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Speech of

Sri K. Vijaya Bhaskara Reddy

Hon'ble Finance Minister while Presenting

The Budget for 1970-71

To The Andhra Pradesh Legislative Assembly

on the 19th February, 1970.





I rise to present the budget of Andhra Pradesh for 1970-71.

The Budget for the year has been formulated against the background of the developing economic situation in the State and in the country. I shall, therefore, briefly touch up on the main features of the economic conditions in the State during this year, before proceeding to discuss the budgetary prospects for the year to come.

Economic Trends.

As the Honourable Members are aware, Nature was unusually unkind to us in the recent past; the successive failures of the monsoons, the severe cyclones that hit the coastal districts in quick successions, and the heavy rains that came on the top of the cyclone, disrupted the agricultural economy beyond measure. The very good production level of 75. 82 lakh tonnes of food grains achieved in 1964-65 fell to 60.01 lakh tonnes 1965-66; rose to 68. 23 lakh tonnes in 1966-67 and 70.79 lakh tonnes in 1967-68; but registered an a sharp decline in 1968-69 when it came down as low as 55.68 lakh tonnes. With the damage suffered during this year due to cyclones and rains, the over all position is not likely to be encouraging. In a predominantly rural economy like ours, the over all economic situation is closely linked with the fortunes of agricultural production and with the gloomy picture in the agricultural front, it is easy to imagine the serious stress and strain that our economy is facing.

The trends in the field of industrial production are also mixed, though there has been a sub-stantial increase in production in certain sectors such as sugar, machine tools and cement products. In respect of employment, the reduced investment levels in the State an Central Plans and the lower investments in the private sector have necessarily led to a diminution in the employment opportunities. I shall now give a brief reviews of the activities and programmes of the various departments.


The High-yielding varieties programme and the Multiple cropping programme continue to form the main planks of the new strategy of agricultural production. During the year 1970-71, it is programmed to cover 14. 80 lakh acres under paddy, 3.80 lakh acres under hybrid millets, 1 lakh acres under hybrid maize and 1 lakh acres under improved Mexican wheat as against 10.33 lakh acres, 2 lakh acres 0.90 lakh acres, and 0.22 lakh acres respectively during 1969-70. In order to achieve these targets, the production of quality seeds, supply of fertilizers and pesticides, expansion of irrigation potentialities and the organisation of farmers training and education programmes have been intensified. The seed processing units proposed to be located at Mahadevamangalam, Malthumeda and Samalkot are in the final stages of completion and are expected to start functioning from 1970-71. To guide the farmers in the judicious use and application of fertilizers, it is proposed to establish three more soil testing laboratories in the district of Visakapatnam, Warangal and Adilabad. Soil conservation work will be considerably stepped up to cover 1.60 lakh acres in the 1970-71 as against 0.90 lakh acres in 1969-70. Demonstration on dry farming both in red an black soil area of Rayalaseema region are proposed to be undertaken. The Government have accepted the offer of assistance of Canadian Government for the investigation of under ground water in the vicinity of Hyderabad city and environs. The Indo-French Project for the agricultural development planning in the semi-arid zone of Andhra Pradesh is being located in Anantapur district. The French Government have offered assistance for 3 years for schemes involving behavioral trials of new varieties and species with reference to the agro-climatological situation area, optimum water requirements of plans and adaptation of techniques and equipment for better water utlisation.

The Agro-industries Corporation made sub-stantial progress during the year and the profits made by the Corporation to the end of June 1969-though small-augurs well for the future. The Corporation has secured a large fleet of crawler tractors and it is proposed to reclaim large areas of virgin land in the project areas to bring them under irrigation. Sub-stantial work was also done by the corporation in the field of ground water exploitation. The Corporation proposes to initiate action to develop necessary markets in the project areas, especially, Nagarjunasagar and Pochampad under the centrally sponsored scheme of development of infra-structure market complexes.


The cooperative Central Banks advanced Rs. 25.04 crores through the Primary Agricultural Credit Societies as short and medium term loans for agricultural purposes during 1968-69, as against Rs. 20.53 crores in 1967-68. During 1969-70, a target of Rs. 40 crores is likely to be achieved. With a view to if I will in the gaps in the field of agricultural credit between the demand and the amount provided by the cooperative Central Banks, the Reserve Bank of India have evolved a scheme where by the commercial banks would provide agricultural credit to the farmers through select agricultural credit societies in the area of weak cooperative Central Banks. This scheme has been accepted by the State Government and will be implemented in the area of thirteen Central Banks. It is expected that commercial banks would commence financing the farmers through the cooperatives from the ensuing Kharif season.

The land Mortgage Banks are expected to reach a lending target of Rs. 25 crores in the year 1969-70. The target for 1970-71 is Rs. 28 crores. So far, seventy area development schemes have been formulated involving a financial outlay of Rs. 36.22 crores for the development of 2.45 lakh acres in 1969-70. The Agricultural Refinance Corporation has so far, sanctioned 44 schemes.

The Government are evolving various measures to ensure that the institutional financing agencies in the field of agricultural credit serve the needs of the small farmer, who, for various reasons, has not received due attention from the dispensers of credit.

Dairy Development.

The Milk Powder Factory, Vijayawada went into production during April, 1969. With the commencement of the flush season from October, 1969, production of by- products like skim milk powder and ghee were under taken. This facilitated the fulfillment of the long awaited desire of the producers of that area for the acceptance of their entire marketable surplus.

Another important program to be implemented during 1970- 71 relates to the strengthening of the cooperative sector for undertaking primary collection of rural milk on the pattern of Anand area of Gujarat state. Towards this, as a first step, it is proposed to organise 100 co-operatives in the milk shed areas of Krishna and Guntur districts. These co-operatives will serve as media for all improvements in the dairy field such as meeting credit requirements, supply of cattle feed, and sharing in the management of activities at the collection centres and training of leadership.

A milk cooling centre is being established at Mydukur in Cuddapah district during 1969- 70. A full- fledged dairy to handle 10, 000 liters of milk a day will be developed at Kurnool during 1970- 71. A milk cooling center is likely to be set-up at Anantapur in the coming year.


In respect of Nagarjunasagar project all the works necessary for letting out water in the first 57 miles of the right main canal and in the branches and distributaries to the cover an ayacut of 6. 77 lakh acres have been completed. Like- wise, all the necessary works for allowing water in the first 58 miles of the left main canal and in the branches and distributaries for serving an ayacut of 2. 30 lakh acres have been completed. The Government of India have recently agreed to sanction additional funds to the extent of Rs. 100 lakhs for the expenditure on the Nagarjunasagar Left banning Canal during the year 1969- 70, bringing the total programmed outlay on the project during the year to Rs. 11. 40 crores. The total expenditure on the project so far is Rs. 153. 68 crores. The programme for the year 1970- 71, envisage an outlay of Rs. 10. 20 crores during the year.

The work on the dam and canals of Pochampad project is in good progress. During 1969- 70, the Plan allotment was enhanced to Rs. 6 crores and in addition, an amount of Rs. 1 crore was provided by the Government of India, taking the total annual outlay on the Project to Rs. 7 crores. With the increased outlay, the progress on the project has been stepped up and an accelerated programme has been taken up with a view to creating an irrigation potential of 40, 000 acres by June, 1970. During 1970- 71, the outlay on the project is expected to be Rs. 6 crores.

Sanction has been accorded for the Godavari Barrage Scheme at an estimated cost of Rs. 26. 59 crores. It is proposed to start the work on this scheme in the current year. The work will be speeded up in the coming year.

The importance attached by the Government to the drainage schemes in Krishna- Godavari delta is already known to the House. It was originally proposed to commence the work with the funds provided by the drainage cess collections. The collection of drainage cess could not, however, be under taken due to the damage caused by the cyclone havoc in the coastal districts. Thanks to the loan assistance of Rs. 3 crores offered by the Government of India for expenditure during the current year, works of a total value of Rs. 9 crores are under implementation. During the year 1970- 71, it is proposed to make a beginning in the collection of drainage cess and execute a programme of the order of Rs. 5 crores.

The draft scheme for improvements to Nizamsagar Project under the Betterment Levy Act was published in December, 1969. The final notification has also been published and detailed estimates are under finalization finalisation.

The proforma estimates of Pulivendla Project have been sent to the Central Water and Power Commission and Planning Commission for clearance. The work on the scheme is expected to be started as soon as the first installment of betterment levy is collected. The Andhra Pradesh Cooperative Central land Mortgage banning has prepared a scheme for advancing loans to ryots for enabling them to pay advance betterment levy.

Action has been taken to finalize the project estimates in respect of Vamsadhara Project I stage and it is expected that the approval of Central Water and Power Commission will be secured shortly.

As regards Somasila Project in Nellore district, investigation is in progress and the Project Report will be sent to Government of India after the completion of investigation.

The work on the Nizamsagar will be remodelling will be commenced as soon as the betterment levy is collected. Particular attention will be paid to the repairs of the distributaries. It is hoped to make a provision of Rs. 25 lakhs in the Plan of 1970- 71 for this purpose by suitable reappropriation.

A total of 586 and 640 Minor Irrigation works in Andhra and Telangana respectively are under execution. Further, 147 works costing Rs. 78 lakhs have been taken up in Telangana Districts under the Special Telangana Development Programme. An additional potential of 61, 000 acres is expected to be created by the end of 1969- 70.


The available generating capacity in the State is about 580 M.W. And this is expected to increase to 1063 M.W. By the end of the Fourth Five-Year Plan ( 1973- 74). On the demand side, the maximum power demanded reached so far is 425 M.W. And this will rise to 1160 M.W. By 1973- 74. On the basis of the anticipated load development, there is likely to be a power shortage from 1970- 71 onwards. This will, however, be relieved towards the end of 1970 when Ramagundam unit of 62.5 M.W. Would go into commission; but the power shortage will continue to grow in subsequent years, until Kothagudem III stage ( 2110 M.W.) And Lower Sileru ( 2 X 100 M.W.) Are commissioned in 1972- 73 and 1973- 74 respectively.

The per capita consumption in the State which was 36 units in 1967- 68 increased to 44 units in 1968- 69 and is likely to increase to 51 units in 1970- 71. Out of the total number of 27, 307 towns and villages in the state, the number of villages electrified at the beginning of the Fourth Plan ( 1969- 70) was 5, 757 and the number of pump- sets energised was 1, 22, 321. The programme of electrification in 1969- 70 envisage electrification of 837 spill- over villages end 857 new villages in the usual plan, apart from the 360 new villages in Telangana under the Telangana Special Development Programme. The number of pump- sets energised in 1969- 70 is likely to reach 40, 600. The programme for 1970- 71 is expected to cover 1, 000 villages including spill- over works, etc.

The work on the Srisailam Project is in brisk progress. The total expenditure incurred on the project so far is Rs. 25. 67 crores. A provision of Rs. 3. 50 crores has been made for the project for the year 1970- 71.


During the year, the state Government have undertaken efforts in various direction to accelerate the industrial development of the state.

The Atomic Energy Department of the Government of India have commenced the work on the setting up of a Rocket Launching Station on the east coast at Srihari Kota Island in Nellore district. The State Government have extended various facilities for this project and it is expected that the investment in the project will, apart from its contribution to the technological development, also stimulate the economic activity in this region. The Government of India have agreed to set-up a coal- based Fertilizer Plant at Ramagundam. The Zinc Smelter Plant at Visakapatnam is expected to be set-up during the Fourth Plan period. The State Government are endeavouring to persuade the Government of India to locate a steel plant and scooter Projects in Andhra Pradesh and are very hopeful about the results.

The Government of India have since decided to go ahead with the Tele- communication Cable Factory at Hyderabad at an estimated cost of about Rs. 9 crores. Another important development is the commencement of exploitation of lead, zinc and copper deposits at Agnigundala in Guntur district. As a first phase, the Bandlamutta deposits have been taken up for exploitation recently. It is also hoped that the large scale exploitation of diamond deposits at Vajrakarur and Ramallakota and the asbestos deposits in Cuddapah district will be taken up shortly. The Government are keen on developing the minerals and mineral based industries in Rayalaseema and Telangana.

The State- owned Industrial Development Corporation has taken over the management of M/s.. Indo- Nippon Precision Bearing Limited. The work on the ball bearing project is in steady progress and it is expected to be commissioned during 1970- 71. The corporation has taken up the promotion of Associated Glass Industries for the manufacture of crystal glass and hollow- ware by utilising quartz, which is available in abundance in our state. The corporation has so far sanctioned financial assistance to nearly 90 projects covering a wide range of industrial activity. The promotion of a number of industries including mica Processing, manufacture of tyres and tubes, foundry grade pig iron and electronic components is under the active consideration of the corporation.

Over a period of thirteen years since its inception, the Andhra Pradesh State Financial Corporation has sanctioned loans amounting to Rs. 15. 09 crores. It has also subscribed Rs. 34 lakhs towards debentures and Rs. 21 lakhs towards the share capital of various industrial units. During the year, the corporation has offered 100% advance on the basis of collateral security, with the object of encouraging entrepreneurs with moderate means.

The Government of India have sanctioned a license to the Nizam Sugar Factory Limited, to set-up a new sugar factory at Zaheerabad with a crushing capacity of 1, 250 tonnes of cane per day. The new unit will go into production in 1972- 73.

The Government have also been taking various measures to straighten the sugar industry in the cooperative sector. The services of the Agro- Industries Corporation have been enlisted to explore and exploit the ground water resources in each factory Joan. The Government are also making efforts to set-up new sugar factories in the cooperative sector, mostly in Rayalaseema and Telangana taking advantage of the irrigation potential created under the Nagarjunasagar project, Pochampad, Rajolibanda diversion scheme and the Kurnool- Cuddapah canal. Nine schemes have been formulated for implementation mention, three in Telangana, three is Rayalaseema and the rest in relative would like backward areas of the coastal region.

By suitable liaison with the State banning at various levels, it has been possible to secure financial assistance from the State banning of India to a large number of small scale units in the state during the year. The total number of units assisted by the State banning of India in Andhra Pradesh is about 3, 766, the amount advanced being of the order of Rs. 24. 87 crores. The coverage in relation total number of units is one of the highest in the country. It is hoped that commercial banks will participate in a larger measure than in the past, in financing the small- scale industry.

Medical and Health.

The main activities in respect of medical and health services during 1969- 70 include the setting up of additional E.N.T. Units in the medical colleges and hospital is at Visakapatnam and Guntur; additional orthopedic units in the medical colleges and hospital is at Visakapatnam, Guntur, Kurnool and Hyderabad; establishment of a neuro-surgery unit at Guntur; sanctioning of cardiology units at the medical colleges and teaching hospital is at Secunderabad and Guntur; and the establishment of cardiac surgery units at Secunderabad and Guntur.

High priority continues to be accorded to the successful implementation of the Family Planning programmes. With a view to intensify the programme, the Primary Health Centres have been reorganised and additional staff has been posted to conform to the pattern laid down by the Government of India. The construction of sterilization wards and the Family Planning sub- centres are in progress. It is expected that the target of 2. 376 lakhs of sterilization fixed by the Government of India for the year 1969- 70 will be fully achieved. It is also expected that the state will continue to maintain its leading position in the country in respect of tubectomies.


It has been decided to supply bottled milk to primary school children in the twin cities of Hyderabad and Secunderabad through the integrated Milk Project with the aid of CARE organisation. An amount of Rs. 1. 80 lakhs has been sanctioned for this purpose for the year 1969- 70.

In connection with the introduction of two- year Intermediate Course with effect from the academic year 1969- 70, selected Higher Secondary Schools, Multi- purpose high schools etc, have been converted into Junior Colleges.

In Andhra area, 70 Government Junior Colleges and 15 Private Junior Colleges have started functioning. In Telangana area, the Junior Colleges could not be opened simultaneously as the examination could be held only in December, 1969. They are expected to start functioning in February, 1970.

Social welfare.

As the house is aware a special provision of Rs. 1 crore was set apart during 1969- 70 for expenditure on Harijan Welfare and Welfare of Scheduled Tribes in the context of Gandhi Centenary Celebrations. This additional provision has given a much needed step up to the welfare programmes and it is proposed not only to maintain the higher outlay but also to enhance it further during the coming year. One of the basic problems confronting the poorer sections of the society- particularly the Scheduled Caste is that of finding house- sites in hygienic surroundings. It is indeed a matter of concern that the problem of living space should still remain a basic problem for millions this country. It is, therefore, proposed, to provide an amount of Rs. 1 crore during the year 1970- 71, for acquisition of land for providing house- sites for Scheduled Caste, Scheduled tribes and other backward classes. This will be a substantial provision and will indicate the earnestness on the part of the Government to make determined efforts towards the amelioration of the conditions of the living of the weaker sections of the society.

Fourth Five-Year Plan.

When the Fourth Plan proposals were considered at the meeting of the National Development Council in April, 1969, it was decided that a reassessment of resources should be undertaken with reference to the Award of the Fifth Finance Commission. The discussions on the Fourth Plan of the State on the basis of the resources as reassessed were held in November last year, when an outlay of Rs. 409 crores was suggested by the Planning Commission based on the resources in sight. The State Government have taken the stand that this small size of the Plan which was now here near the needs was not acceptable to the State Government. We have urged that the State's Fourth Plan outlay should be finalised only after a decision on the demand of the states for increasing the state sector in the National Plan was taken by the National Development council and that the increased provision is in the State sector outlay should be distributed only to those states whose per capita plan outlay was less than the All- India average. A decision on the size and content of the Fourth Plan is yet to be taken and with the likely increase in the size of the Plan and the Public Sector outlay, we hope that we would be able to implement a plan which would fully reflect the needs and aspirations of the people of our state.

Annual Plan 1969- 70.

In the Budget for the year 1969- 70, an outlay of Rs. 87. 50 crores was envisaged including the provision of Rs. 9 crores for Special Telangana Development Schemes. Subsequently, the Government of India agreed to provide an additional outlay of Rs. 1 crore for Nagarjunasagar Left banning Canal and Rs. 1 crore for Pochampad project, on the basis of our request for additional central assistance. Concern additional provision have also been agreed to during the year to the extent of Rs. 170. 80 lakhs including Rs. 1 crore for the Indo- Nippon Ball Bearing Project. The Power outlay of the State Electricity Board is also expected to reach Rs. 40. 66 crores, as against the original Plan provision of Rs. 34. 23 crores. Taking these into consideration and allowing for minor shortfalls in different sectors, the revised Plan outlay for 1969- 70, is expected to be around Rs. 94. 62 crores. It will be recalled that in the Budget for 1969- 70, we had assumed central assistance of Rs. 66. 87 crores for the State Plan Schemes. The total central assistance, so far, promised by the Government of India including Rs. 2 crores for Nagarjunasagar and Pochampad projects is only Rs. 45 crores. A sizable gap in resources would arise if additional central assistance does not become available during the course of the year.

Annual Plan 1970- 71.

The circumstances in which the size and content of the Fourth Five-Year have not been finalised have already be referred to. The Annual Plan for 1970- 71 has, therefore, been formulated with reference to the general directions is of development envisaged in the draft Fourth Plan and the continuing commitments carried on from the previous years. During the discussions with the Planning Commission, it was indicated that the resources available for the Annual Plan will be only Rs. 56 crores consisting of State's resources of Rs. 13 crores and the likely central assistance of Rs. 43 crores. Recognising, however, that the compulsions of development will make it impossibly to restrict the Plan outlay to this limit, the Budget envisages a total Plan outlay of Rs. 77- 39 crores for the State Plan schemes during the year 1970- 71, inclusive of the power programmes to be financed by the Electricity Board from their own resources.

In addition to the outlay of Rs. 77. 39 crores, referred to above, it is proposed to augment the plan outlay by Rs. 15 crores latter, for the special development of Telangana, Rayalaseema and over backward areas of the coastal districts. It is also proposed to allot an amount of Rs. 2 crores for the expenditure on the special programme of tribal development during 1970- 71, out of this additional provision.

Of the total outlay of Rs. 77. 39 crores, Rs. 47. 89 crores will be incurred on schemes relating to the Andhra region and Rs. 29. 50 crores for schemes in Telangana region. Power and Irrigation sectors will continue to account for a major share in plan outlay, the allocation being Rs. 34. 57 crores and Rs. 19. 95 crores respectively. The outlay on Rural Electrification programmes, which would continue to get high priority, will be Rs. 7 crores. Of the major projects, the outlay on Nagarjunasagar will be Rs. 10. 20 crores comprising of Rs. 0. 20 crore for the dam, and the balance to be divided roughly equally on both the canals; the outlay on Pochampad Rs. 6 crores and on Tungabhadra High Level Canal Rs. 2 crores. The provision for industries has been stepped up to Rs. 3. 28 crores as against the provision of Rs. 2. 28 crores in 1969- 70. It is also proposed to increase at a latter stage in provision for Rural Water Supply from Rs. 50 lakhs to Rs. 150 lakhs in 1970- 71.

No firm indication has been given by the Government of India on the quantum of central assistance for the Annual Plan 1970- 71. In the Budget, it has been assumed that central assistance to the extent of Rs. 56. 83 crores will become available to us for the implementation of the plan. Of this, Rs. 11. 58 crores is expected to be received as grant and Rs. 45. 25 crores in the form of loan.

Before going into the details of the financial transactions I wish to refer to some matters of general importance.

(i) Finance Commission: - with the inescapable and increasing commitments for relief measures, the additional demands on resources for the maintenance of law an order and the uncertain prospects of agriculture, the erosion into the base of resources has become a matter of considerable concern. In this context, it would be appropriate to make a reference to the Award of the Fifth Finance Commission which has come into operation from the current financial year. Honourable Members may recall that a summary of the recommendations was placed before the House during the last session. Broadly the position is as follows: -.

(Rupees in crores)

Fourth Finance Commission 1. 1969-74

Fifth Finance Commission

(i) Devolution of Taxes and 166.63 274.27


(ii) Grants under Article 67.55 65.01



Total: 234.18 339.28


(i) The Award of the Fifth Finance Commission has resulted increased devaluation to our state- as compared to the Fourth Finance Commission- to the extent of Rs. 105. 10 crores for the period of five years covered by its report. But our hope that the State's finances will be brought to a state of stability was not fulfilled, as many of the inevitable commitments were not accepted by the commission in full.

(ii) Telangana Surplus: - the House is fully aware of the decisive and determined efforts that are being made by the Government for the development of Telangana. We had hoped that by the time this budget was presented, the report of the Bhargava committee would have become available. The report is, however, still to be published by the Government of India and after its reliefs, it will be possible for us to spell out in clearer quantitative terms, the special resources allocation to the Telangana region.

(iii) Planning and Development Board for Rayalaseema: -
the Government have set-up a Planning and Development Board for Rayalaseema, including among its members, the Members of Parliament and State Legislature, District Collectors and Chairmen of the Zilla Parishads. The Board is charged with the task of Planning and implementation for the Rayalaseema area with the object of eradicating famine and accelerating the pace of development of the region. The Board has commenced its deliberations and the Sub- Committees set-up by the Board have visited the various districts. It is hoped that the emergence of this institution will pave the way for the speedier development of Rayalaseema area, which has suffered from the ravages of famine for too long a period in history.

(iv) Tribal Welfare: - The Government have recognised, in a larger measure than in the past, the need for speedier implementation of the programmes for the economic improvement of the weaker sections of the society, particularly, the Scheduled Castes, the Scheduled Tribes and other Backward Classes. A comprehensive Plan for Tribal development is proposed to be put into implementation, with a special provision of Rs. 10 crores, for the remaining period of the Fourth Five-Year Plan. The plan will include programmes of agriculture, minor irrigation, provision of credit facilities, improvement of communication is etc. The Government have promulgated the Andhra Pradesh Mahals ( abolition and conversion into Ryotwari) regulation, 1969 and the Andhra Pradesh Muttas ( abolition and conversion into Ryotwari) regulations 1969, for the purpose of abolishing the intermediary tenures, still in existence, in the Scheduled areas of the state. A Regulation has also been made imposing further restrictions on the transfer of land in Scheduled areas to non- tribals. Another Regulation providing for the scaling down of debts incurred by tribals as well as for moratorium in respect of these debts will come into force shortly. Government have also issued orders banning the assignment of Government lands in favour much non- tribals in all the Scheduled areas of the state. It is also proposed to strengthen the Andhra Pradesh Scheduled Tribes Corporation and also to secure adequate credit facilities for the tribals from the commercial banks.

(v) Welfare of Scheduled Caste and other Backward Classes: -
In respect of the programmes of Welfare of Scheduled Castes and other Backward Classes, a larger programme is proposed to be undertaken in the coming year. The Commission set-up to prepare a list of Backward Classes is at the final stages of its deliberations and its report is expected very shortly.

(vi) Assignment of Waste lands: - Another major step taken up by the Government as apart of the policy of improving the economic conditions of the poorer section is of the society is the increased emphasis placed on the distribution of the Government lands in favour of the poor. A special crash programme of land assignment has been put into implementation from 1st November, 1969. The programme provides, among other things, for the constitution of village and taulk committees and the association of local representatives was with the schemes. An extent of 2 lakh acres of land has already been distributed. The implementation of the crash programme will not only result in the amelioration of the economic conditions of the land less poor but also lead to increased production due to the more effective utilisation of the land resources of the State.

(vii) Land Reforms: - In the context of the present policy of the Government to accelerate the implementation of Land Reform measures, a provision of Rs. 50 lakhs towards payments to land owners for lands taken over under the Land Ceiling Act has been made. This will expedite the process of taking over the excess lands and their distribution on to the land less poor.

(viii) Formation of Ongole District: - The House is aware of the formation of the new district of Ongole- the twenty- first district in the state formed out of Kurnool, Guntur and Nellore districts. This will be in fulfillment of the long standing desire of the people of these areas. The creation of the new district is expected to result in better administrative arrangements, providing for a more effective implementation of all the governmental programmes- developmental and non- developmental. Administrative reorganisation, by itself, may not be a solution to the problem of development. But the developmental programmes, in a sense, resolve themselves finally into well defined find administrative tasks and it is in rendering these tasks easier that the administrative arrangement assume importance.

(ix) Staff Welfare: - The well- being of the employees has always been receiving the utmost attention from the Government. A brief summary of the various important measures introduced by the Government in the recent years to afford Ford relief to the employees is given in a separate brochure.

I shall now turn to the details of the financial transactions.

Account 1968- 69.

The account for the year 1968- 69 which are now available indicate a revenue surplus of Rs. 8. 50 crores during the year, with the revenue receipts amounting to Rs. 238. 60 crores and with the revenue expenditure Rs. 230. 10 crores. Taking all the financial transactions together, the year showed an over all deficit of Rs. 5. 27 crores. The cash balance at the end of 1968- 69 stood at Rs. (-) 0. 97 crore, taking into account the opening cash balance of Rs. 4. 30 crores.

Revised Estimates 1969- 70.

Revenue account: - As against the Budget Estimates of Rs. 254. 79 crores, the Revenue Receipts of the year are expected to be Rs. 255 crores. Revenue Expenditure is now expected to be Rs. 281. 76 crores as against the Budget Estimates of Rs. 267. 36 crores.

In the Budget Estimates, lumpsums provision was made under different heads of account for meeting the additional expenditure due to increase in pay and allowance is of employees and this amount has now been distributed among various heads of account on the basis of assessed requirements. The Revised Estimates provide for the additional expenditure for countering Naxalite activities and for relief to cyclone victims.

Capital outlay: - The Budget for 1969- 70 provided for a total Capital Outlay of Rs. 39 opinion 74 crores. The Revised Estimate under Capital outlay has now been placed at Rs. 40. 91 crores.

Overall Position: - On the basis of the Revised Estimates indicated above, the transaction of the year 1969- 07 are expected to result in an overall deficit of Rs. (-) 13. 46 crores, resulting in a closing cash balance of Rs. (-) 14. 43 crores. It should be added, however, that the Budget assumes additional central assistance of Rs. 26. 75 crores for the State Plan and the final picture that would emerge would depend on the extent to which this expectation materializes.

Budget Estimates 1970- 71.

Revenue Receipts: - The Budget Estimates for 1970- 71 envisage a total revenue of Rs. 265. 96 crores, as against Rs. 255 crores anticipated in the Revised Estimates for 1969- 70. The increase is mainly accounted for by increased receipts under State Excise due to the scrapping of prohibition in Andhra area and increase in State's share of central taxes. Credit has also been taken for Rs. 11. 58 crores as grant from the centre for the state plan and for grant of Rs. 6. 91 crores towards centrally sponsored schemes.

Revenue expenditure: - the budget provides for revenue expenditure of Rs. 266. 43 crores consisting of Rs. 247. 94 crores on the non- plan side, Rs. 11. 58 crores towards the State Plan and Rs. 6. 91 crores on the centrally sponsored schemes. The apparent decrease in the non- plan revenue expenditure, compared to Rs. 260. 33 crores in the Revised Estimates for 1969- 70 is mainly due to the absence of provision for drought and cyclone relief.

Capital Outlay: - The Capital outlay on the Plan and non- Plan schemes is expected to be Rs. 39. 46 crores during the year 1970- 71. The provision on non- Plan Account, which relates only to minor items of capital nature is Rs. 3. 96 crores, compared to the Revised Estimates of 1969- 70 of Rs. 3. 31 crores. On the Plan, the Capital outlay will be Rs. 35. 50 crores and this would include the provision for the major projects in the different sectors of the Plan, the details of which have been referred to earlier.

Public Debt: - The Budget includes receipt of Rs. 18 crores being the proceeds from the Open Market Loan to be floated during the year and for Rs. 5. 49 crores towards the loans maturing for repayment during the year. The net receipts from the share of Small Savings are expected to be Rs. 3 crores. A provision of Rs. 6 lakhs has been made in the Budget for marriage advances to Government employees.

Overall position: - On the basis of the estimates above, there will be a deficit of Rs. 0. 47 crore on the Revenue Account. Taking the Capital transactions, Public Debt and Public Account together, there will be an overall surplus of Rs. 14. 30 crores.

: - The year 1970- 71, as stated earlier, is expected to open with a minus cash balance of Rs. 14. 43 crores. Taking the surplus of the year's financial transactions, the year 707 is expected to close with a negative cash balance of Rs. 0. 13 crores.

I shall now refer briefly to certain main additional provision made in the Budget.

(i) Honourable Members may recall that during 1969- 70 a special provision of Rs. 1 crore was set apart towards expenditure on Harijan Welfare and Welfare of Scheduled Tribes in the context of Gandhi Centenary Celebrations. The Budget contains the required provision for keeping up the momentum of development. The provision for land acquisition for providing house sites for Scheduled Caste, Schedule Tribes and other Backward Classes has been enhanced to Rs. 1 crore.

(ii) An amount of Rs. 15 lakhs for strengthening of police and Rs. 15 lakhs for the purchase and replacement of police vehicles were provided in the Budget for 1969- 70. Further improvements are proposed to be undertaken during 1970- 71 and for this purpose, an amount of Rs. 50 lakhs has been included in the Budget Estimates.

(iii) Honourable Members are aware that the expenditure on Education has been stepped up from year to year. The Budget for 1907- 71 provides Rs. 54. 60 crores for Education, as compared to Rs. 52. 95 crores in the Revised Estimates of 1969- 70. If the amount provided separately for Medical Education, education of Scheduled Caste, Scheduled Tribes and other Backward Classes, etc, are also taken into account, the total expenditure on Education during 1907- 71 is likely to be well over Rs. 60 crores.

(iv) In order to provide finances for slum clearance schemes, it is proposed to enhance the amounts provided for compensation to Municipalities for loss of income towards Motor Vehicles Taxation. An amount of Rs. 26.21 lakhs is being provided in the Budget and this amount is intended to be released towards specific schemes of slum clearance.

(v) The House is aware of the comprehensive relief programme taken up in the context of the large scale damage in different parts of the state. The Government of India have approved a programme of the order of Rs. 34 crores an the required provision for this relief expenditure has been made in the Revised Estimates for 1969- 70.

(vi) A provision of Rs. 115 lakhs has been made for Old- age Pensions.

There are no taxation proposals in the Budget. But this should not make us feel complacent. No doubt, additional revenues are expected to be realised due to the scrapping of prohibition in Andhra area. But our needs are ever growing and unless we prefer to remain static, we have to explore fresh avenues of taxation to fulfill the commitments to the people.

The Fifth Finance Commission recommended the re- examination of the scheme of levy of additional excise on Textiles, Sugar and tobacco. The matter is to be discussed and decided by the National Development Council. Another area of taxation recommended for a closer study relates to the taxes specified in Article 269 of the Constitution. It is hoped that the resources position of our state would register an improvement as a result of the decisions that may be taken in respect of these taxes.

Before concluding, I would again refer to the factory that the fulfillment of our Plan depends largely on the additional Central Assistance. We have also requested the Government of India for the re- scheduling of our debts, which have mounted in volume in view of the large scale developmental programmes undertaken with the aid Loan Finance from the Centre. It is our hope that the Government of India, will accept our request. At the same time, I would reiterate the need on your part to observe financial discipline and ensure strict economy in expenditure. It shall be our endeavour during the year to achieve the object of securing financial stability and all round economic growth in our State.

I thank you, Sir and the Honourable Members for giving me a patient hearing and with your permission, I now present the Budget of the State for 1970- 71.

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