Old ties and bonhomie between Telangana CM Revanth Reddy and Andhra Pradesh CM Chandrababu Naidu has resulted in a huge financial loss for Telangana. The Telangana exchequer has reportedly incurred a loss of Rs 2,500 crore due to political maneuvers and actions orchestrated by Chandrababu Naidu in Delhi.
It is alleged that Naidu assured the Central government that Andhra Pradesh had covered Telangana’s share in loans taken from foreign banks during the united state period. Consequently, the Central government unilaterally diverted Rs. 2,500 crore from funds due to Telangana and transferred it to Andhra Pradesh.
Despite the gravity of this situation, neither CM Revanth Reddy nor any cabinet minister has responded on the issue. Officials within Telangana’s Finance Department are reportedly distressed by these developments, citing that the decision contradicts the intent of Section 54 [1] of the Andhra Pradesh Reorganization Act, 2014.
Experts highlight that Section 54 [1] of the Act clearly states that during the bifurcation of the state, both assets and liabilities should be proportionally divided between Telangana and Andhra Pradesh. This includes loans from the central government, domestic organizations, and foreign institutions like Japan’s JICA and the World Bank, with an estimated total of Rs. 30,000 crore from foreign banks.
The transfer of debt should consider factors beyond just the location of projects or utilization of funds. After Chandrababu Naidu came to power in 2014, he reportedly restructured loans for around 15 projects, advocating for a distribution based on consumption for nine projects, location for four projects, and population for two projects. However, the BRS government insisted on a population-based distribution under Section 54 [1], thwarting Naidu’s efforts.
The situation took a sharp turn following a meeting between the CMs of both states on June 6 this year. According to BRS leaders, Chandrababu Naidu initiated a strategic move by appealing directly to the Union Ministry, alleging that Telangana had not paid its share for projects like the Inner Ring Road and Hussain Sagar, which were funded by foreign loans during the united state period.
He claimed that Andhra Pradesh had covered these costs, prompting the Centre to divert Rs. 2,500 crore from Telangana’s Consolidated Fund to Andhra Pradesh. Telangana’s financial officials are reportedly dismayed by this development, questioning the legality of transferring funds while the issue of Telangana’s debt share remains unresolved with the Centre.
The situation raises serious questions about the role of the Congress government in addressing this issue. Chief Minister Revanth Reddy and Deputy Chief Minister and Finance Minister Bhatti Vikramarka, who are currently in Delhi, are under pressure to address the diversion of funds.
Telangana has previously struggled to reclaim Rs. 454 crore in Centrally Sponsored Scheme (CSS) funds from the 2014-15 financial year, which were deposited in Andhra Pradesh’s account. Despite repeated requests, the Centre has not returned these funds. Now, with the recent diversion of Rs. 2,500 crore, questions are being raised as to why CSS funds cannot be similarly redirected from Andhra Pradesh’s Consolidated Fund to settle outstanding debts and electricity dues owed by Andhra Pradesh to Telangana.