AP sets up entity to finance social,economic development projects

The cash-starved Andhra Pradesh government on Thursday, had established the AP State Development Corporation (APSDC), a new avenue to borrow more money and channelize donations from different sources.

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Among the core activities of the APSDC will be receiving any grants and donations from the state and Central governments or their undertakings, foundations, charitable and philanthropic organisations across the globe, funding from multilateral/bilateral development agencies or from institutions and persons.

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The new entity will be a 100 per cent state-owned Public Limited Company with the mandate of planning, funding and financing social and economic development projects and activities in the state, a top official said.

The states debt burden increased to Rs 3.02 lakh crore at the end of March 2020,up from Rs 2,58,928a year ago, and is expected to shoot further up to Rs 3,48,998 crore in the current fiscal, as per the Budget estimates.

The state government is doling out a staggering sum of over Rs 75,000 crore in cash to different sections of the society this year but an estimated revenue deficit of Rs 18,434 crore and a fiscal deficit of a whopping Rs 48,295 crore have literally left it scampering for cash for the freebie schemes.

With the ongoing crisis triggered by the coronavirus pandemic, the states revenues have been showing a considerable decline so far this year, already forcing the government to raise different taxes to bridge the gap.

As the borrowings have already crossed the Fiscal Responsibility and Budget Management Act limits, the government has been forced to look at alternative means to raise resources.

"Andhra Pradesh requires continued availability and allocation of funds for targeting and attaining key socio- economic Sustainable Development Goals and ring-fencing the same from competing demands," said the APSDC.

To enable the APSDC to implement the designated goals and meet its funding and debt-servicing obligations, the government will identify and dedicate the requisite resources, comprising existing and new revenue streams, through the levy of new/additional taxes, cesses, fees and charges," Principal Finance Secretary (PFS) Shamsher Singh Rawat said in an order.

The SDC would mobilise resources from financial institutions, investors, contributors and others, raise money from capital markets (domestic and international), money markets and other instruments, the PFS, who will also be the Vice-Chairman and Managing Director of the new body, said.

The state Chief Secretary will be the chairperson of the new company with four other senior bureaucrats as directors.

"Independent directors will be appointed in due course of time while a professional management team will be appointed to manage the day-to-day affairs in line with the industry best practices," Rawat added.

(Image Credits:PTI)