Economy Sep 21, 2012
Hyderabad: Cash-starved Andhra Pradesh is finding it tough to honour the Congress high command's directive on increasing the subsidised LPG quota from six to nine cylinders per family a year.
The government, that is surviving by selling its securities every month to raise funds, is not in a position to foot the additional subsidy bill on LPG, sources said.
Preliminary estimates suggest that the state government will have to bear a staggering Rs 1,500 crore per annum as subsidy if the LPG cylinder quota is increased from six to nine for the 1.6 crore connections.
Already the state is spending Rs 250 crore per annum as subsidy at the rate of Rs 25 per cylinder (after the Centre previously enhanced the cylinder price by Rs 50).
"It's not a small thing...we will have to shell out Rs 1,500 crore," a minister said.
On 17 September, Chief Minister N Kiran Kumar Reddy categorically ruled out increasing the subsidised cylinder quota from six after some ministers raised the issue.
"We don't have the money. Our financial situation doesn't permit it," he asserted.
However, the Congress high command's directive to the state governments ruled by the party came two days later.
When tried to question about this last night, the chief minister declined to answer.
State Civil Supplies Minister D Sridhar Babu said that they were yet to officially receive any communication from the Congress high command on increasing the LPG quota.
"We are working on it," he added, without saying whether or not the government will implement the high command's order.
The government sources admit that the state's financial health is "too fragile" to bear any additional burden.
"We are already giving various benefits worth Rs 26,000 crore every year to eight crore population in the state. Further increasing in the subsidy bill will be unbearable," he said.