Hyderabad: The Andhra Pradesh government is facing its worst financial crisis in a decade. For the first time, the AP government has taken a Rs 490 crore “ways and means” advance from the Reserve Bank of India in the January. Additionally, the Centre, in its communication to the state government, has announced that it will not release Rs 2,500 crore for the last quarter of the current financial year for schemes sponsored by the Centre. The AP government is not in a position to pay salaries to staff for January, said Chief Minister N. Chandrababu Naidu in Delhi two days back.

The government has issued verbal instructions to the finance department not to pay any bills until  further orders. The state government has precipitated the crisis by spending Rs 3,000 crore in January, with Rs 1,500 crore sanctioned to the industries sector towards arrears of various concessions, and power subsidy for the last 10 years. Enhancement of pensions has added a burden of Rs 1,050 crore.  The government also distributed Rs 1 crore to each district as a Sankranti gift. The government also spent Rs 50 lakh on the pre-Budget meeting in Vijayawada.