Hyderabad, June 26 (UNI) Former Andhra Pradesh chief minister YS Jagan Mohan Reddy has slammed the TDP-led coalition government for lacking financial discipline and disregarding the Constitutional framework following the issuance of non-convertible debentures (NCD) by Andhra Pradesh Mineral Development Corporation (APMDC).
Reddy accused the state government of exceeding half of the sum borrowed by the previous YSRCP government in five years in just 13 months through its budget and off-budget borrowings.
Taking to ‘X’ Reddy wrote, “It is learned that on 25th June, APMDC concluded the second tranche of its NCD (bond) issuance at a coupon (interest) of 9.30 percent and raised Rs5526 crores, taking the aggregate value of the issuance to Rs 9000 crores… Further, it is quite apparent that the proceeds of the issuance would be utilized for financing government revenue expenditure.”
He added that as an additional security for the NCDs (bonds), the TDP government also mortgaged the state’s mineral wealth, which is government property worth Rs 1,91,000 crores of NCD (bond) issuances of aggregate value of Rs 9000 crore.
The former chief minister further accused the state government of flouting Constitutional norms and allowing access to private parties to the Consolidated Fund of the state through RBI’s direct debit mandate.
He said with permission to access the State Consolidated Fund and mortgage of government property with high value, these NCD bonds should have been more secure than the SDL issued by the government but that was not the case.
“Despite this, the APMDC NCDs (bonds) were issued at coupon (interest) rates as high as 9.30 per cent, which is 2.60 per cent higher than the prevailing SDL (State Development Loan Bonds) rate,” he said.
Questioning Naidu on the alleged financial indiscipline, Reddy further asked, “Owing to the high rate of interest, the additional yearly burden on the APMDC is to the tune of Rs 235 crores and the term of NCDs is understood to be 10 years. Can N Chandrababu Garu answer who pocketed this?”
“With this NCD issuance, the total Budget and Off Budget borrowings availed and secured in this 13-month period by the TDP alliance government exceeded 50 per cent of what was borrowed by the previous government over a 5-year period,” said Reddy who was also accused of resorting to financial indiscipline and indiscriminate borrowing during his tenure.
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