APSDC Row: Centre Warns YS Jagan Government For Violating Constitution

The corporation has entered into agreements with five banks to raise Rs 21,500 crore debt. Used them for welfare schemes but nowhere did the govt mentioned about the loans

AP CM YS Jagan Mohan Reddy

Vijayawada: The Center while expressing many objections to the debts incurred under the name of AP State Development Corporation (APSDC), wrote a letter to the Andhra Pradesh State Government to tell the details came as a shocker.

Andhra Pradesh State Development Corporation was formed in 2020. The corporation has entered into agreements with five banks to raise Rs 21,500 crore debt. Used them for welfare schemes but nowhere did the government mentioned about the loans. With this, Public Accounts Committee Chairman Payyavula Keshav released the documents related to them.

Corporation formation, diversion of income is unconstitutional 

The Union Finance Ministry is focusing on this as complaints are also going to the Center over the AP State Development Corporation debts. After seeing the debts incurred, the state government was found guilty of violating the Constitution. The Center has directed that the establishment of this corporation be declared unconstitutional under Article 293 (3) of the Constitution. At the same time, the letter said the diversion of tax revenue to the corporation was also found to be in violation of Article 266 (1) of the Constitution. 

It is unconstitutional to pledge future income

In order to get a loan to APSDC, one has to show income to that corporation and they are required to show a way to repay. For this, the excise revenue will be diverted to the corporation. Escrow accounts are required to be opened. However, tax revenue should go to the Consolidated Fund. But without doing so they are moving directly from there to the corporation and from there to the banks. This means that all income is credited under debt. Economists have been saying for some time that this is unconstitutional. Accordingly, the Center seems to have sought an explanation on the contempt of the Constitution.

IYR, PV Ramesh warn in the past 

Before PAC chairman Payyavula Keshav disclosed the details on APSDC Corporation loans, retired IAS officers like IYR Krishna Rao and PV Ramesh, who are in charge of financial affairs declared that there was a constitutional violation in debt collection. They have earlier expressed their opinion on social media that the policy followed by the APSDC is in violation of the constitutional provisions. 

(With inputs from ABP Desam — It is a Telugu platform of ABP News. For more news, commentary and latest happenings from two Telugu states, follow https://telugu.abplive.com/)