Palike leader blames CM for financial crisis

Palike leader blames CM for financial crisis

Addressing mediapersons, Reddy said the Government had disregarded its liability to give the Palike Rs 2,800 crore in the last three years, which led to the financial mess in the Palike. He said the Palike was supposed to receive Rs 600 crore in 2008-09, Rs 900 crore in 2009-10 and Rs 1,300 crore in 2010-11.

Reddy also blamed the Chief Accounts Officer (CAO) of the Palike for the loss of Rs 4.06 crore, which was paid as interest to the banks under hundi system.

Giving details, Reddy said the poor financial position of the Palike made it enter into an MoU with some nationalised banks a few years ago.

Accordingly, the banks would clear the bills of contractors in the event of Palike not having funds but retain 6.5 per cent of the total billing amount and the Palike would have to cl­ear the debts within six mo­nths.

The negligence on the part of the CAO led to the loss of Rs 4.06 crore, paid in the form of interest to the banks.

“This is a gross misuse of the taxpayers’ money and the CAO is answerable for it,” said Reddy.