Govt Asks RBI for Ways and Means Advances

By VV Balakrishna - HYDERABAD

Published: 23rd April 2014 09:36 AM

Last Updated: 23rd April 2014 09:36 AM

The State government is in touch with the Reserve Bank of India (RBI) for securing ‘Ways and Means Advances’ for both Telangana and Residuary Andhra Pradesh states right from the day one of the formation of the two states.
This is because the new states should not face any cash crunch for normal  administrative works.
‘’The Ways and Means Advances issue is under the consideration of the RBI,” said sources in the finance department. However it was for the new states to decide whether to utilise the ‘Ways and Means Advances’ or not, they added.
‘’The state never went for ‘Ways and Means Advances’ for the last several years. But, in case the new states want to go for a loan from the RBI, they can do so,” the sources said.
The united state is eligible to take `3,000 crore as ‘Ways and Means Advances’. The new state governments will be eligible to get approximately Rs 1,500 crore each under the fund. The amount should be repaid to the RBI within 15 days or else the RBI would charge a nominal interest rate on the loan portion.
Sources in the finance department said that Telangana would be a surplus state, whereas the residuary Andhra Pradesh would be a deficit state.
‘’All the departments have divided the vote-an-account budget. Ninety per cent work is over. The remaining 10 per cent work will be completed within a week. The exact surplus of Telangana and the  exact deficit of AP will be known in the next 10 days time,’’ an official said.
If the deficit of AP was around Rs 8,000 crore, then the surplus of Telangana would be around `8,000 cr, he explained.
Meanwhile, around 2,000 state government employees will be   retiring on May 31. Normally, the terminal benefits will be cleared within 10 days after the retirement. As the employees will face problems after the division of the state, the government has decided to settle the accounts of employees retiring on May 31 on the retirement day itself.
Meanwhile, an agreement between the officials of the RBI and the governor will be signed soon to open a bank account for the Telangana state. The T-state government account will be opened in the SBH, whereas the residuary AP’s account will continue in the SBI.