Tadepalli, July 11: On behalf of the YSR Congress Party, I raised pointed questions through a press conference regarding the unconstitutional borrowing through bonds by the Andhra Pradesh Mineral Development Corporation (APMDC) to the current Finance Minister, Shri Payyavula Keshav. However, instead of providing direct answers, the Minister appears to be irritated. During a party event in Anantapur, he made statements from a village that not only confused the local people but also pushed the entire state into further confusion, attempting to obscure the facts.
1. We questioned how the state treasury was directly used to facilitate funds for lenders in an unprecedented manner, but the Minister has not provided straightforward answers.
2. The Minister claimed that the YSRCP government also planned to raise Rs. 7,000 crore through bonds via APMDC but failed, and out of frustration, we are making baseless allegations against the current coalition government. The Minister needs to understand that it is an undeniable fact that no borrowing through bonds was undertaken by APMDC during the YSRCP government.
3. Although a Government Order (GO) was issued with the intent to borrow through APMDC, it was never implemented. The key points the Minister should note in this GO are that, unlike the current coalition government, the YSRCP government did not pledge the state treasury as collateral for the proposed loans. Instead, three strict conditions were laid out.
4. The first condition was that loans taken by APMDC were meant solely for the corporation’s business development, and only the required amount should be borrowed at any given time. The second condition clearly stated that the government would not be responsible for the loans at any point, and the repayment burden would solely fall on APMDC, with no connection to the government. The third condition was that the management, utilization, and repayment of the loans were entirely entrusted to the Managing Director of APMDC, meaning the government had no responsibility for loan repayments. It is also noteworthy that no borrowing was undertaken under this GO, and no attempt was made to issue bonds.
5. However, the current government has not only allocated mines to APMDC but also raised loans through bonds, diverted those funds to the government instead of using them for APMDC’s business growth, and indirectly placed the repayment burden on the government. This was done by allowing lenders to directly access the state treasury and borrowing at an interest rate of 9.3%. Additionally, the state’s mineral wealth worth Rs. 1.91 lakh crore was pledged as collateral. This is why these bonds were oversubscribed. If APMDC alone were responsible for repaying the loans, these bonds would not have been oversubscribed. On behalf of the people of the state, we are issuing this warning, keeping the state’s financial future in mind.
6. In contrast, when we issued bonds worth Rs. 2,000 crore through the AP Beverages Corporation in June 2022 without pledging the state treasury or assets, those bonds were oversubscribed four times, enabling us to raise Rs. 8,300 crore. This reflects our efficiency and credibility.
7. It is unfortunate that the current government portrays such reckless and dangerous borrowing as a great financial strategy or a masterstroke for the state’s benefit, while praising itself
8. In the past, you borrowed more than we did, yet portrayed us as the ones who borrowed excessively. Now, you are taking on massive loans, causing financial destruction, and claiming it as a great achievement. The new destructive approach of borrowing through APMDC bonds is even more deplorable.
9. Instead of addressing such critical issues with irritation from a party event in a village and avoiding direct answers, we hope the Finance Minister will come to the state secretariat, calmly review all the points we have raised, and make a prudent decision.
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