Hyderabad's economy in a shambles

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The state's finances are in a bad shape and the administration is literally leading a hand-to-mouth existence. The sorry state of affairs came to light when in reply to chief minister N Kiran Kumar Reddy's request for sanctioning Rs 1,400 crore for the Rachchabanda programme, the senior-most finance official said that if that amount is released, there will not be any money left for paying the salaries of employees including the ministers at the end of this month.

"If you insist on spending Rs 1,400 crore for the Rachchabanda programme, I am afraid we cannot pay the January salaries of government employees including the ministers," was the reply of special chief secretary, finance, G Sudhir, when the CM and his cabinet colleagues insisted on the release of funds before they visit the villages and meet the people during the Rachchabanda programme.

But the fact that Rs 1,400 crore was needed for the Rachchabanda was itself a reflection of the empty coffers of the state. "There have been no payments made in several welfare schemes during the last 10 months. The unpaid bills amount to Rs 510 crore for the housing beneficiaries, Rs 300 crore for rural pavala vaddi, Rs 300 crore needed for repair of roads, Rs 149 crore for urban pavala vaddi and Rs 140 crore for Abhayahastam and other pension schemes," said an official.

Understandably, the CM and other ministers who will take part in the Rachchabanda want to be armed with funds before going to the people as they will be flooded with queries and concerns over the pending payments. "The ministers made it clear at the meeting on Tuesday that they will not be able to face the people if they do not have the funds to give to people," said sources.

In the horns of a dilemma, Sudhir finally said he would have to check the revenue receipts for January and if it was healthy, the state can go for an advance from the Reserve Bank of India. According to the finance department officials, out of the Rs 4,180 crore targeted monthly revenue receipts, salaries and pensions would eat away about Rs 2,400 crore while repayment of loans will account for Rs 1,000 crore, leaving only a paltry amount for all other needs. Apart from this, the state would need another Rs 1,000 crore for fee reimbursement dues and Rs 500 crore for payment of various bills. And on top of all these, the revenue collections till December 2010 registered a sharp fall of Rs 2,200 crore, a drop of about 8 per cent from the targeted revenue. According to the sources, the CM assured partymen that he would ensure release of at least Rs 1,000 crore for the programme.


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