FAQ's           Contact Us

image
GOVERNMENT of ANDHRA PRADESH
FINANCE DEPARTMENT
Previous Budget Speeches

FINANCE MINISTER'S BUDGET SPEECH 1968-69

 

Speech of

Sri K.Brahmananda Reddi

Hon'ble Chief Minister while Presenting

The Budget for 1968-69

To The Andhra Pradesh Legislative Assembly

on the 15th February, 1968.

 

 
 
Sir,

I rise to present the Budget of Andhra Pradesh for the year 1968-69.

Economic Situation

Since I presented the last Budget in June, 1967, the economic recession which was overtaken the country has not yet abated. A redeeming feature has been that the prospects of a good crop through threatened to be marred due to failure of rains in September and October, 1967, have remained bright due to the more favourable climatic conditions which have since obtained. The upward trend of the general price level has slowed down in its momentum. In fact, in recent weeks, the prices of some commodities have begun to decline. With a good Rabi harvest the price level should be further stabilised thus enabling recovery of the lost tempo of economic growth.

For a proper perception of the prospects of our economy, it will, however, be necessary to review the economic growth which we have been to achieve, since the formation of our State.

A decade has passed since our State was formed. During this period, we went through the Second and Third Five Year Plans. Our production of foodgrains during this period rose from 57.99 lakh tons in 1956-57 to 75.82 lakh tons in 1964-65, the increase being 30.7 per cent. The production, however, declined in 1965-66 to 60.01 lakh tons but again rose to 62.42 lakh tons in 1966-67. In the current year although there has been a failure of rains in September and October in some areas, the overall production would still be higher than last year.

The industrial production too had gone up substantially over the two Plan periods, the increase being 63 per cent in the Second Plan, and 42 per cent in the Third Plan period. The paid-up capital of Joint Stock Companies in the State increased from Rs.20.75 crores in 1955-56 to Rs.38 crores in 1964-65. The number of workers employed in the factories registered under the Factories Act increased from 1.79 lakhs in 1956 to 2.26 lakhs in 1966. These increase are no doubt impressive. Yet the industrial base of the State remains weak accounting as it does for only about three and a half per cent of the industrial income of the country.

The total outlay on these two Five-Year Plans was Rs.541.02 crores. 59 per cent of this was invested on Irrigation and Power. As a result, a new irrigation potential of 21 lakh acres was created, while on the power side, the installed generating capacity rose by 193 MW. During the last two years, the irrigation potential rose further by 11 lakhs of acres and the power generating capacity by 300 MW. We are thus now in possession of substantial productive assets, which would make for rapid economic growth. Our investments, will for some time, have to be directed more towards utilisation of the assets already created, rather than generation of new ones, so that the general economy of the State as well as the State’s revenues may grow.

For securing economic growth as envisaged in the Plans, an integrated and co-ordinated administration of the Plan programmes is essential, so that no shortfall is allowed to occur in any one sector as to jeoparadise any other related sector. A review of the working of the various administrative agencies concerned with the implementation of the various Plan schemes was undertaken by a Committee under the Chairmanship of Sri M.T.Raju, the present Chief Secretary to the Government. The more important recommendations of that Committee were that the District Administration should be oriented with promotion of economic growth as being its first task; that District Development Boards consisting of the Collector and Chairman of Zilla Parishad should be constituted and the responsibility of securing the economic growth of the District should be unequivocally placed on them ; and that for ensuring due provision of the basis requirements of Agricultural production viz., credit and agricultural inputs, the Collector should be held responsible and should therefore be made the District head of those Departments. The Hon’ble Members will recall that they had considered these recommendations. The District Development Boards have just been constituted and are now engaged in preparing agricultural programmes for the next Kharif season taking each Samithi area as its unit of operation.

Current Programmes
I now proceed to review the more important programmes which have currently been undertaken in the various sectors:

Agriculture:- On the agricultural front, a significant aspect of the new strategy for increased production, is the introduction of High Yielding Variety programme in 1966-67. More than 9 lakhs of acres under rice will be covered under this programme before the end of 1967-68 Kharif and Rabi seasons. In the coming seasons the coverage will be on an extensive scale, covering some millions of acres not only of rice, but also jowar, bajra and maize.

The experimental schemes undertaken to grow long staple cotton in our State are yielding encouraging results. Especially the cultivation of sea-island cotton under Tungabhadra Project, Kurnool has been highly promising. P.216 F cotton which is another superior staple variety is spreading fast in the delta districts.

The cultivation of Bengal jute which has been undertaken in Vizag and Srikakulam Districts on an experimental basis has shown good promise.

Short duration mutants from H.C.6 castor have been evolved at the Agricultural Research Institute, Rajendranagar, and a programme for its multiplication has been taken up.

Irrigation:-In the irrigation sector also we have continued to make steady progress

The Prime Minister of India inaugurated the letting in of water from the Nagarjunasagar Reservoir into the canals on the 4th August, 1967. So far, an extent of 5.33 lakh acres has been brought under irrigation. In addition, an extent of 7 lakh acres under Krishna delta will be supplied with water during the current second crop season.

Against an actual expenditure of Rs.16.5 crores in 1966-67, and a proposed expenditure of Rs.12 crores for 1967.68, the provision proposed for 1968-69 will be Rs.8.5 crores only. With this limited allotment, an additional irrigation potential of 30,000 acres under the right canal and 20,000 acres under the left canal will be created by July, 1968. The construction of Nagarjunasagar dam to the full height, will be completed in 1968-69.

The work on the Pochampad Project which is already in good progress will be accelerated. For this purpose a provision of Rs.300 lakhs is proposed for the year 1968-69, as against Rs.160 lakhs for 1967-68.

The other important projects which are in progress are the Tungabhadra Project High Level Canal is proposed to be increased to Rs.145 lakhs in 1968-69. For the Guntur Channel Scheme, the provision proposed for 1968-69 is Rs.15 lakhs.

The projects which are proposed to be taken up by collection of advance betterment contribution from the beneficiaries, will be the Godavari Barrage, the Yeleru Reservoir scheme, and the scheme for improvement to the Nizamsagar. Necessary notifications for the levy of advance betterment contribution have already been issued in the case of the Godavari Barrage and will be issued shortly in respect of the other two schemes.

The most important medium irrigation project for which preparatory action is being pursued is the Neradi Barrage which forms part of the Vamsadhara Project. The clearance for this scheme is still awaited from the Government of India.

Owing to paucity of funds, the work on some of the irrigation projects had perforce to be slowed down. It is unfortunate that this has resulted in the retrenchment of a large number of engineers. With a view to gainfully employ them, it is proposed to undertake investigation of projects which would fall to be taken up in the coming years, and also detailed preparation of estimates pertaining to the latter phases of the continuing projects, so that no time need be lost in executing them as and when our financial resources permit. Investigation will be undertaken of schemes which are likely to find a place in the Fourth Plan either in the State or the Central sector.

Power:- The work on Srisailam project is in good progress. An engineering problem of great complexity was encountered in the construction of the coffer dam in the deep river portion. I take this opportunity to congratulate all our engineers who have succeeded in constructing the coffer dam under nearly 40 feet depth of water.

Last year, I expressed the hope that the Electricity Board would improve its finances and render better services to the consumer. This has, by and large, been fulfilled. The gross income in the current year will be about Rs.25 crores as against Rs.18 crores last year, and is expected to go up to Rs.33.5 crores next year. The working expenses have been brought down from 70% last year to 49% this year and this is expected to go down to 44% next year. This compares very favourably with All India percentage to 45 to 50. 9,000 pumpsets were energised last year and 20,000 this year. The capital investment is Rs.28.14 crores in the current year and the proposed investment for 1968-69 is Rs.30 crores. Substantial provision will be made for strengthening transmission facilities and energisation of pumpsets.

The total installed capacity at the end of the Third Plan was 292 MW. Kothagudem contributed 120 MW last year. The Third and Fourth units of Kothagudem which were commissioned in July, 1967 have added 60 MW each. The first unit of 60 MW of Upper Sileru has also been commissioned. The total installed capacity has now risen to 592 MW. With the second unit of Upper Sileru which is to be commissioned very shortly, the total capacity will rise to 652 MW. Kothagudem has been linked to Hyderabad on a double circuit 132 KV line via Warangal. The 132 KV line to Mahboobnagar will be completed next year. The sub-station at Gazuwaka will also be commissioned along with it. Nagarjunasagar has been connected to Hyderabad by a 132 KV line giving an alternative feed to Hyderabad. A 75 MVA transformer has been installed at Hyderabad to stabilise the supply to the twin cities and also the surrounding districts of Telangana.

With a view to accelerate rural electrification, a scheme has been formulated requiring beneficiaries to contribute 25% of the estimated cost as loan. It is programmed to energise 30,000 pump sets next year as against 20,000 this year.

On rural electrification in Telangana, an additional provision Rs.1 crore will be made in 1968-69 out of Telangana surpluses. This will be in addition to Rs.1.8 crores which is proposed to be spent in Telangana in other sectors from their surpluses.

Industries:-
The 50 crore Coromandel Fertiliser Unit has recently been inaugurated at Visakhapatnam on 10th December, 1967 by the Deputy Prime Minister. With the full commissioning of this plant, the supply position of fertilisers in our State will be considerably improved.

Of the Central Government undertakings in our State, the Department of Atomic Energy has made rapid progress in setting up its units for the manufacture of electronic equipment and other material required for atomic reactors. The project for the manufacture of pressure vessels at Visakhapatnam has begun to make headway.

Plans for setting up a plant for the manufacture of Ball and Roller bearings at a cost of Rs.3.5 crores by the Andhra Pradesh Industrial Development Corporation are nearing finalisation. The Corporation also expects to be able to secure necessary assistance from the Central financing institutions for prosecuting the project for manufacture of glassware with collaboration from Hungary.

The Andhra Pradesh Mining Corporation has undertaken the mining of Asbestos in Cuddapah District. It has also set up a Clay Levigation Plant at Dwaraka Tirumala in West Godavari District. This Corporation has so far exported 3.5 lakh tonnes of iron ore earning a foreign exchange of Rs.1.75 crores.

The following are the major investigations either completed or being carried out in the State.

Copper and lead:- Detailed assessment of copper and lead deposits in Agnigundala belt, Guntur District :

About 14 million tonnes of lead and copper ores have already been proved in the Bandalmottu, Nallkonda and Dhukonda Blocks, and further drilling is in progress.

Copper:- Assessment of copper deposits in Gani Kalava belt, Kurnool district :

Further deep drilling is proposed during 1968-69.

Lead, Zinc:- Assessment of lead and zinc deposits in Chelima Varikunta and Zangamrajupalle belt in Cuddapah and Kurnool Districts:

Further drilling is pursued for a final assessment of the deposits.

Gold:- Drilling and Mining exploration for gold in Ramagiri gold field, Anantapur district :

Payable ore-shoots totalling 400 m in length averaging 1 m. in width and 5 to 8 gm/tonne of gold have been provided on 2nd level in Yepamana mine. The development of the 3rd level in Yepamana mine has been taken up.

Asbestos:- Detailed mapping and drilling for asbestos and copper in the Pulivendala belt, Cuddapah district :

A preliminary estimate has proved 0.25 million tonnes of asbestos. A final detailed assessment of the deposits has been taken up.

Copper:- Detailed assessment of copper deposits in Mailaram area, Khammam District :

About 0.46 million tonnes of copper-ore with 2% copper have been proved in the first phase of drilling. The second phase of deep drilling is in progress.

Agro-Industries Corporation


An Agro-Industries Corporation with an ultimate share capital of Rs.2 crores is proposed to be set up before the end of March, 1968. 51% of the share capital will be paid by the State Government and 49% by the Government of India. The immediate subscribed share capital is Rs.60 lakhs of which Rs.30 lakhs will be by the State Government and Rs.30 lakhs by the Government of India. This Corporation will buy and sell agricultural machinery, implements, accessories, tools, etc., and will also hire out machinery to agriculturists at reasonable rates. It will allotted imported machinery like tractors, power tillers and earth moving machinery etc. by the Government of India. Ultimately it is expected to extend its activities to agro-industries like processing plants for cashew, rice, cotton, tobacco, groundnut, fruits and vegetables, etc.

Education

The three language formula under which each child has to learn English, Hindi and mother-tongue has been in operation in our State for over seven years now. No serious difficulties have been experienced in its working. But it is feared that the resolution passed by Parliament recently and the extreme positions taken in some States have unfortunately rendered the implementation of the formula difficult. In my humble opinion this question has to be appreciated and the situated remedied keeping in mind the paramount need for maintaining and strengthening national unity. Hon’ble Members will have an opportunity to express their views, which I am sure will be dispassionate and objective.

Government have decided that the medium of instruction in Colleges should be progressively changed over to Telugu. In the field of administration also Telugu has been ordered to be used upto Taluk level in about 25 departments and this will be progressively extended.

Three post graduate centres have been opened at Warangal, Guntur and Anantapur at a cost of Rs.25 lakhs each. These centres will function as the nucleus for post graduate studies, and will in course of time flourish into full-fledged universities.

Co-operative Finances

In 1966-67 production finances given by the Co-operatives amounted to Rs.17 crores. These will go up to Rs.25 crores this year and Rs.40 crores next year. Long term finance too will be registering an increase from Rs.11 crores in 1966-67 to Rs.15 crores in 1967-68, and Rs.20 crores in 1968-69. Area development schemes which are to be financed by the Agricultural Refinance Corporation are being taken up on a large scale.

The super bazar at Hyderabad is becoming increasingly popular with its daily sales now being as high as Rs.38,000. As a measure of holding the price line, it is proposed to set up similar bazars in some more important towns. Government have also decided to procure essential commodities like Bengal gram, jowar, etc., with a view to distribute them to the poorer sections of the society in the lean months.

Assignment of Lands

Hon’ble Members may recall that I had promised to expedite grant of pattas to landless poor in respect of waste lands. I am glad to report that this promise is being redeemed in full measure. Out of 1,21,878 applications for grant of pattas pending by the end of July, 1967, pattas have been granted in over 1,00,000 cases. The work in the remaining cases will be completed in the coming months.

In the case of Scheduled tribes vigorous steps have been taken to evict non-tribals from the lands taken by them from the tribals. About 37,000 acres of land will be assigned to the tribes on this account.

Tenancy Reform

The Andhra Pradesh (Telangana Area) Tenancy of Agricultural Land Act, 1950 contains provision for transfer of ownership to the protected tenants of all lands which they are entitled to purchase from their landlords. This provision was already extended to Khammam District and Mulug Taluk of Warangal District. Government have decided to extend the provision to the remaining area in Telangana with effect from 15th August, 1968. About three lakhs of protected tenants, holding about 21 lakhs of acres, will be benefited by this measure.

Drought and Relief

There has been a recurrence of drought in some parts of our State. Remission of land revenue in all drought affected areas on a liberalised scale has been ordered. Also the recovery of arrears of all dues has been postponed in those areas. For undertaking relief works a sum of Rs.50 lakhs has been sanctioned till now. The Land Mortgage Bank has also undertaken to make a provision of Rs.2 crores for disbursement of loans for the sinking and deepening of wells in these areas.

Review for 1967-68 and 1968-69

I now present the review of our financial position for this year and the next.

The outlay on the Annual Plan for 1967-68 was originally fixed by us at Rs.74.87 crores. The Planning Commission fixed a ceiling of Rs.68.98 crores. It also earmarked a provision of Rs.12 crores for Nagarjunasagar against Rs.8.5 crores fixed by us. To partially meet the Planning Commission’s recommendations our Plan has been revised to Rs.71.15 crores.

The outlay for the Annual Plan 1968-69 has not yet been finalised with the Planning Commission. We are of the view that this should be fixed at a minimum of Rs.72 crores and that sectoral allocations for 1968-69 should not be less than the current year’s Plan and that the Central assistance for 1968-69 should also be correspondingly fixed.

The Planning Commission have decided that the Fourth Plan will now commence from 1969-70 and that the work of formulating a Fourth Plan should be completed during 1968-69. Work in this regard will be started in our State also as soon as broad indications with regard to the New Fourth Plan are made available by the Planning Commission.

Accounts for 1966-67

The Revenue receipts in 1966-67 amounted to Rs.172.26 crores while expenditure on Revenue Account was Rs.184.68 crores. The deficit was Rs.12.42 crores as against the anticipated deficit of Rs.8.41 crores in the Revised Estimates 1966-67. The larger deficit is mainly accounted for by the shortfall under Land Revenue due to suspension of collections consequent on the Supreme Court’s decision striking down the Additional Assessment Act, 1962.

Revised Estimates 1967-68

As against the original estimates of Rs.171.66 crores the Revenue Receipts have now risen to Rs.191.32 crores. The increase is mainly due to the following:

                      a. A net income of about Rs. 10 crores under the new Land Revenue Act.
  
                      b. Better collections under State Excise Duties, Sales Tax, Taxes on Vehicles and                           Stamps, etc.

                      c. Rs.50 lakhs towards bonus payable by Government of India on the export of                           paddy and rice to other States.

Revenue Expenditure has also been risen from the original figure of Rs.184.42 crores to Rs.193.91

The Budget for 1967-68 provided for a total capital outlay of Rs.40.14 crores as against which the Revised Estimates has been fixed at Rs.38.93 crores to meet expenditure on schemes such as commutation of pensions, payments to Jagirdars, irrigation, electricity, buildings, industrial development, etc.

After taking into account the above transactions and those under Loans and Advances, Public Debt and Deposits, the year is expected to close with a cash balance of minus Rs.2.56 crores.

Budget Estimates 1968-69

The Budget Estimates for 1968-69 provide for a total revenue of Rs.199 crores and Revenue expenditure of Rs.204.67 crores. We are expecting a Central assistance of Rs.53 crores for the next year’s Plan. Out of this, the Central grant is expected to be Rs,4,31 crores. In our proposed Plan, the outlay on Revenue account is likely to be of the order of Rs.14.04 crores. The net deficit on Revenue account is expected to be Rs.5.67 crores.

The following are some of the important items of expenditure provided for in the budget for
1968-69 outside the plan:-

(a.) Rs.81 lakhs for purchase of paddy and other seeds and pesticides.

(b) Rs.16.19 lakhs for pumping schemes under the control of Chief Engineer, Irrigation in addition      to normal maintenance of irrigation sources.

(c) Rs.48 lakhs for the implementation of U.G.C., scales of pay to college teachers.

(d) Rs.40 lakhs for purchase of paper for the Nationalised Text Books in case no gift paper is       received from Sweden.

(e) Rs.13 lakhs for grant of Central scholarships to Scheduled Castes, Scheduled tribes and other      Backward Classes.

The total Capital Outlay is estimated at Rs.33.68 crores next year as against the Revised Estimates of Rs.38.93 cores and Budget Estimates of Rs.40.14 crores for the current year. A sum of Rs.9.01 crores is provided for disbursements under Loans and Advances.

The tear 1967-68 opened with a minus cash balance of Rs.0.63 crore and is expected to close with a minus cash balance of Rs.2.56 crores. On the basis of Revenue and Expenditure, Capital Outlay, Loans and Advances, Debt, Deposits, etc., the year 1968-69 is expected to close with a minus cash balance of Rs.18.07 crores. A portion of this will be covered by additional taxation measures. The balance will remain uncovered for the present.

Welfare Measures proposed for 1968-69


Inspite of the sombre financial position just presented to you, the Government consider it their first duty to make provision for schemes specially calculated to promote the welfare particularly of the weaker sections of the people, though they may not be of a capital nature. Only paucity of funds has restrained Government from making a large provision for these and similar schemes.

(i) A basic requirement for the functioning of a socialistic pattern of society is the provision of equal opportunity for education irrespective of means. At present, girls are allowed free education upto and inclusive of the higher secondary school stage, while boys are allowed this concession only upto the upper primary stage. Government have decided that this concession of free education should be extended to the boys also upto and inclusive of the secondary stage. This will entail a loss of fee income to the extent of about Rs.75 lakhs a year. Considering that investment on education, is really an investment on human resources, the cost involved would be fully justified.

(ii) Government are anxious to augment the programme for promotion of welfare of Scheduled castes, Scheduled Tribes and Denotified tribes. The problems of housing and education for these communities still remain of formidable proportions despite the assistance afforded by the Government all these years. The Government will endeavour to ensure by means of a comprehensive scheme, spread over a number of years, that every family belonging to these communities is provided with housing and with facilities for the education of their children.

(iii) In addition to granting house sites, it is also essential to sanction to these communities cash grants to enable them to put up their own houses. Government have, therefore decided, that in future, along with the assignment of house sites, a grant of Rs.100 will be paid to every assignee to partly enable him to purchase housing material. This concession will apply to all allottees who were granted house sites on or from 6th December, 1967 the date from which the cash grant was increased from Rs.50 to Rs.100 per allottee. Government have accordingly proposed to make a provision of Rs.40 lakhs as against Rs.13 lakhs this year of land acquisition and for purchase of housing material for Scheduled castes. In the case of Scheduled tribes, the provision is proposed to be increased from Rs.2 lakhs this year to Rs.5 lakhs next year. For Denotified tribes a new provision of Rs.5 lakhs is proposed. It is also proposed to increase the provisions for boarding grants etc., for Scheduled castes from Rs.121 lakhs to Rs.129 lakhs this year and to raise it further to Rs.138 lakhs next year. The additional expenditure involved on account of these proposals comes to about Rs.52 lakhs per year.

(iv) The levy of grazing fees in forests has often caused inconvenience to petty ryots. Government have, therefore, decided to permit free grazing in all forests without any fees. The loss of revenue on this account is estimated at Rs.15 lakhs per year. Government have also decided to allow permits without any fees for cutting and taking away straw from forests for house building purposes.

               i. The twin cities of Hyderabad and Secunderabad have, in the last few years, been                undergoing rapid growth. With a view to enable the Hyderabad Municipal Corporation                to provide basic amenities particularly roads and sanitary works, commensurate with                their growth, Government propose to increase their grant-in-aid to the Corporation                from Rs.9 lakhs to Rs.20 lakhs.

(vi) In 1967, increased rates of dearness allowance were sanctioned to various classes of State employees including N.G.O.s., work-charged establishment, contingent employees, employees of Government industrial undertakings, teachers of all grades, all employees of local bodies, village officers, etc., involving a total annual expenditure of Rs.13 crores. In January, 1968 these were further increased involving an additional annual expenditure of about Rs.8.5 crores. Owing to the stringency of the ways and means position, 50% of this was ordered to be credited to the Provident Fund of the employees. It is intended to increase the cash content of the dearness allowance as soon as our financial resources permit.

(vii) The welfare of the employees will always remain in chief concern of the Government and as a measure of promoting it, it is proposed to increase the provision for grant of house building loans to them from Rs.8 lakhs this year to Rs.20 lakhs next year.

Law and Order

Law and Order:A disquieting phenomenon which is assuming disturbing proportions in the out-break of public disorder, resulting in vandalism, incendiarism and destruction of public properties. The pretext for undertaking them are often too flimsy. The sections of population indulging in them are often not the aggrieved ones. While it is the avowed aim of some subversive leaders to create disorder for disorder’s sake, there are others whose profession is to avail themselves of every disorder for personal gain. These are the enemies of society against whom all of us have to contend. The most heinous of these are those who incite and inflame the youth. A heavy responsibility rests upon all of us irrespective of our party affiliations to curb these elements, as otherwise, orderly society will become difficult. For our part, let me assure you, that we will apply the sternest measures in dealing with these anti-social elements, and enforce settlement of all disputes by peaceful means.

Conclusion

I must not fail to recall that the size of our State Plan has been steadily shrinking. The outlay on the Plan for 1965-66 was Rs.105 crores. It declined in the following year to Rs.95 crores and still further to Rs.71 crores in the current year. As Hon’ble Members are aware, the two components of the Plan outlay are the Central assistance and the State’s own resources. The avenues for State taxation which are themselves limited have already been well explored and unless Central assistance is forthcoming in a large measure or a fuller devolution of Central revenues is effected, the prospects for undertaking larger plans in the coming years will be dim.

A Finance Commission will have to go into the matters before the Fourth Five-Year Plan can be formulated, and I am confident that it will devise solutions which will enable us to undertake larger plans in the coming years. However, the requisite state resources for the sustenance of the larger plans envisaged for the coming years, will have to be raised by us. I am hopeful that we shall be able to discharge this responsibility as with the fuller utilisation of the productive assets already created in the past plans, our economy will register rapid growth.

 
 
For any Technical Queries Please Contact Chief Technology Officer, Finance Department. Tel: 0863 - 2442550.
Designed and Developed By APCFSS