Amaravati: With its finances under strain, the state government established the AP State Development Corporation (APSDC) on August 27 as a new avenue to borrow more money and channelise donations from different sources. Money borrowed by SDC will not come under the Fiscal Responsibility and Budget Management Act limits, providing a major relief to the state government as it is set to raise more loans to meet its needs, including payment of salaries.
It approached various banks for borrowing sums between Rs 15,000 crore and Rs 25,000 crore this financial year, stating that the money thus generated would be spent on the fully neglected infrastructure development works. “Of course, some of the money will be routed for revenue expenditure (welfare schemes) as well, but most of it will be used for capital works only,” a top official said.
Income from sale of liquor, the enhanced cess on petroleum products and other taxes hiked in recent months would be escrowed to the SDC as a guarantee for the bank loans, the official added. The state government has already mobilised about Rs 40,000 crore through borrowing from various sources in the first four months of the fiscal against the target of Rs 48,295.58 crore during 2020-21, official data revealed.
