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Speech of

Sri K. Brahmananda Reddy

Hon'ble Finance Minister while Presenting

The Budget for 1959-60

To The Andhra Pradesh Legislative Assembly

on the 20 th February 1959.




I rise to present to the House the Budget of Andhra Pradesh for the year 1959-60.

Before proceeding with the review of the financial position and presenting my budget proposals for 1959-60, I should like to say a few words about the progress generally made by our State during the last few years.

Andhra State, as we all know, was first formed in October 1953, with modest revenues, a fairly heavy burden of public debt and great expectations about the future. In November 1956, the State was enlarged by the addition of the nine Telangana districts of the erstwhile Hyderabad State. This reorganisation brought in its wake numerous problems, such as, the evolution of an integrated administrative set up, unification of laws, procedures, etc., rationalisation of the tax structure in the two regions and, above all, the creation of a sense of security among the service personnel drawn from the erstwhile State's of Andhra and Hyderabad.

I am glad to say that a number of these problems have been satisfactorily solved. Expect for maintaining separate figures of revenue and expenditure for the two regions of Andhra and Telangana as promised by my predecessor, and required according to the understanding reached before the formation of the new State of Andhra Pradesh, the finances of the two regions have been fully integrated. The relevant rules and procedures have also been suitably modified in order to bring about the requisite uniformity. Other departments of governments are also actively engaged in the preparation and introduction of uniform laws, rules, etc., in their respective fields of administration. The State Government have accepted and implemented all the suggestions of the Government of India regarding protection to the service personnel from Hyderabad State in the matter of conditions of service, such as, emoluments and scales of pay, leave, pension, etc. A good deal of precious time was, however, spent on attending to these problems.

The progress of the Second Five-year Plan suffered rather badly during 1956-57 and also to a certain extent in 1957-58. The situation, however, has improved considerably during the current year and we can now look forward confidently to the fulfilment of all the targets laid down in the Plan.

As a result of the yield from the taxation measures introduced during the last three years together with the grant-in-aid of Rs. 4 crores per annum under Article 275 ( 1) of the Constitution granted by the Central Government under the award of the Second Finance Commission, the chronic revenue deficits have now been practically wiped off, and the financial position of the State is now much stronger than what it was about three years back.

There is, however, no room for complacency and the future of the country as well as this State be depends entirely on continuous vigilance, hard work and sacrifice. I am confident that the people of Andhra Pradesh will always rise to the occasion and offer their best in the country's struggle for raising the living standards and laying the foundation for the establishment of a truly welfare State.

Before explaining my budget proposals for 1959-60, I shall, as usual, first indicate briefly the position of the accounts for the last year and revised estimates for the current year.

Actuals 1957-58.

Revenue and Expenditure.-The accounts for the year 1957-58 show revenue receipts of Rs. 62.33 crores while the revenue expenditure amounted to Rs. 55.11 crores, thus resulting in a net revenue surplus of Rs. 7.22 crores as against Rs. 3.12 crores anticipated in the revised estimates for that year. The increase of Rs. 4.10 crores in the revenue surplus was due to a rise of Rs. 1.24 crores in receipts and a short fall of Rs. 2.86 crores in the expenditure.

Capital Expenditure.-The total capital expenditure incurred in 1957-58 amounted to Rs. 25.28 crores against the revised estimate of Rs. 24.75 crores.

Public Debt.-Public Debt which amounted to Rs. 135.39 crores on the 1st April 1957 stood at Rs. 150.36 crores at the end of March 1958, the rise being due to the fresh loans obtained from the Government of India for financing the Plan schemes.

Deposits and Advances: -The net effect of other debt, deposits etc., transactions for the year 1957-58 was minus Rs. 2.31 crores.

Cash Balance: -According to the accounts maintained by the Accountant-General, the closing cash balance of Government on the 31st March 1958 was Rs. 3.00 crores. This figure was, however, arrived at by retaining a credit of Rs. 1.41 crores on account of the funds of the erstwhile Hyderabad State held by the Westminister Bank, London, which are under dispute. There was also an outstanding overdraft of Rs. 5.22 crores on the Reserve Bank of India on the 31st March 1958. The effective closing balance was thus minus Rs. 3.63 crores.

Revised Estimates 1958-59

Revenue Receipts: -In the Budget Estimates for 1958-59 credit was taken for a total revenue of Rs. 63.66 crores of which Rs. 3.40 crores represented Central grants for Plan schemes and the balance of Rs. 60.26 crores represented the ordinary revenues of the State. The Revised Estimates have placed the Revenue Receipts at Rs. 68.23 crores as follows:-

Rs. in crores.

Ordinary Revenue 63.83

Central grants for Plan Schemes 4.40




The improvement of Rs. 3.57 crores under Ordinary Revenue can be attributed to better realizations under the various revenue heads. The increase of Rs one crore in the anticipated Central grant for Plan schemes is due to the rising of the plan ceiling from Rs. 30.02 crores to Rs. 35 crores with consequential rise in the outlay on revenue account.

Revenue Expenditure: -The Budget Estimates for 1958-59 provided for a total revenue expenditure of Rs. 62.87 crores made up of Rs. 9.30 crores on account of Plan schemes and Rs. 53.57 crores as representing the other normal expenditure. In the Revised Estimates, the Plan expenditure is expected to be Rs. 9.81 crores while ordinary expenditure is now placed at Rs. 54.98 crores. The total revenue expenditure in 1958-59 is thus estimated to be Rs. 64.79 crores.

The Revised Estimates for 1958-59 thus reveal a revenue surplus of Rs. 3.44 crores as against Rs. 79 lakhs anticipated at the time of framing the Budget Estimates.

Capital Expenditure: -The Budget provided for a total capital outlay of Rs. 21.29 crores of which Rs. 18.21 crores were for plan schemes and the balance of Rs. 3.08 crores was for other essential items outside the Plan. The Revised Estimates amount to Rs. 21.94 crores and Rs. 2.18 crores, respectively.

Public Debt: -During the year, a public loan of Rs. 5.49 crores was floated successfully while the Central loans for Plan schemes and other schemes are expected to amount to Rs. 29.09 crores. After liquidating the outstanding advances taken from the Reserve Bank of India and paying the installments due on Central loans, the net addition to the Public debt of the State during 1958-59 would be Rs. 19.21 crores, thereby raising the total liability to Rs. 169.57 crores by the end of March 1959.

Deposits and Advances.-The debt, deposits, etc., transactions in 1958-59 are expected to result in a net receipt of Rs. 3.39 crores.

Cash Balance.-The year 1958-59 is expected to close with an accounts balance of Rs. 4.91 crores or a net effective cash balance of Rs. 3.50 crores after excluding the sum of Rs. 1.41 crores locked up in the Westminister Bank, London.

Budget Estimates 1959-60

I now turn to the Budget Estimates for 1959-60.

Revenue Receipts-In the estimates for 1959-60 credit has been taken for a total revenue of Rs. 71.29 crores of which Rs. 66.29 crores will be derived from the existing sources of taxation, etc., while Central grants for Plan schemes have been taken as Rs. 5 crores. The yield from existing sources is thus expected to record an increase of Rs. 2.46 crores over the Revised Estimate of Rs. 63.83 crores. This increase has occurred under the State's share of Income-Tax ( Rs. 23 lakhs), Land Revenue ( Rs. 86 lakhs), Registration ( Rs. 16 lakhs), Irrigation ( Rs. 24 lakhs), Central aid for expenditure on Dearness allowance ( Rs. 54 lakhs) and other heads ( Rs. 43 lakhs).

Revenue Expenditure.-The Budget for 1959-60 provides for a total expenditure of Rs. 71.66 crores on Revenue Account as against Rs. 64.79 crores in the Revised Estimates. This is made up of:-.

  Rs in crores  
I Plan expenditure 13.75
II Standing charges under ordinary heads 57.50
III Part II Schemes (Non-Plan) 0.41
  Total 71.66

Plan expenditure has risen from Rs. 9.81 crores in the Revised Estimates to Rs. 13.75 crores next year, as the overall Plan outlay in 1959-60 has been raised to Rs. 42.03 crores as against Rs. 35 crores in 1958-59.

The provision for standing charges under ordinary heads records an increase of Rs. 2.52 crores over the Revised Estimates for 1958-59, which is due largely to the full year's provision ( Rs. 3.00 crores) made next year for revised pay scales on the basis of recommendations of the Pay Committee.

The details of Part II Schemes have been given in the Finance Secretary's Explanatory Memorandum.

Revenue Deficit: - The Budget Estimates for 1959-60 disclose a revenue deficit of Rs. 37 lakhs.

Capital Outlay: -The provision for capital expenditure on Irrigation, Power, etc., schemes in 1959-60 has been placed at Rs. 28.30 crores of which Rs. 24.91 crores are for Plan schemes and the balance of Rs. 3.39 crores is for other essential items outside the Plan. Irrigation and Power, as usual, claim the major portion of the Budget provision. The total allotment under these heads has risen from Rs. 18.35 crores in 1958-59 to Rs. 19.30 crores next year.

Principal items under capital outlay are:-.

Rs in Lakhs


Nagarjunasagar Irrigation Project



Rajolibanda Diversion Scheme



Tungabhadra High Level Canal



Tungabhadra Low Level Canal



Improvement of Kurnool-Cuddapah Canal



Other Irrigation Schemes



Machkund Power Schemes



Tungabhadra Power Schemes



Telengana Power Schemes



Fertilizer Factory



Contribution to the Capital of Road Transport Corporation



Civil Works



Improvement of Public Health



Compensation to Land Holders



Other schemes for agricultural, industrial, etc., development


Loans and Advances.-Important items of loans and advances for which provision has been made in the Budget for 1959-60 are as follows:-.

Rs in Lakhs


Loans to Municipalities for Water Supply, Drainage, Roads etc., Works



Advances to Cultivators-

a. Short-term loans for supply of Ammonium Sulphate

b. Seed Multiplication and Distribution Schemes

c. Other Taccavi Advances

d. Loans under the Agricultural Loans Act






Advances for Small Scale and Cottage Industries



Loans under the Community Projects and National Extension Service Schemes



Loans for Industrial and Low-Income Group Housing Schemes



Short-term Loans to Co-operative Land Mortgage Banks



Loans to Co-operatives under the Scheme for Development of Co-operative Marketing


Public Debt.-The Budget Estimates for 1959-60 take credit for a Central loan assistance of Rs. 20.19 crores and a further sum of Rs. 10.00 crores which is expected to be raised from small savings and open market loan next year.

On the disbursements side, a provision of Rs. 11.91 crores has been made for the repayment of the loans taken from the Government of India, etc., for various purposes.

The principal items are:-.

Rs. in crores


Short-term loans for purchase of chemical manures



Instalments of principal of loans repayable on equated payment system



Andhra's share of repayment of Madras Government loans


Plan Outlay

The Second Five-Year Plan of Andhra Pradesh envisages a total outlay of Rs. 175.74 crores, against which the actual expenditure during 1956-57 and 1957-58 was Rs. 24.31 crores and Rs. 31.16 crores, respectively. Based on past performance, the Planning Commission had originally agreed to a Plan of Rs. 30.02 crores for 1958-59 which was later revised to Rs. 31.16 crores. As this would have left a big carry forward of Rs. 89.11 crores to be spent during the remaining two years of the Plan i.e., 1959-60 and 1960-61, Government decided to raise the Plan ceiling for 1958-59 to Rs. 35 crores. We hope to meet this additional outlay from our current resources without touching the reserves. All the development departments have been authorised to spend up to 20% over and above the provision fixed in the annual Plan for 1958-59. In the case of the Electricity Department, however, it has been permitted to spend up to 25% in excess of the Budget provision. The provision for Nagarjunasagar Project has been raised from Rs. 7.00 crores to Rs. 8.50 crores, the excess being met from the State's own resources.

As regards 1959-60, the Planning Commission have agreed to a Plan of Rs. 37.66 crores, which would leave a balance of Rs. 47.61 crores to be spent during the last year of the Plan. As it would have been difficult to spend the residue of Rs. 47.61 crores in the fifth and final year of the Plan for reaching the Plan target of Rs. 175.74 crores, the Government after due consideration have decided to raise the provision for 1959-60 to Rs. 42.03 crores distributed under the following heads:-.

Rs. in crores


Agricultural programmes



Community Development
























Social Welfare







A compete list of all Plan schemes, together with the provision made in 1959-60, is given in a separate volume circulated along with the Budget.

Financial Resources For Plan

At the time of framing the original estimates of financial resources for the Second Five-Year Plan, it was expected that State would be able to raise Rs. 51.10 crores as follows:-.

Rs. in crores







The balance of the funds required for financing the plan was expected to be provided by the Central Government in the shape of grants and loans. The position was recently reviewed in the light of the actual performance during the first 2 years, Revised Estimates for the current year and anticipations for the next 2 years. It is now expected that State's contribution to the resources for the Second Five-Year Plan would be of the order of Rs. 68.50 crores as follows:-.






(1) (2) (3)

(1) Contribution from Revenue







(2) Loans from Public



(3) Share of Small Savings



(4) Miscellaneous Capital Receipts



Total on Capital Account

Total Resources





On the whole, our performance in the field of taxation and borrowing has been quite satisfactory. We have not only wiped off the old accumulated deficits but are now in the happy position of providing from the State's own resources necessary funds for a Plan Outlay of Rs. 35 crores as against the original Plan of Rs. 30.02 crores for 1958-59. While the State's contribution to the resources for the annual plans has risen from year to year during the last 3 years, Central assistance in the shape of loans and grants for the State Plan has remained practically stationary at about Rs. 19 to 20 crores per annum. According to the present estimates, we expect to raise about Rs. 15.92 crores for the Plan Outlay in 1959-60, while Centre's contribution would be Rs. 19.00 crores. To this should be added Rs. 3.50 crores representing the effective opening cash balance on 1st April 1959. The total resources in sight for the next year's Plan are thus Rs. 38.42 crores. Against this, the Budget provides for a Plan Outlay of Rs. 42.03 crores in 1959-60. There is thus an overall gap of Rs. 3.61 crores the resources for plan expenditure next year. This will be partially met from the proceeds of the changes proposed in the rate structure of taxes on passengers and goods regarding which a Bill is already before the assembly. This measure is expected to yield about Rs. 75 lakhs next year. The rest of the gap will have to be met by other suitable means.

Ways And Means

The year 1958-59 opened with an accounts balance of Rs. 3.00 crores inclusive of an amount of Rs. 1.41 crores held in the Westminster Bank, London. There was also an outstanding overdraft in the account of the Government with the Reserve Bank of India amounting to Rs. 5.22 crores on first April 1958 was therefore minus Rs. 3.63 crores. The Revised Estimates for 1958-59 reveal a revenue surplus of Rs. 3.44 crores and a deficit of Rs. 1.53 crores on capital at which means an over all surplus of Rs. 1.91 crores. Adding this to the opening balance, the year will close with an accounts balance of Rs. 4.91 crores including the funds locked up in the Westminster Bank. This improvement in the cash balance position is dues partly to the revenue surplus of Rs. 3.44 crores in 1958-59 and partly to the change in the procedure for disbursement of central assistance. In the past the loans and grants from Central Government were paid on arrear basis with reference to the progress of actual expenditure on relevant schemes, as a result of which certain amounts particularly those based on expenditure during the closing months of the year, were left over for adjustment during the following year. This procedure has been changed from the current year, and the Government of India has been paid three quarterly installments in each case, in advance and has also promised to pay the installment for the last quarter before the close of the year, on the basis of accounts of the first three-quarters and anticipated expenditure during the last quarter. Necessary accounts and estimates have been submitted to the Government of India and it is hoped that balance of the Central grants and loans due for the last quarter will be received before the close of the financial year. In 1958-59 we have thus received not only a portion of the Central loans and grants in respect of 1957-58 but also expect to receive the full quota of Central assistance for the current year.

The year 1959-60 is likely to close with a minus accounts balance of Rs. 2.19 crores as a result of the transactions summarised below:-


Rs in crores

(a) Opening Balance on 1-4-1950


(b) Revenue Receipts


(c) Revenue Expenditure


(d) Deficit on Revenue Account (b-c)


(e) Open Market Loan


(f) Other Loans


(g) Net Receipts from Deposits, etc


Total Receipts on Capital Account



(i) Capital Expenditure


(j) Repayment of Loans


(k) Loans and Advances


(l) Total Disbursements on Capital Account (i+j+k)


(m) Deficit on Capital Account (h-l)


(n) Overall Deficit (d+m)


(o) Closing Balance on 31-3-1960 (a-n)


If the sum of Rs. 1.41 crores locked up in the Westminster Bank, London is deducted from the opening balance of Rs. 4.91 crores, the effective closing balance at the end of March 1960 would be minus Rs. 3.50 crores.

It will be necessary to wipe off this minus balance during the year 1959-60 itself as its carryover to the following year would have the undesirable effect of reducing the resources for financing the balance of the Plan outlay in the final year of the Plan.

Community development

The Community Development Programme, which has been in operation in the State since 1952-53 underwent a change during the year 1958-59 in pursuance of the Mehta Team's recommendation, and in the place of N.E.S., C.D. And post intensive stages, these Blocks will have only 2 stages--stageI and stageII--each of 5 years duration, with a revised provision of Rs. 12 lakhs for Stage I and Rs. 5 lakhs for Stage II. Before the Blocks enter the Stage I, they will also have a Pre-extension programme period of one year. The existing C.D. Blocks will continue as such till they complete their programme period of 3 years. According to this revised pattern, Andhra Pradesh will have 235 Blocks ( 26 Pre-extension, 39 C.D. Of old pattern, 130 Stage I and 36 Stage II Blocks and 4 Multi-purpose Projects located in the Tribal areas of the State). These Blocks cover about 50 per cent of the total area of the State, 59 per cent of the village and about 68 percent of the rural population. By the end of 1963 the State will have 447 Blocks functioning as units for Planning and Development. In the coming year 1959-60 it is proposed to add another 36 Pre-extension Blocks, besides upgrading 26 Pre-extension Blocks into Stage I Blocks and 21 C.D. Blocks will also be delimited into 33 Stage II Blocks.

The Government have accepted the Mehta Team's recommendation regarding Democratic Decentralisation, and, pending suitable legislation, constituted on an ad hoc basis, 20 Panchayat Samithis and Zilla Parishads all over the State and is now before the Joint Select Committee. The bill when it emerges from the Select Committee is expected to constitute an important landmark in the history of democratisation of administration and ensure quick and efficient execution of all works taken up by Local Bodies.

The Programme of Local Development Works was continued during 1958-59 with a Central aid of Rs. 35.35 lakhs. For the next year, however, the Government of India have suggested that it should be confined only to provision for drinking water supply in rural areas.

One village in each district has been choosen to implement the Scheme. " A Plan for each family" and one trained village level worker has been put in exclusive charge of this village to try the individual family approach and prepare a realstic Plan for each family. It is hoped that experience gained in this pilot scheme will help in evolving better methods and adopting them on an extensive scale.

Road Transport Corporation

The Andhra Pradesh State Road Transport Corporation which was set up as an autonomous Corporation on the 11th January 1958 took over the working of the State Road Transport Department. On the basis of the book value of the assets in the shape of lands and buildings, vehicles and stores, less depreciation and liabilities to outsiders, its capital at charge on the 11th January 1958 has been provisionally fixed at Rs. 1.99 crores. Since then the State Government has further contributed Rs. 49 lakhs to the capital of the Corporation and a provision of Rs. 29.83 lakhs is being made for this purpose in the next year's Budget. The Government of India have also agreed to provide one-fourth of the capital of the Corporation. In the current year, they have sanctioned Rs. 50 lakhs as part payment towards their share of the capital and expected to make further contributions during the coming year.

The Corporation took over from the R.T.D a fleet of 549 buses to which it has already added 100 new buses and orders for another 100 new buses are under execution.

Following the Government's decision to nationalise the road transport in the Andhra area, the Corporation took over a few routes in the Krishna district with effect from 1st April 1958 and is now rendering very satisfactory service on these routes.

During 1959-60 the Corporation proposes to purchase 200 additional buses at an estimated cost of Rs. 1 crore and to build depots at Eluru and Guntur in addition to completing the construction of bus depots at Vijayawada, Masulipatnam and Secunderabad now in progress.

The Corporation's budget for 1959-60 envisages an additional route mileage of 124 lakhs as a result of which the gross earnings are expected to rise from Rs. 2.60 crores in 1958-59 to Rs. 4.11 crores in 1959-60 while the net earnings, after meeting working expenses and interest charges, will improve from Rs. 22 lakhs in the current year to Rs. 47 lakhs next year.

State Financial Corporation

The Andhra Pradesh State Financial Corporation which came into being on the 1st November, 1956 as a result of the amalgamation of the former Financial Corporations of Andhra and Hyderabad, has an authorised capital of Rs. 4 crores while the paid up capital is Rs. 1.50 crores as follows:-.


Rs. in lakhs

(1) State Government


(2) Reserve Bank


(3) Life Insurance Corporation, Insurance

Companies and General Public


The Corporation has so far (i.e., up to 31-12-1958), sanctioned loans to the extent of Rs.1.41 crores and actually advanced Rs.67 to 98 Industrial concerns as follows:-

Type of Industry





Rs. in lakhs

(1) Textiles




(2) Rice and Flour




(3) Printing




(4) Light Engineering




(5) Chemicals




(6) Oil




(7) Tobacco




(8) Others








The rate of interest charged by the Corporations continues to be 6 1/2% subject to a rebate of 1/2% for repayment of installments and interests on the due dates.

For the year 1958-59 the Corporation estimates gross earnings of Rs. 7.25 lakhs, of which Rs. 4.00 lakhs will be utilized towards expenses, taxes and reserves, leaving a balance of Rs. 3.25 lakhs, to be supplemented by a Government subsidy of Rs. 2.00 lakhs to enable the Corporation to pay the minimum guaranteed dividend of 3 1/2%.

Public Debt

The public debt liability at the end of March 1959 will be Rs. 169.57 crores. The Central loan assistance for 1959-60 has been estimated at Rs. 20.19 crores. Small Savings and open market loans next year are expected to contribute Rs. 10 crores. A sum of Rs. 11.91 crores is being provided towards repayment of loans to the Central Government, etc. The public debt liability is thus expected to rise by Rs. 18.28 crores in 1959-60 and will stand at Rs. 187.85 crores at the end of March, 1960. Provision for interest on Public Debt has also risen to Rs. 6.06 crores in the Budget for 1959-60.

The steadily mounting liability on account of the repayment and servicing of public debt is causing great strain on the financial resources of the State, which could otherwise be used for faster implementation of the Plan Schemes. These difficulties were appreciated by the Second Finance Commission and they had recommended a scheme for consolidation of Central loans to States which was designed to provide some relief on account of interest liability and also envisaged deferred repayment of Central loans.

I cannot but share my disappointment with this house that scheme of consolidation of loans, as recommended by the Finance Commission, has not been implemented by the Government of India. Though we were promised that the Government of India would begin talks with individual States with regard to consolidation of loans, I regret nothing has been done in that direction and let me hope that at least in the year 1959-60; this will be done to the satisfaction of the States concerned.

Small Savings

The revised estimates for 1958-59 take credit for a sum of Rs. 3.41 crores under small savings. Of this, Rs. 1.66 crores represent arrears of states share in collections are expected to yield about Rs. 1.75 crores. This is by no means satisfactory. The target for gross collections in 1958-59 has been placed at Rs. 9.25 crores. Actual gross collections so far, however, amount to about Rs. 3.5 crores.

In the coming year steps will have to be taken to reach every man and woman of the rural area and explain to them the purposeful objects of small savings in order to enlist their active help and to increase the collections so that the State may earn a share of at least Rs. 4 crores in the net collections I venture to seek the co-operation and assistance of all the Honourable Members of the House in this regard and I am eager to receive their valuable suggestions.

Welfare Of Harijans And Backward Classes

The Budget Estimates for 1959-60 provide a total amount of Rs. 1.61 crores in the Standing Budget and Rs. 10 lakhs under Part II Schemes for the various activities of Government for promoting the welfare of Harijans, Backward Classes, etc., as against Rs. 1.3 crores provided in the current year's Budget. The breakdown of the figure of Rs. 1.61 crores is broadly as follows:-








(Rs. in lakhs)

Harijan Welfare




Backward Classes




The provision of Rs.10 lakhs for Part II Schemes is proposed to be utilised as follows:-


Rs. in lakhs

1. Additional provision for housing schemes for Harijans


2. Additional provision for educational

facilities and scholarships for

Backward Classes


3. Provision for educational facilities

and scholarships to economically

backward boys and girls other than

those belonging to Backward Classes




On various occasions it has been represented that there is no arrangement to help economically backward people who do not come within the purview of the term "Backward Classes" as contemplated in the Constitution. The Government have full sympathy with such persons and also with the idea underlying this kind of aid. Having regard, however, to the financial limitations it has been decided to make a beginning with a provision of Rs. 3 lakhs for this purpose in the next year's budget.

Economy Commitee

The Economy Committee which was set up last year has completed the examination of the working of the Secretariat Departments and most of the offices of the Heads of Departments. The recommendations already finalised by the Committee envisages an ultimate permanent recurring saving of Rs. 33.70 lakhs per annum on establishment charges. The remaining offices of the Heads of Departments are expected to be completed in another 2 or 3 months. Examination of the District offices has also been commenced and the proposals will be formulated soon. Several proposals for administrative reforms and improvement of efficiency in Government offices, avoidance of waste in public expenditure and delegation of more administrative and financial powers to officers at all levels, are under the active consideration of the Committee and, when finalised they will also lead to considerable economy besides improving the standards of administration. In implementing the proposals of the Economy Committee regarding reduction in establishment care is being taken to see that, as far as possible, hardship is avoided to persons who have put in sufficiently long service.

Sports Council

A Sports Council has been set up to encourage sports in various forms and it is also proposed to undertake, in due course, the construction of a fairly large stadium and also a National Theatre which will suit the requirements and traditions of this place.

Finances Of Local Bodies

Local Bodies and Panchayats are receiving aid from Government for various purposes and under various heads which do not give a proper idea of the position. It is felt that the existing arrangements need revision. It is, therefore, proposed to make a thorough study and take a comprehensive view of the financial needs of Local Bodies and Government would not mind setting aside a reasonable portion of land revenue for giving additional financial assistance to local bodies and panchayats.

Famine Relief Fund

Following the recommendations of the Finance Commission, it was decided last year to set aside a sum of Rs. 75 lakhs per annum as contribution to the Famine Relief Fund to be utilized for financing relief measures and other activities in the event of serious famine, floods and other natural calamities. This Fund came in handy during the course of the year for providing relief to the flood-stricken people of Srikakulam, Visakapatnam, Nellore, Cuddapah and other places. The provision of Rs. 75 lakhs for contribution to the Famine Fund has been repeated in the Revised Estimates for current year as well as Budget Estimates for next year.

Dearness Allowance To Work-Charged Establishment

I am glad to mention that Government have decided to extend the benefit of ad hoc increase in dearness allowance to the work charged establishments in Public Works Department and other departments of Government.

Compulsory Elementary Education

It is proposed to extend to the Telangana area the scheme of Compulsory Elementary Education and the Education Department is engaged on preparing the necessary details of the financial commitments and phasing of the programme. In the absence of a correct estimate of the expenditure involved, a token provision has been included in the Budget for 1959-60.

Naturopathy And Homeopathy

Our health services are expanding rapidly and each year larger allocations are being made for extending the benefits of modern medicine, particularly in rural areas. But we have not paid sufficient attention to other methods, such as, Naturopathy and Homeopathy. A beginning is proposed to be made next year in these directions and sum of Rs. 1 lakh has been provided in the estimates for 1959-60.

Godavari Anicut

A proposal to raise the anicut shutters at Dowlaishwaram from 3' to 6' has been under examination for some time past at the Irrigation Research Station at` Poondi'. The effect of raising the height of shutters on the stability of the anicut, as a hydraulic structure, was examined at Poondi and the examination disclosed no serious risks. By the execution of the work it is expected to bring under irrigation a new ayacut of 1,10,000 acres during the 1st crop season and 60,000 acres during the 2nd crop season. The scheme is not in the Second Plan. It will be quite remunerative from the financial point of view. The Chief Engineer has requested sanction for the detailed investigation and for the formation of a Special Division for a period of one year for the purpose. According to preliminary estimates the scheme is likely to cost about Rs. 2.7 crores. Several Legislators and other prominent public men from the area have assured the Government that they would help in raising necessary finance for this project. It will be possible to undertake the project only if necessary funds are provided by the beneficiaries and others. Meanwhile, pending full examination of the proposals, a token grant of Rs. 100 has been included in the next year's budget.

Vamsadhara Project

Proposals and estimates relating to the Vamsadhara Project prepared by the Andhra Pradesh Government are now with the Central Water Power Commission. As soon as their approval is received, negotiations will be started with the Orissa Government for obtaining their concurrence and further action will be taken to start the preliminary works.

Pomchapad Project

A medium project on Godavari at Pochampad in Adilabad district has been investigated and a report is being submitted to the Government of India with a view to make a beginning, if possible, during the period of Second Plan itself.

Tungabhadra High Level Canal

The Budget contains a provision of Rs. 56.27 lakhs for the Tungabhadra High Level Canal, a part of which will be spent in the Mysore area on the common works, the remaining portion being spent in Andhra area. If necessary, the Government will provide additional Rs. 25 to 30 lakhs for supplementing this grant during the course of the year for ensuring speedy execution of the scheme.


The work on bridges across the Gautami and Tungabhadra rivers is progressing satisfactorily. A beginning has also been made with the construction of Bhadrachalam bridge from the State's own resources. It is also proposed to undertake, as soon as possible, the Rangapuram-Gadwal bridge and also a bridge across Vasishta. These bridges, when completed, will remove the main hindrance in the network of communications in the State.

Rural Electrification

The progress achieved in the field of electrical development since the formation of Andhra Pradesh on 1st November, 1956 is gratifying. The per capita consumption of Electricity in Andhra Pradesh was about 7 at the beginning of the Second Five-Year Plan and it is now 10 and is expected to increase to about 15 by the end of Second Plan period. Rural Electrification has been given special importance and more and more funds are being provided each year over and above the Plan provision.

Anticipating shortage of power in the Third Plan, Government have started investigation of Srisailam Hydel Scheme, which is expected to produce about 5 lakhs K W. Necessary staff has been sanctioned for this purpose.

Government also propose to constitute an Electricity Board which will probably start functioning from the 1st April 1959.

Fertilizers Factory

The application of nitrogenous fertilizers in the agricultural tracts of the State can make a material contribution to augmenting food production. - the present demand for these fertilizers is about 2 lakh tonnes per annum ( in terms of Ammonium Sulphate), but only a portion of the demand is met. There is at present no factory in the State producing nitrogenous fertilizers, although the State provides all the conditions necessary for setting up such a factory. The State Government has therefore prepared a scheme for setting up a large factory for the manufacture of fertilizers which is estimated to cost about Rs. 25 crores. Nearly 50% of this amount would be foreign exchange expenditure. As regards the rupee part of the expenditure, it would not be difficult to mobilise necessary resources by drawing upon the State's own reserves, from loans that may be taken from the Industrial Finance Corporation of India, and by contributions in the shape of share capital collected from the agriculturists of the State who have already evinced keen interest in this project. The foreign exchange expenditure, however, presents a difficult problem at the moment. If the needed foreign exchange could be secured either in the form of investments in the share capital or of a loan repayable installments after the production of fertilizers has been established, the immediate impact of foreign exchange liabilities of the country would be negligible. It should then be possible to make a beginning at the setting up of the project without further loss of time. In the Budget Estimates for next year a token provision of Rs. 25 lakhs has been included for this purpose.

Land Revenue Reforms commitee

As the Hon'ble Members are aware, this Government appointed in December, 1957, a Committee with Sri K.N. Anantharaman, I.C.S., as Chairman to examine the existing systems and rates of land revenue assessment and irrigation charges obtaining in the various regions of the State and to make suitable recommendations for their rationalisation.

The Committee submitted its report towards the end of last month. The Report is a comprehensive one covering various aspects of land revenue, irrigation and related matters. The Report is being printed and copies will be furnished to the Members very shortly.

Telangana Securities

The gilt-edged and other securities which accrued to Andhra Pradesh as Telangana's share in the investment of Hyderabad State, have not been diverted for any purpose. They are intact, though the Government felt at one time that these Securities could be sold and the proceeds utilized for the development of Telangana. I reiterate the assurance given by my predecessor that Telangana money would be utilized only for the development of Telangana.


Since the presentation of last Budget, we had the privilege of welcoming the newly elected and nominated members of our Legislative Council graciously inaugurated by our President, Dr. Rajendra Prasad on the 7th July 1958. Thus, in common with the other major States, Andhra Pradesh also has now a bicameral Legislature for the first time. Our colleagues on the Legislative Council, though elected from very much restricted constituencies, will, I am sure, be a tower of strength and will fulfill all the expectations of a Second Chamber.

We are now in the fourth year of the Second Plan which we are determined to execute to the full extent. With the experience gained in formulating and implementing the first two Plans, I hope the Third Plan will be a much larger one and will be designed so as to ensure, as indicated by the Prime Minister the other day, the transformation of the country from an under-developed economy to a developed economy. I also hope the existing regional disparities in regard to industrial development will be rectified in the third and succeeding Plans.

Our responsibilities with regard to the primary needs of the people are ever increasing, though our resources seem to be static. We seem to have been nearing the saturation point with regard to taxation in the subjects assigned to us. The Central Government, which has much larger elastic resources, must come to the aid of States in a larger measure. I am sure that Finance Commission to be appointed next time would go into the question more thoroughly and give larger share of Central Excise Duties not merely in a few items but in all the items which are subjected to Central Excise Duties.

We have traveled a long distance since October, 1953 and our people have cheerfully faced the hardships of the journey. We are quite satisfied with our progress and it also give us the necessary courage to face the future boldly and with confidence.

My predecessor, Dr.Gopala Reddi had a difficult time as Finance Minister of Andhra and later of Andhra Pradesh as he had to meet the demands on all sides from relatively meagre resources. The situation has now considerably eased due to our own taxation efforts, to the financial assistance we are receiving from Government of India under the award of the Finance Commission and for Plan schemes, although it is still insufficient to meet all our requirements, and the co-operation we have been receiving from the Reserve Bank of India in the shape of temporary ways and means accommodation.

I should like to place on record my appreciation of the hard work put in by the officers and the staff of the Finance Department generally and Sri C.Damodar Reddy, Finance Secretary and Sri M.A.Abbasi, Deputy Finance Secretary in particular.

Jai Hind

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