new delhi, june 26
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 in light of the Andhra Pradesh Mineral Development Corporation (APMDC) issuing non-convertible debentures (NCDs). He accused the state government of borrowing more than half of the amount the previous YSRCP government borrowed in five years — in just 13 months through its budget and off-budget borrowings.
In a post on X, Reddy wrote, “It is learnt that the APMDC concluded the second tranche of its NCD (bond) issuance at a coupon (interest) of 9.30 percent on 25th June and raised Rs 5,526 crore, taking the aggregate value of the issuance to Rs 9,000 crore. Further, it is quite apparent that the proceeds of the issuance would be utilised 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 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 the RBI’s direct debit mandate.
He said that with permission to access the State Consolidated Fund and the mortgage of high-value government property, these NCD bonds should have been more secure than the State Development Loans (SDLs) 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 percent, which is 2.60 percent higher than the prevailing SDL rate,” he rued. 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 crore, and the term of the 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 by the TDP alliance government in this 13-month period exceeded 50 per cent of what was borrowed by the previous government over a five-year period,” said Reddy, who himself had faced accusations of financial indiscipline and indiscriminate borrowing during his tenure.
