Is Jagan Mohan Reddy Right to Criticize the TDP-led Andhra Government's Fiscal Practices?
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Synopsis
On June 26, Y.S. Jagan Mohan Reddy boldly criticized the TDP-led government for alleged fiscal irresponsibility. He pointed out concerning economic practices that may have long-term consequences for Andhra Pradesh. This deep dive explores his claims and the implications of fiscal management in state governance.
Key Takeaways
- Jagan Mohan Reddy criticizes the TDP government for fiscal mismanagement.
- High interest rates on bonds create significant financial burdens.
- Concerns raised about unauthorized access to state funds by private entities.
- Potential constitutional violations could have serious implications.
- The issuance of bonds has exceeded previous fiscal practices by the YSRCP government.
Amaravati, June 26 (NationPress) YSR Congress Party President and former Andhra Pradesh Chief Minister Y.S. Jagan Mohan Reddy, on Thursday, launched a strong critique against the Telugu Desam Party-led NDA administration, accusing it of a significant lack of fiscal discipline and a blatant disregard for constitutional norms.
He claimed that the Andhra Pradesh Mineral Development Corporation (APMDC) issued non-convertible debentures (NCDs) at an interest rate of 9.3 percent, which is 2.6 percent higher than the current state development loan (SDL) rates.
Jagan Mohan Reddy expressed his concerns on social media platform X, stating that this high interest rate imposes an additional yearly burden of Rs 235 crore on the APMDC.
He urged Chief Minister N. Chandrababu Naidu to clarify who benefitted from this situation.
“On June 25, 2025, APMDC completed the second tranche of its NCD issuance at a 9.3 percent coupon rate, raising Rs 5,526 crore, which increases the total issuance to Rs 9,000 crore. This occurred despite a High Court admission and served notices. Clearly, the proceeds will finance government revenue expenditures,” he posted on X, tagging Union Finance Minister Nirmala Sitharaman, the Prime Minister's Office, and others.
“The high interest rate means an additional yearly burden of Rs 235 crore for APMDC, and the term of these NCDs is reportedly 10 years.
The former Chief Minister accused the TDP-led NDA government of allowing private entities unrestricted access to the consolidated state fund via an RBI direct debit mandate, enabling them to withdraw funds without any state government official's action.
He emphasized that this practice violates Articles 203, 204, and 293(1) of the Indian Constitution.
“In an unprecedented move, the TDP government also mortgaged mineral wealth valued at Rs 1,91,000 crore for NCD issuances totaling Rs 9,000 crore,” he added.
“With such permissions to access the state consolidated fund and the alarming mortgage of government property, one would think these bonds are even more secure than SDLs issued by the state government,” Jagan Mohan Reddy remarked.
The YSRCP President concluded that with this NCD issuance, the total budget and off-budget borrowings undertaken in the past 13 months by the TDP-led NDA government have surpassed 50 percent of the total borrowings made by the previous YSRCP government over five years.
Point of View
The criticism from Y.S. Jagan Mohan Reddy highlights a significant concern regarding fiscal responsibility at the state level. The allegations of mismanagement and constitutional violations warrant careful examination. As the nation observes, the fiscal health of states like Andhra Pradesh can have far-reaching implications.
NationPress
26/06/2025
Frequently Asked Questions
What are the main allegations made by Jagan Mohan Reddy?
Jagan Mohan Reddy has accused the TDP-led government of fiscal irresponsibility, particularly concerning high interest rates on bonds and unauthorized access to state funds.
How much additional burden does the APMDC face?
The APMDC faces an additional yearly burden of approximately Rs 235 crore due to the high interest rates on non-convertible debentures.
What constitutional articles are allegedly violated?
Jagan Mohan Reddy claims that the actions of the TDP-led government violate Articles 203, 204, and 293(1) of the Constitution of India.
