Hyderabad, Mar 17 (PTI) Telangana Chief Minister A Revanth Reddy has said his government is facing a cash crunch due to the debt burden and other factors, and that it has been able to pay salaries to employees after obtaining a "hand loan" of Rs 4,000 crore from the RBI.

Speaking in the Legislative Council recently, he urged the government employees to cooperate with regard to payment of Dearness Allowance (DA) and others in view of the difficult cash situation though salaries would be paid on the first of every month.

"It becomes difficult to pay salaries on the first of every month. I appeal to our government employees from here....to serve the government, taking salaries on the first of every month. Sometimes, (we have to take a) hand loan from Reserve Bank... I paid salaries on the first by taking a hand loan of Rs 4,000 crore," he said.

Noting that the government belongs to the employees, he said he would place all the facts and figures with regard to the financial situation before them so that they can give their views on payments.

The DA and other benefits are the right of the employees, he added.

Speaking at an event here on March 12, Reddy had said the lion's share of the state's revenue is spent every month on salaries, pensions, and servicing the huge debt incurred during the previous BRS regime, making it challenging to allocate funds for welfare programmes.

He had alleged former Chief Minister K Chandrasekhar Rao had left the state's financial situation in a dire state, comparing it to "cancer." Using a Hyderabadi expression, he described the financial crisis as "upar sherwani, andar pareshani" (looking good on the outside, but troubled within).

Reddy stated that while the state government generated Rs 18,000 crore to Rs 18,500 crore in revenue every month, Rs 6,500 crore is allocated to salaries and pensions for government employees.

Another Rs 6,500 crore is used to service the debt incurred during the BRS regime, leaving the government with only Rs 5,000 crore to Rs 5,500 crore, he said.

There are around 30 government welfare schemes that require funding every month, in addition to the financial demands of various development projects, he pointed out.

The government is managing the situation through staggered payments to different schemes and programmes, Reddy had said. PTI SJR VVK SA ROH

State debt burden prompts RBI loan to bridge salary payments amid constrained fiscal allocations and employee DA concerns. The government acknowledges a significant debt burden and the use of an ad hoc RBI loan to meet salary obligations when monthly cash flows are inadequate; recurring revenues are largely apportioned to salaries, pensions and debt servicing, leaving limited funds for welfare schemes, and the administration is managing cash constraints by staggering payments while affirming employee rights to Dearness Allowance and committing to disclose fiscal figures.