IAS officers caution PM Modi that AP, Telangana can go bankrupt

The freebie culture in States such as Andhra Pradesh is unsustainable, secretaries have reportedly told Prime Minister Narendra Modi recently. As per a ToI report, doles and freebies announced/promised by state governments are not good for the financial health of the respective states in the long run. 

Besides AP, Telangana was also mentioned by secretaries in a review meeting with the PM. The other States mentioned are Delhi, Punjab, and West Bengal. In the main, promise of free power has been flagged. The IAS officers opine that these States have got a precarious financial position. 

It is not known if the secretaries flagged Telangana for what might happen in the State in the future. As of now, its financial position looks good. The state’s borrowings are within the limits prescribed by the FRBM Act. However, recently, a CAG report said, “For the second consecutive year since the formation of Telangana, the state recorded a revenue deficit of Rs 22,298 Cr in 2020-21. The deficit was Rs 6,254 Cr in 2019-20.” 

As for Andhra Pradesh, the CAG recently said that the Jaganmohan Reddy government has resorted to excess disbursements of Rs 1.1 lakh crore without legislative authorization since its tenure began.