further claimed that the TDP alliance government had, in an 'unprecedented manner', enabled private entities to gain direct access to the Consolidated Fund of the State through a Reserve Bank of India (RBI) direct debit mandate. According to him, this allowed private parties to withdraw money from the state treasury without the involvement of government officials — a move he described as a 'blatant violation' of Articles 203, 204, and 293(1) of the Constitution of India.As additional security for the bonds, the government allegedly mortgaged mineral assets valued at Rs 1.91 lakh crore to back NCD issuances of just Rs 9,000 crore. Reddy criticised the disparity, suggesting that the bonds were more securely backed than even the State Development Loans (SDLs) but were still floated at an unusually high interest rate.advertisementHe questioned why, despite such high-value security, the APMDC bonds bore a 9.30 per cent coupon rate — 2.60 per cent higher than the prevailing SDL rate — resulting in an additional annual burden of Rs 235 crore. Over the 10-year tenure of the bonds, this would amount to a substantial financial load on the public sector enterprise.Tagging Andhra Pradesh Chief Minister N Chandrababu Naidu in his post, Jagan demanded, 'Can @ncbn Garu answer as to who pocketed this?'He concluded by noting that the total budgetary and off-budget borrowings under the TDP alliance in the past 13 months had already exceeded 50 per cent of the borrowings incurred by the previous government over its entire five-year term.- Ends
IN THIS STORY#Andhra Pradesh
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