On the last day of the 2015-16 financial year, the Central Government released a sum of Rs 1,300 crore to Andhra Pradesh under different heads, including Rs 400 crore for the two Smart Cities in the State.
Highly-placed official sources today said the Union Finance Ministry released Rs 500 crore towards bridging the revenue deficit of the State, caused by the 2014 bifurcation, and Rs 200 crore for the Polavaram multi-purpose irrigation project.
The Finance Ministry released another Rs 200 crore under other heads, they added.
The Union Ministry of Urban Development, on the other hand, released Rs 200 crore each to Visakhapatnam and Kakinada that have been selected for development as Smart Cities in the first phase.
The State Government had, in fact, sought release of Rs 2,000 crore under different heads before the close of FY16 but the Centre reportedly turned it down, the sources said.
The Union Finance Ministry prepared a list of "populist" programmes being implemented by the Chandrababu Naidu Government and submitted it to Prime Minister Narendra Modi.
This follows the State's repeated pleas for release of "revenue deficit dues" of over Rs 13,000 crore.
"After perusing the list of schemes being implemented by the State Government, the Centre has decided to cut down the grants as most of the money was being diverted to wasteful schemes," the sources said.
Also, the Union Finance Ministry has reportedly made it clear to the State that no further grants would be released unless Utilisation Certificates (UCs) in proper format were submitted for the funds already released.
"Last year, the Union Finance Ministry released Rs 500 crore for construction of Assembly, Raj Bhavan and other buildings in the new Capital Amaravati.
The State Government merely transferred the money from its account to the Capital Region Development Authority and presented a 'utilisation certificate', whereas in reality not a single rupee has been spent. Such things can't be entertained," a top official at the Centre maintained.
The AP Government did the same with regard to the Rs 1,000 crore one-time special financial assistance provided to Vijayawada and Guntur municipal corporations, he said.
"The State merely gave administrative sanction for the proposed works but submitted a UC without spending even a rupee," the official added.
Taking a serious view of this, the Finance Ministry told the State Finance Department officials that no funds would be released without proper UCs.
