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Budget Speech

Speech of
Sri A. Bhagavantha Rao,
Minister for Finance

presenting the Budget for 1972-73
to the Andhra Pradesh Legislature
on the 23 rd June, 1972.



I rise to present the Budget of Andhra Pradesh for the year 1972-73.

Hon’bl Members would recall that at the time of seeking the approval of the House for the Interim Budget in March 1972, I had indicated that I shall be coming later during the year with the full Budget. The Final Budget 1972-73 now placed before you is a fulfilment of this commitment.

Presenting the ‘Vote on Account’ Budget, I could only reaffirm the guiding objective to which this Government was firmly and irrevocably committed, i.e., growth with social justice. I also recall, having assured the House that we shall not merely be content with getting better results within the existing frame-work of economic and social institutions but shall endeavour to mould and re-fashion these so that they contribute effectively to the realisation of wider and deeper social values.

While I shall have occasion later to refer to the various programmes in detail undertaken by the Government for the economic and social betterment of the vulnerable sections living below the line of poverty, I would like to take the earliest opportunity to inform the Hon’bl Members of the measures initiated by this Government to reshape the ownership of Urban Immovable Property so as to subserve the common good. The Andhra Pradesh Agriculture Lands (Prohibition of Alienation) Ordinance, 1972 was promulgated by the Governor of Andhra Pradesh on 2nd May, 1972. The ordinance prohibits the alienation of land by any person whose holding exceeds 4 hectares of wet land or 10 hectares of dry land. Hon’bl members are well aware that as a first step towards making the Ceilings Law more effective, many of the exemptions in favour of certain classes of land were removed through Statutory amendment to the Act last year. Subsequent to this, Government have received the recommendations of the Central Land Committee proposing reduction in the ceilings on agricultural holdings. Government

after careful consideration of the recommendations, having been satisfied that increased agricultural production and significant improvement in the economic and social well-being of the weaker sections are organically linked up with basic institutional reforms on the agrarian front, have lost no time in bringing about this legislative measure. The Ordinance prohibits alienation of agricultural lands mainly with a view to ensuring that the proposed reform is not frustrated by large scale transfers of land. Yet another Ordinance is the Andhra Pradesh Vacant Lands in Urban Areas (Prohibition of Alienation) Ordinance, 1972. This Ordinance which was promulgated by the Governor on 5th June 1972, prohibits alienation of vacant lands in urban areas, subject to certain exceptions specified therein. As in the case of the Ordinance prohibiting alienation of agricultural lands this also is designed to freeze alienations or urban vacant lands pending comprehensive Legislation on the subject.

These structural reforms constitute the back-drop for the integrated rural development programmes that the Government propose to embark upon during this year for widening the employment base and providing basic social and economic overheads in terms of communications, education, health, housing and water-supply.

I shall now briefly review the activities of the various Departments and outline their major programmes for the current year.


Our objective has been to diversify agricultural production by emphasising intensive cropping of food crops and encouraging a deliberate shift to high value commercial crops. In pursuance of this, the strategy has been to improve the per acre yields through a package of improved practices comprising scientific water-management, high yielding varieties of seeds, plant protection and fertilisers. Simultaneously, the emphasis has also been on evolving a cropping pattern that will increase production of commercial crops of significance, viz. Oil-seeds, Tobacco, Cotton, Sugar-cane.

During the previous year, added to our commitment to contribute to the Central buffer-stock, we had also to build up a sizeable exportable surplus, particularly for Bangla Desh. In Rabi, 1971-72, therefore, a Crash Programme for additional food production was launched and steps were taken to cover over 8 lakh hectares under high yielding varieties of paddy to enable the State to export about 50,000 tonnes of rice to Bangla Desh. As an incentive to the farmers for switching over to these varieties, distribution of paddy seeds was also made on a subsidy basis.

This year, it is programmed to cover 29.6 lakh acres under paddy, 1.75 lakh acres under wheat, 5 lakh acres under hybrid jowar, 3.2 lakh acres under hybrid bajra and 1.2 lakh acres under hybrid maize. In order to achieve these targets, the production of quality seeds, supply of fertilisers and pesticides, expansion of irrigation potential and the organisation of farmers’ training and educational programmes have been intensified. Quality seed is being produced in 37 State Seed Farms and development of these Farms has been taken up in a planned manner. This will be continued in 1972-73.

To facilitate quick detection of pest and disease we embarked upon a surveillance programme on paddy during 1971-72. The scheme for subsidised distribution of Mist Blowers to farmers who take to contract spraying as part time avocation was implemented in the three districts of the State last year. It is proposed to cover the Entire State under this programme. During this year, it is proposed to intensify the plant protection measures on high yielding varieties and commercial crops by organising mass spraying both by ground and aerial equipment.

Coming to commercial crops, under Sugar-cane Development Scheme, it is proposed to create an additional production potential of 4.16 lakh tonnes during the current year. Under the centrally-sponsored scheme for the development of extra-long-staple cotton, special schemes for production of 1.05 lakh bales of cotton have been sanctioned. Another centrally-sponsored scheme for the development of rain-fed cotton, has also been implemented in Kurnool district covering an area of 15,000 acres, the anticipated production being of the order of 1,500 bales. For increasing per acre yield of cotton in Adilabad district, foliar spraying and ground application of fertilisers are being recommended under the programme of intensive cultivation of rain-fed cotton covering an area of 39,400 acres. Encouraged by the performance of hybrid-4 variety of cotton which has a long staple length with an yield of about 15 quintals per acre, it is proposed to bring 10,000 acres under this variety both under rain-fed and irrigated conditions during this year

Agro-Industries Corporation

The Andhra Pradesh State Agro-Industries Corporation Ltd., has programmed to import tractors worth Rs.1.5 crores during 1972-73. The Corporation has also signed an agreement with the International Development Association along with the Agricultural Refinance Corporation and the Andhra Pradesh Co-operative Central Land Mortgagee Bank Ltd., to import 1,500 tractors of 30 H.P. and above under the Andhra Pradesh Agricultural Credit Project. This is in addition to the import of tractors worth about Rs. 1.5 crores. The Corporation is processing the details of the import and expects to receive the tractors for distribution during the year.

The Corporation will also be undertaking the distribution of 3,600 Metric Tonnes of G.P., G.C. sheets (worth about Rs.90 lakhs) to the agriculturists. Under land development activity, the Corporation will be rendering assistance to farmers for seasonal operations like ploughing, harrowing, puddling, Inter-cultivation, threshing, etc. in addition to cotton spraying on a large scale. Further, the Corporation proposes to undertake the distribution of pesticides and fertilisers during 1972-73

Ground Water Exploration

Hon’ble Members are well aware that in response to persistent demand both within and outside the House for setting up an organisation for a systematic investigation and exploration of the Ground-water potential in the State, a separate Ground Water Directorate was established in February 1971. The Directorate has so far scrutinised and cleared schemes for Rs.16 crores sent by the Andhra Pradesh Co-operative Central Land Mortgage Bank Ltd., Commercial Banks, etc.

Under Ground-Water monitoring programme in Pochampad area, about 60,000 hectares have been covered by hydro-geological surveys out of the total area of 1,00,000 hectares. The preparation of a Project Report in connection with Ground-water Development under the Telangana Perspective Plan is being taken up. Under Small Farmers Development Agency and Marginal Farmers and Agricultural Labourers schemes, technical feasibility surveys for implementation of minor irrigation programmes are in progress in 6 out of the 9 taluks of Srikakulam, Cuddapah and Nalgonda districts

Animal Husbandry

In our State, live-stock is a very important sector in the State’s economy, perhaps, next only to Agriculture. Accordingly, considerable attention and priority is given for the development of Animal Husbandry in the State Plan, particularly, in view of its importance as a supplementary activity to Marginal and Small Farmers. The broad pattern of programmes designed in this designed in this direction have been (I) to improve the breeds of live-stock by cross-breeding in selected Block areas; (ii) improving the supply of balanced feed and nutritious fodder; (iii) encouraging commercial poultry with a view to providing subsidiary occupation to the rural population; and (iv) delineating milk-shed areas and development of cattle to coincide with the Dairying programmes.

With a view to increasing milk production in the milk-shed areas of Hyderabad and Vijayawada, Intensive Cattle Development Blocks have been established covering a breedable bovine population of 2.95 lakhs in 784 villages in the State. One more Intensive Cattle Development Block has been sanctioned in Warangal area of Telangana region.

During the past five years, it has been possible to increase the milk yield by over 30% by resorting to cross-breeding and adoption of improved and scientific animal husbandry practices. The three feed mixing plants set up at Buddavaram, Gudlavalleru and Bhongir with the World Food Programme Aid Grains have been supplying blanched feed which has considerably improved the quality and quantity of milk in the area. Government have sanctioned one more feed mixing plant at Karimnagar under the Special Telangana Development Programme. This will be established during the current year.

Organised poultry farming with exotic birds has been quite popular in the urban areas. There are now 539 large and small commercial farms besides numerous family flocks serving as a subsidiary source of income to the families concerned. There are about 1.25 lakhs exotic breed of poultry in the twin cities. People in the rural areas are also taking progressively to poultry farming as a subsidiary source of income, as well as a good source of valuable organic manure to their lands. The establishment of six poultry production –cum-marketing centres and 13 Sub –centres which provide technical know-how and marketing facilities for the produce has given a further impetus to poultry farming, especially, in the rural areas. The three marketing centres at Visakhapatnam, Vijayawada and Hyderabad are also manufacturing pre-mixed feed by utilising the free maize supply made available through the World Food Programme Project-353 and supplying the feed to the breeders practically on a no-loss no-profit basis

Dairy Development

The dairy development programme touched a new high last year, bringing in sizeable economic gains to the rural people. More and more agriculturists throughout the State are becoming increasingly conscious of the important role which dairy industry can play in augmenting their incomes speedily and substantially.

The procurement of milk at the Integrated Milk Project, Vijayawada reached the first phase rated capacity of 1.25 lakh litres per day. Plans are under way to strengthen the factory to increase its handling capacity upto 2.5 lakh litres per day with the financial assistance offered by the Indian Dairy Corporation under the ‘Operation Flood Programme’. It is also proposed to strengthen the Central Dairy, Hyderabad, by establishing a products section with a milk powder plant to increase the present off-take of milk.

With the opening of the producers’ Co-operative Societies in the Integrated Milk Project in the Vijayawada area and the provision of financial assistance by Co-operative and other Commercial Banks, the weaker sections of the people have been benefited considerably through loans provided to them for the purchase of milch animals. The State Government have extended a guarantee of Rs. 50 lakhs to the Apex Bank for providing loans for the purchase of milch animals to the members of these co-operative societies


Government consider co-operatives as a useful form of organisation for achieving the objective of growth with social justice. While the important role that this form of organisation can play particularly in the field of provision of credit and marketing can hardly be exaggerated, Government, of late, have been perturbed over certain developments in this sector which have tended to weaken the co-operative credit structure as well as to almost dry up the flow of funds to the weaker sections of the Society. Non-viability of Societies, weak internal resources of the Primary and Central Banks, inadequate representation of the weaker sections in the management of the Co-operative Institutions etc., are some of the factors which have been isolated as being responsible for the inertia in the Co-operative sector. We are therefore anxious to re-invigorate the co-operative institutions and direct the course of their activities primarily to benefit the underprivileged.

Towards this end, the Government have during the recent past, initiated a series of measures such as (a) strengthening the co-operative structure through amalgamation of Primaries and extending financial support to weak Central Banks; (b) providing a clear-cut definition of the ‘small farmer’ and insisting on a certain percentage of representation to these sections in the management of various co-operatives; (c) ensuring that priority is given to these sections in respect of flow of co-operative credit by insisting that a substantial part of the resources should flow to these sections; and (d) organising and promoting co-operatives specially designed for weaker sections, i.e., Rural Artisans, milk Co-operatives, etc.

During the year 1971-72, the co-operatives disbursed short-term and medium term loans for agricultural purposes to the extent of Rs. 27.91 crores. For the current year, a target of Rs. 32 crores has been fixed. Regarding long-term loans, during 1971-72 loans issued by the Primary Land mortgage Banks amounted to Rs. 17.2 crores. Out of the 55 Area Development Schemes sanctioned by the Agricultural Refinance Corporation, 15 schemes were completed. The programme for 1972-73 is to sanction loans to the tune of Rs. 25 crores. The Andhra Pradesh Co-operative Central Land Mortgage Bank has also formulated land development schemes with credit assistance from the World Bank. The International Development Association has agreed to lend an amount equivalent to $24 million. This will be utilised for taking up minor irrigation schemes, land levelling, purchase of tractors, etc.

Out of the 25 Co-operative Banks in the State, 13 are considered as Weak Banks as per the guide-lines suggested by the Reserve Bank of India. Rehabilitation programmes for strengthening these Banks have been drawn up and sizeable special assistance given by the Government by way of long-term loans and share capital contribution to them. Till 1971-72, a sum of Rs. 127.35 lakhs as long-term loans and Rs. 192.35 lakhs as share capital contribution was made available to the weak Co-operative Central Banks. During the year 1972-73, it is proposed to sanction Rs. 37 lakhs to the Weak Co-operative Central Banks to improve their economic viability. Yet another measure for the development of the working of the Co-operative Central Banks is the augmentation of their internal resources by mobilising larger deposits. A scheme has been evolved by the Government to award prizes to such of the Co-operative Central Banks which tap more deposits from individuals.

Regarding specific schemes designed for the welfare of the weaker sections, I shall refer to them in detail during the course of my Speech, when I shall deal at length with the welfare of the weaker sections


Government regard industrial development not only as a contributor to an increase in the Gross National product but they view it more importantly as an instrument to promote and accelerate balanced, integrated growth of the rural areas, designed to bring about an urban-rural areas, designed to bring about an urban-rural continuum, and as a means to increasing qualitative improvement and a greater diffusion of skills. With a view to achieving these goals, four courses of action will be systematically pursued:

Provision of incentives and encouragement for the dispersal of small scale industries;

Promotion of agromineral, and forest-based industries from the standpoint of both employment creation and resources development;

Assistance to establish appropriate clusters of ancillary industries to large scale industrial undertakings;

Dovetailing of programmes for industrialisation with those in other sectors, mostly in agriculture and especially those benefiting the small farmers and the weaker sections of the society.

Industrial growth is a composite activity, encompassing both large and scale and small scale industries. To generate and sustain coordinated development of both the sectors, all the possibilities of promoting complementarily between the two will be explored and realised. Even within the small scale sector, Government are aware of a dualism between the ‘modern’ type of decentralised small factories, and the ‘traditional’ type of house-hold and cottage industries. Policy measures would be taken to reduce the gap between these two sectors in productivity organisational framework, techniques of production and managerial competence. In this regard, special attention has been given to the vast number of handloom weavers and leather workers who are caught in the web of structural poverty.

In a recognisedly backward State like Andhra Pradesh, Central Sector investments are of crucial significance in speeding up industrial growth. The House in already aware of our success in securing the establishment of important Central-Sector projects such as the Steel Plant and the Zinc Smelter Plant at Visakhapantam, the coal-based Fertiliser Plant at Ramagundam and the like. We are now trying to secure the location of the three plants of the Cement Corporation of India in Andhra Pradesh, one at Yerraguntla in Cuddapah district, another at Tandur in Hyderabad district and the third in Adilabad. I am glad to say that the Central Government has been successfully persuaded by us to revise their earlier policy that Andhra Pradesh being surplus in cement should not be considered for the establishment of new factories by the establishment of new factories by the Cement Corporation. The three new projects are now under the active consideration of the Cement Corporation of India and the Government of India. Our efforts to secure these projects will continue.

The Andhra Pradesh Industrial Development Corporation is our main agency for the promotion of industries in the large scale sector. The Corporation has obtained letters of intent for the establishment of an automobile tyres and tubes factory which will be located in coastal Andhra, a continuous casting plant which will be in Telangana and a nylon yarn unit which will be set up in Rayalaseema—symbolic of the Government’s approach to a balanced regional development within the State.

The Corporation has identified 21 projects in the joint sector, covering almost all districts of Telangana at a total cost of nearly Rs. 22 crores, out of which the share of the Corporation will be Rs. 3.32 crores. For Rayalaseema area, it has identified 18 projects, costing about Rs. 10 crores, out of which the Corporation’s share will be of the order of Rs. 2 crores. The Corporation is presently engaged in the identification of similar projects for the coastal area and for the scheduled areas.

In the large-scale co-operative sector special mention is to be made of the new jute mills for which we are trying to get letters of intent. Particularly important among them is the Girijan Co-operative Jute Factory, to be set up in the scheduled area of Srikakulam district. We expect to get the clearance of the Government of India in the near future.

Licences or letters of intent have been received for 113 industrial units upto the end of March, 1972, with a capital cost of about Rs. 140 crores and estimated employment potential of about 35,000. The Industries Department is giving attention to secure the early establishment of these units. The number of applications recommended to the Government of India for the grant of letters of intent or licences which are still pending with them are 82.

Letters of intent have been received for 5 new Co-operative Sugar Factories. Efforts to secure letters of intent for 6 new Sugar Factories in the Public and the Co-operative Sectors will continue.

The small-scale Sector has been growing steadily. There are about 22,000 Small scale units registered as against about 3,500 units five years ago. The total investment in these units is of the order of Rs. 83 crores and their employment potential is nearly 1.6 lakhs. The units set up in the 39 industrial estates in the State account for the production of a versatile range of articles worth Rs.8.5 crores, providing employment to nearly 2,500 persons.

As is well known the largest single factor inhibiting the growth of small scale units is the scarcity of raw material. On our part at the State level, we have taken steps to ensure equitable and timely supply of raw materials to the various units and to streamline the procedures. For the first time, a Committee including representatives of the small scale manufacturers has been set up to deal with the various distributional aspects. We will be taking concerted steps to move the Government of India to increase the quota of various items of raw materials to this State.

The Andhra Pradesh small Scale Industrial Development Corporation continued to promote, assist and counsel Small-scale units. It has provided capital base to 37 Small-scale Industries by participating in equity or preference share capital. It has established an industrial estate in Hyderabad exclusively for technician-entrepreneurs, popularly known as the ‘Technocrats Estate’. A similar estate in Visakhapatnam is in the offing, as also construction of industrial guilds for craftsmen in Warangal and Mahaboobnagar districts to begin with. The main thrust of the activities of the Corporation would now be to promote and assist industries with maximum employment potential especially to cater to the educated unemployed.

Government are acutely aware of the frustrations of the educated unemployed youth and the heavy social cost of the existence of this phenomenon. The Hon’bl Members will be glad to know the effective use we have made of a rather modest sum of Rs.76 lakhs sanctioned by the Government of India for providing relief to the educated un-employed.

Under this programme nearly 3,000 schemes have been approved for participation in equity capital or margin money. These schemes entail a total investment of nearly Rs.7 crores and would provide employment to about 18,000 persons. Also, four technicians’ co-operatives consisting of engineering graduates and diploma holders have been registered and two units have gone into production. Besides three self-employment estates are being established in the twin cities and in the districts of Kurnool and Prakasam.

Identification of industrial possibilities in the various districts and local entrepreneurs to set up ventures has been part of our plan to decentralise industrial development. Intensified district campaigns have so far been conducted in four districts. The results are encouraging. An important strategy in the district industries programme is to locate nuclei of growth in each district, which are expected to be potential poles of progress.

The Ahdhra Pradesh Financial Corporation has been extending financial assistance to existing and new industrial units. The total loan sanctioned so far is of the order of Rs. 23.42 crores. During the financial year 1971-72, the Corporation sanctioned loans amounting to about Rs.4 crores, covering 275 units with an employment potential of about 54,000.

I am glad to state that the Industrial Development Bank of India and the industrial Corporation of India have opened their branches in Hyderabad, and these institutions as well as the other financing institutions including the banks and the State Financial Corporation are playing their role in the promotion of industrial development in the State. Currently, a team of officers from the Reserve Bank of India and the other central financing institutions are engaged in a survey of the industrial potential of the State. This survey as well as those already carried out will help identify appropriate industries that can be taken up in the State.

The difficulties of the handloom weavers have engaged the special attention of the Government during the years. The more important steps taken to promote their economic benefit and social welfare include:

Government guarantee to the Reserve Bank of India to the extent of Rs. 250 lakhs for a period of three years form 1st April 1972 to provide working capital to the Handloom Weaver’s Co-operative Societies to enable them to improve their production and marketing techniques;

Government guarantee to the State Co-operative Bank to the tune of Rs. 1 crore during the current financial year to provide funds to Weavers’ Co-operative Societies to install powerlooms;

Introduction of a Group Insurance Scheme for 20,000 weavers; and

Various schemes are being worked out to give fillip to the leather industry and thus to improve he conditions of leather workers. A major development in this behalf is the proposal to set up a Leather Corporation for the State.

In the sphere of mineral development, the accent is on the establishment of mineral-based industries, especially, in the backward areas. I am glad to report that after sustained efforts over a long period of time, the Bharat Gold Mines Private Ltd., have agreed to commence exploratory activities in the Ramagiri Gold Field in Anantaprur District. Preparatory work in this regard has already started. We have also been able to persuade the Government of India to continue the exploration of Copper deposits in Mailaram by the Geological Survey of India. Steps are also being taken to expedite full investigation of bauxite deposits in Visakhapatnam District. .Intensification of work in respect of Ramalakota and Vajrakonda diamond deposits is still being pursued with the Centre.

Intensification of efforts and the expansion of activities in the various arenas in the industrial field, it is hoped, will make significant contribution to the economic growth of the State and to a marked improvement in the levels of living of our people


Consistent with the Fourth Five-year Plan objective of completing the irrigation projects already taken up and ensuring full utilization of the potential created so as to reduce the impact of the vicissitudes of the monsoons on the large projects already taken up, especially, Nagarjunasagar and Pochampad and take up medium irrigation projects, particularly in the scarcity affected areas such as Rayalaseema and Srikakulam.

In respect of Nagarjunasagar Project, as the Hon’bl Members are aware, work on the construction of the Dam has been completed. Work on the canals is in progress. Additional irrigation potential has been created for 55,000 acres during the year 1971-72 and this brings the total ayacut for which irrigation potential has been created form the commencement of the project to 10.21 lakh acres. On the Right Main Canal, nearly 66% of the total estimated work-load of excavation has been completed. On the Left Main Canal 89.46% of the total estimated work-load of over 2.83 Lakh acres. The expenditure incurred on Nagarjunasagar Project during 1971-72 was Rs.10.62 crores. The expenditure incurred so far from he commencement of the Project is Rs. 178.89 crores. The plan provision for 1972-73 is Rs. 7 crores.

Work on Pochampad Project is also fast progressing. Work on the construction of the Dam is in progress. The execution of Pochampad project works upto Mile 71/7 of G.S. Canal in order to create an irrigation potential of 2.5 lakh acres by June 1976 is now linked up with World Bank assistance. The International Development Association has agreed to lend an amount equivalent to $39 million for financing the project. An expenditure of Rs. 45 crores is envisaged on the project during the Fourth Plan period. The earth-work excavation of G.S. Canal from 0/0 to 22/4 is almost completed. The earth-work excavation from 22/4 to 51/0 in progress. The expenditure incurred on the Project during 1971-72is Rs. 932 lakhs. The cumulative expenditure from the commencement of the Project is Rs. 36.22 crores. A provision of Rs. 10 crores has been made in the Plan Budget for 1972-73.

The Vamsadhara Project is proposed to be constructed in two stages. The first stage envisages construction of a Barrage at Gotta across Vamsadhara. This is estimated to cost Rs. 864 lakhs and the estimated ayacut is 1,48,300 acres. The Planning Commission has also conveyed its concurrence to the Vamsadhara Project Stage-I. During the current year, an amount of Rs. 80 lakhs has been allocated for the scheme. To accelerate the execution of the scheme, the Government are also exploring the possibilities of obtaining World Bank assistance for the Project.

The Project report on Somasila Project has been forwarded to the Central Water and Power Commission and is pending technical clearance.

The Planning Commission has conveyed its approval for the Pulivendla Canal Scheme at a cost of Rs. 265.5 lakhs for works and Rs. 290.13 lakhs including direct and indirect charges. On the suggestion of the Rayalaseema Development Board the Government have decided to break up the scheme into two parts, viz., the Canals, the scheme has been notified for levy and collection of advance betterment contribution. The current year’s Budget provides for a sum of Rs. 20 lakhs for the scheme.

Hon’bl Members are aware that the State Government has taken up in a big way the execution of various drainage Schemes in the krishna-Godavari delta area costing about Rs. 70 crores. During the last three years, an amount of Rs. 12.65 crores was spent on drainage works. The Delta Drainage Board has formulated a programme of works for works for execution during the current year. It is intended to take up works of the value of Rs. 3.5 crores during this year, if the same trend of drainage cess collections continues


Inspite of the fact that progress in the power sector has been impressive in the last few years, when compared to other States in the region and the All India average, the per-capita consumption of power in the State is very low. This sector therefore continues to receive serious attention of the Government. The importance assigned for the development of power in our plans is based on the recognition of the fact that Power is indispensable for growth both in agriculture and industry.

The work of Ramagundam Thermal Scheme ‘B’ Station was completed and the 62.5 MW unit of this station was commissioned raising the installed capacity in the State was commissioned raising the installed capacity in the State to 668 MW including 30 MW of cold standby capacity. Inspite of this, the State had to face serious power shortage mainly due to low water levels in the hydel reservoirs. The power position is constantly under review.

In the Srisailam project the road bridge across krishna has been completed and thrown open to public.

According to the latest estimates of the Power Survey Committee of the Government of India (I.e., the Seventh Annual Electric Power Survey), the peak demand in the State is expected to reach 884 MW in 1973-74 and 1008 MW in 1974-75. The Kothagudem Stage-III Project which is under construction is expected to generate 110 MW in 1972-73 and another 110MW in 1973-74. Lower Sileru Hydro Electric Project is proposed to be commissioned in 1975. To cope with the increasing load demand in the future years, more installed capacity needs to be added to the system. The Government is providing the highest outlay for Power Sector during successive Five-Year Plan periods for development of power. Further, steps have to be taken to see that the financial requirements of generation schemes are fully met and that the economic growth in the State is not hampered for want of electricity. With this view, besides the lower Sileru and Srisailam Projects which will continue in the Fifth Plan, proposals are formulated for installing additional Thermal capacity at suitable locations in the State during the Fifth Plan period. Projects Reports have been formulated for a 2x200 MW Thermal Station at Vijayawada and another 2x100 MW Thermal extension at Kothagudem. Nagarjunasagar Pumped Storage Hydel scheme with an installed capacity of 2x50 MW has been cleared by the planning Commission and the work on it will be taken up. The Government of India have been requested for establishing a Nuclear Power Station in the State. Details of certain locations were also furnished to the Site Selection Committee set up by the Government of India for selection of suitable locations for Nuclear Power Stations in the Country/

The Rural Electrification Programme was implemented vigorously during the year 1971-72 under he Plan Programme and also with the assistance received from the Rural Electrification Corporation, Commercial Banks, etc.

Out of all the 11 Cluster Schemes approved for execution in the

State with the financial assistance of the Rural Electrification Corporation, the programme in SircillaTaluk of Karimnagar District has made significant progress. By the end of March 1972, the Society has electrified 61 villages giving agricultural service connections to 2,384 beneficiaries and house service connections to 4,720 rural house-holds


The educational policy of the Government has been so designed as to promote social change and contribute to economic growth. This objective is sought to be achieved by (a) providing facilities for Universal Elementary education and general education; and (b) by ensuring that the system of education of supplies skilled manpower for developmental needs. Primary Education has become compulsory in the State with the introduction of the Andhra Pradesh Primary Education Act, 1961. At present about 97% of the rural population has been made free upto 10th Class in the State with effect from the academic year 1968-69.

The enrolment in the age groups of 6-11 and 11-14 has gone up steadily from 29.76 lakhs in 1960-61 to 39.29 lakhs. We are taking special steps like free distribution of text books and mid-day meals programme to improve the enrolment. Under the mid-day meals programme there are now nearly 8 lakh beneficiaries. In the year 1972-73

We propose to increase the number of beneficiaries by one lakh at an approximate additional cost of Rs. 5 lakhs. An important feature of this scheme is that whether the Scheduled Castes and Scheduled Tribes children are included in the programme first fefore it is extended to supply of free bottle milk to school children in the twin cities in the age group 6-11. Nearly 30,000 school children are covered by this programme. It is proposed to set up a central kitchen in Hyderabad at a cost of Rs. 1 crore for manufacturing "ready to eat" palatable food which will substitute the present mid-day meal of cooked food. This central kitchen will cater to parts of Telangana area and it is expected that this will go a long way in improving the enrolment.

Another important measure is the supply of free text books and writing material to school children in the age group of 6-11. He scheme was introduced last year as a centrally-sponsored scheme and in the first stage 25,000 beneficiaries (exclusively from Scheduled Castes and Scheduled Tribes) are being covered at an approximate cost of Rs. 75,000. It is proposed to increase the number of beneficiaries to one lakh, and the total estimated expenditure is Rs. 5 lakhs.

The Government has also decided to establish Technological University in the Campus of the Regional Engineering College, Warangal in the interests of development and maintenance of high standards of technical education.

The Government have also decided to establish a Technological University in the Campus of the Regional Engineering College, Warangal in the interests of development and maintenance of high standards of technical education.

We have also been conscious of the need to relieve unemployment among teachers. Last year 900 secondary grade teachers were appointed at a cost of Rs. 25 lakhs. For the current year we propose to appoint 425 B.Ed., Headmasters and 200 language pandits. A provision of Rs. 17.5 lakhs has been made in the State Budget for this scheme. The Government of India have been approached to sanction about Rs. 1 crore for appointment of nearly 4,300 teachers in the year 1972-73. Of these, 2,000 additional teachers will be secondary grade trained, 1,350 will be B.Ed., Headmasters and 950 Telugu Pandits. These teachers will be mostly appointed in rural areas and it is expected to improve enrolment as well as the quality of teaching in the rural schools

Rural Water Supply and Urban Development

The objective of rural water supply programmes has been providing adequate and healthy water to the needy areas in the State. The Strategy adopted is to catergorise the villages on an assessment of the acuteness of the problem and take up programmes on priority basis. In view of the magnitude of the problem, utilization of institutional finances by the various local bodies is also envisaged.

A thorough and systematic survey conducted to identity the scarcity areas disclosed that about 63% of the villages and hamlets in the State only had water supply facilities. The enquiry revealed that 20,149 villages and hamlets were to be provided with drinking water facility. During the current year a sum of about Rs. 124 lakhs is provided in the budget for expanding provision of drinking water to a large number of villages. Sophisticated mechanical equipment such as rigs are also being pressed into operation o speed up the implementation of the programme. UNICEF has so far provided 14 rigs to the State for taking up bore-wells programme in the scarcity areas. This has enabled us to make considerable headway in the direction of rural water supply in the chronically drought affected areas of Rayalaseema and Telangana. So far, over 2,214 bore-wells have been sunk in these areas with the help of UNICEF rigs. It is programmed to drill 7,000 bores during the current year and the Government of India have been approached for liberal assistance to the State in taking up this task. This year 22 rigs are being purchased for taking up the bore-wells programme in addition to the 6 rigs expected from UNICEF.

Under protected water supply schemes, 276 works were taken up for execution, out of which 183 were completed and 93 are in progress. During this year, an amount of Rs. 85.18 lakhs has been provided for spill-over schemes. In addition to these works, it is proposed to take up a number of protected water supply schemes with financial assistance form the L.I.C.

Under urban development programme, the State Government have formulated schemes for the clearance and re-development of slum areas and to take up improvement of environmental conditions in the existing slums. Hyderabad city has been selected as being entitled to Central assistance for environmental improvement in the Slum areas. Government of India have approved an outlay of Rs. 33 lakhs during the current year for this purpose. In addition to this with a view to taking up more schemes in other congested urban areas in the State, the Government are exploring possibilities of serving financial assistance form the Central Urban Housing Corporation, etc

Rural Development and Employment programmes

Government fully share the growing feeling the "green revolution" has left virtually untouched the majority of the small farmers and the vast number of landless labourers. Rising incomes among the rich peasantry have tended to stimulate the urge for labour saving adaptations, thus making the position of the small farmers and agricultural labourers even more uncertain. The Government have therefore been fortified in their view that elimination of poverty in the countryside cannot be attained except through a direct and concerted assault on the problem of unemployment and under-employment. The Government is also convinced that the general programmes for expanding employment opportunities will have to be supplemented and co-ordinated with specific programmes to tackle the problem, of the educated unemployed. To-wards this end a beginning was made last year in initiating a new category of schemes with rural bias oriented towards employment. A series of special programmes such as the Drought Prone Areas Programme, Crash Scheme for Rural Employment, Small Farmers Developmental Agency, and Marginal Farmers and Agricultural Labourers Scheme were launched in 1971-72.

In the master plan, it is proposed to take up 497 minor irrigation works to benefit 39,950 acres and 1,878 small irrigation works to benefit 93,000acres. Apart from this to prevent soil erosion in the area we are implementing a massive programme of soil conversation which includes contour-bunding of 2.09 lakhs acres, stone terracing of 1.09 lakh acres, bench terracing of 3,400 acres and gully control works for 24,000 acres. Simultaneously to increase the green foliage and influence physio-climatical conditions in the area afforestation programmes including fresh plantation schemes covering 8,000 acres and planting of 59.75 lakh plants have been taken up. In order to improve the communications in the backward area we have also taken up 45 major road works covering 250 miles of pucca road apart from 633 village and other road works covering 2,400 miles. This year the Government of India have agreed to include the contiguous areas of Kanigiri Taluq of Prakasam District and Devarakonda Taluq of Nalgonda District in the Drought Prone Areas Programme with an additional allotment of Rs. 64 lakhs.

The Central sector scheme for small farmers and marginal farmers being implemented in the districts of Nalgonda, Cuddapah, Vizag and Srikakulam has made substantial headway in the very first year of its implementation. The agencies have been assisting small and marginal farmers undertaking intensive agricultural practices through schemes for provision of irrigation facilities, land reclamation and development, raising high yielding varieties and also in taking up subsidiary occupations like dairy farming, poultry, vegetable cultivation, etc. The operational strategy on which the programme is based lays emphasis on the proper identification of the area of operation and the beneficiaries along with simultaneous formulation of suitable programmes of development for the identified small and marginal farmers. The four agencies in our State have so far identified and drawn up individual programmes for about 73,000 small and marginal farmers. Till the end of March, 1972 the agencies have assisted in the flow of credit from the financial institutions to the small farmers to a tune of Rs. 62.48 lakhs. This is only the first step in the programmes for building up the viability of the small and marginal farmers spread all over the State. It is our earnest endeavor to secure progressively more credit for these categories of farmers in the years to come.

Under the Crash scheme for rural employment, with the modification of the basic content of the scheme by the Government of India dispensing with the concept of mandays and by allowing greater operational flexibility to the States in the selection of projects, the scheme was successfully implemented at a cost of Rs. 319 lakhs during 1971-72. The scheme is being continued during the current year also

Special Employment Programmes

With a view to put to proper use the available engineering and scientific talent, a scheme for conducting detailed survey in the rural areas has been launched. The rural engineering survey scheme provides for the employment of graduate-engineers and agricultural graduates to conduct a survey of various agricultural and engineering aspects as a preliminary to the preparation of specific schemes of development in the rural area. In view of the reallocation of investment priorities this year particularly affecting the irrigation sector, it is likely that a large number of engineering personnel will become surplus. It is therefore proposed to expand the rural engineering surveys by extending them to other districts. By this, not only is retrenchment avoided and employment provided, but the necessary base is created for scientific planning at local level. A provision of Rs. 1 crore is made in the Plan Budget for 1972-73, for this purpose.

During this year, keeping in mind the broad guidelines indicated by the Government of India, the State Government have formulated special employment schemes designed to expand the employment and income opportunities of the educated and uneducated. In formulating the schemes, we have viewed the problem of unemployment as one requiring not only the creation of more jobs, but also as one of providing and improving the skills in specific occupations and also of increasing the occupational mobility more particularly of persons belonging to weaker sections. The schemes will cover (a) rural engineering and planning surveys, (b) integrated rural developmental schemes which seek to provide facilities for land development, irrigation, etc. to the lands assigned to Harijans, Girijans and backward classes as part of the crash assignment programme, (c) economic support programmes for weaker sections, (d) special employment schemes providing opportunities for improvements in skills through pre and in job training, etc. The programme is proposed to be launched shortly at an estimated cost of over Rs. 4 crores

Welfare of Weaker Sections

The over-riding considerations underlying the various welfare measures initiated and executed by Government for the economic and social upliftment of the weaker sections have been the provision of employment opportunities have been the provision of employment opportunities on as large and wide a scale as is necessary and possible as well as ensuring minimum social consumption by these sections in the form of education, nutrition, housing drinking water, health, etc. in financial terms the importance attached by the Government to the welfare of these sections is reflected by the progressively larger outlays on the schemes intended for their social and economic well-being. As against an outlay of 6.2 crores in 1970-71, the proposed outlay for 1972-73 is Rs. 7.5 crores. In the field of Welfare of Scheduled Tribes, apart from a more effective enforcement of the special legislative measures designed to afford relief to the tribals from exploitation by non-tribals in terms of land transactions and credit, programmes were initiated last year which have resulted in a diversification and reorientation of the programmes for tribal development. New schemes undertaken include employment oriented courses of training of tribals for setting up trades and business, stipendiary grants to the educated tribal youths when unemployed, scouting programme for tribal children, etc.

Another significant landmark was the setting up of the composite tribal development project at Srikakulam the Girijan Development Agency with an outlay of Rs. 1.5 crores as a Central-sector scheme. The project aims at provision of substantial facilities to the tribals for the development of agriculture and related activities. During the last year, the Girijan Co-operative Corporation continued to expand and diversify its activities. The Corporation has widened the net-work of daily requirement depots with the extension of its activities to Telangana area. It is proposed to open more such depots during this year also. The Corporation made available to tribals a sum of Rs. 40 lakhs during 1971-72 as short-term loan for seasonal agricultural operations. The total turn-over of the Corporation which was less than a crore of rupees at the beginning of the Fourth Five-Year Plan showed an impressive rise to Rs. 1.5 crores for the Co-operative-year ended 30-6-1971. A more effective and purposeful role for the Corporation is envisaged this year as a useful instrument in bringing about a socio-economic transformation of the tribal landscape.

I had earlier referred to the organisation of co-operatives specially designed for the weaker sections and the policy of the Government to encourage free flow of institutional finance to these bodies. During 1971-72 a sum of Rs.16.5 lakhs was sanctioned by the Government and a sum of about Rs. 118 lakhs secured as loan from the Commercial Banks for purchase of vehicles to the various Taxi, Auto-Rickshaw Drivers and Cycle-rickshaw Pullers Co-operatives benefiting over 1,500 Taxi, Auto and Cycle-rickshaw Drivers. Similarly, co-operatives of occupational groups for washermen, barbers, printers, writers, etc., were organised and a sum of over Rs. 15.5 lakhs made available to the societies by way of Governmental assistance as well as by availing institutional credit facilities by nationalised Banks.

1971-72 also saw a massive expansion in the tribal crash nutrition programme. By the end of the year we have achieved a total coverage of 1,30,000 beneficiaries as against 41,000 at the beginning of the year. The Government of India have been approached to further extended the coverage this year.

The Hon’bl Members are well aware of the establishment of the Andhra Pradesh State Scheduled Castes and Tribes Co-operative Housing Federation Ltd., last year to finance societies affiliated to it to advance loans to their members for construction of houses. While the Federation was originally conceived for the benefit of the Scheduled Casts/Scheduled Tribes and De-notified Tribes only, the Government have subsequently extended the scope of the activities of the Federation and have reserved 15% of the funds for occupational groups such as weavers, toddy-tappers, fishermen, potters, etc. The Government are now considering a proposal to enhance this to 25% and to further extend the Federation’s scope to cover all backward classes. Though the actual construction of houses was taken up in late January 1972, out of 55,546 houses programmed for construction from out of the Rs. 10 crore loan assistance from the life Insurance Corporation so far 51,499 have been grounded. Steps are being taken to ground the balance of houses also and utilise fully the loan from the Life insurance Corporation. The tempo and coverage of the scheme is proposed to be kept up during next year also.

During this year, Government propose to launch a crash scheme for the provision of house-sites to the rural landless agricultural labour as a centrally-sponsored scheme. Government have formulated a scheme at an estimated cost of Rs. 64.64 crores covering 14.12 lakh landless agricultural labour families. The scheme involves acquisition and developmental of land for eventual assignment to the beneficiaries of developed plots. The project is proposed to be taken up in a phased manner and completed within a period of 3 years.

Despite the progressively larger budgetary allocations for the weaker sections, the Government consider that more vigorous thrust is necessary in the direction of a speedier and more meaningful implementation of the various economic support programmes for the benefit of the weaker sections. It is therefore proposed to supplement the normal budgetary allocations by exploiting institutional finance to the maximum from agencies such as the Reserve Bank of India, National Co-operative Development Corporation, khadi and village Industries Commission, etc. Towards this end, the Government propose to set up a Harijan Development and Finance Corporation. The Government are also considering a similar Corporation for the backward classes comprising occupational groups of barbers, washermen, toddy-tappers basket makers, weavers, potters, shepherds, etc.

During this year, consequent upon the Supreme Court of India upholding the validity of the backward classes G.O. issued by the State Government, it is proposed to give effect to the various educational and other concessions envisaged in the G.O. in favour of the listed socially and economically backward classes. It is also proposed to make reservations in terms of the G.O. in professional colleges and public services in favour of the listed backward classes. A programme for establishment of hostels to the listed backward classes is under the consideration of the Government

Annual Plan 1972-73

The "Vote on Account" Budget for 1972-73 envisaged a Plan-outlay of Rs.105 crores. An outlay of this order was considered essential to sustain the existing tempo of development. In view of the serious constraint on financial resources, it was, how4ver, proposed to review the size of the Plan some time in April or May on a re-assessment of our resources and refix the size of the Plan. On a careful assessment of our existing financial resources, it is now estimated that we shall be able to finance a Plan of only Rs. 77.95 crores. Since with an outlay of this order we shall not only be unable to fulfil the essential spill-over commitments but run the risk of seriously jeopardising the economy of the State, it has become an economic and social compulsion to raise the plan size to an acceptable level. The commitment of this Government for the welfare of the under-privilege leaves us with no choice except to mobilise larger resources by way of taxation to which I shall refer to presently. The plan size has therefore now been fixed at Rs. 96.34 crores keeping in view the relevant considerations of the need for growth and the availability of resources.

In view of the necessity to prune the size of the plan, the allocation under Irrigation and power sectors has been reduced by about Rs. 9 crores. For Nagarjunasagar Plan. project and Pochampad, Rs. 7 crores and Rs. 6 crores respectively have been provided in the normal Plan. In addition to this, a sum of Rs.4 crores has been provided for Pochampad Project, i.e., Rs.2 crores from the unspent Telangana surplus and Rs. 2 crores from Central non-Plan assistance. There is marginal increase in the outlay on agricultural programmes inclusive of a sum of Rs. 75 lakhs provided for the preparation of the record of rights. On social services, the Plan allocation has been increased from Rs. 1372.95 lakhs in 1971-72 to Rs. 1642.60 lakhs in 1972-73. The increase is mainly under Education, Medical, Urban Water Supply, Rural Water Supply and Welfare of Scheduled Castes and Backward Classes. It will thus be seen that while the over-all outlay on the Plan has been reduced, every effort has been made to see that the spill-over commitments are fully met and a certain reorientation of priorities has been brought about so that the employment base is widened and the objects of social consumption by the weaker section considerably enlarged.

For that regional allocation of the plan outlay, the same formula adopted for 1971-72 has been repeated this year also—90% of the plan outlay on the basis of population and the balance 10% in the ratio of 5:3:2 for Telangana, Rayalseema and Costal Andhra respectively. The regional break-up of the plan works out as follow



Costal Andhra








This excludes the funds provided for Special Telangana Development Schemes.

A sum of Rs. 942.52 lakhs out of the special assistance being given by the Government of India for investment on Special Development Schemes in Telangana region has been provided in the ‘Vote on Account’ Budget, 1972-73. Detailed proposals giving financial outlays on the various development programmes are under the consideration of the Andhra Pradesh Regional Committee. Pending approval of the programmes by the Andhra Pradesh Regional Committee, advance action has also been initiated on the spill-over works so that the working season is not lost. During the current year, major outlays proposed are on Rural Electrification (Rs. 300 lakhs), Irrigation including Pochampad project (Rs. 305 lakhs), Protected Water Supply Schemes (Rs. 97,50 lakhs), Communications (Rs. 85 lakhs) and Social Welfare Schemes (Rs. 45 lakhs).

During the year 1971-72 the Telangana Development Committee met twice and the plan ImplementationCommittee also reviewed the progress of implementation of the Normal plan schemes relating to Telangana and Special Telangana Development Schemes. During this year, the Prime Minister’s Review Committee reviewed the progress of implementation of the eight-point programme.

Budget Estimates 1972-73

Before, I proceed to present briefly the financial transactions for the year, I may inform the House of the principles followed in the allocation of figures between Telangana and Rest of the State in the Budget Publications. Hon’bl members might recall that in the course of my Speech on the ‘Vote on Account’ Budget for 1972-73 I have stated that some of the recommendations of the Andhra Pradesh Regional Committee regarding allocation of receipts and expenditure are under the consideration of the Government. Further to this, preliminary discussions were held with the Chairman of the Andhra Pradesh Regional Committee, with a view to arriving at an agreed formula in respect of items where the recommendations of the Andhra Pradesh Regional Committee are at variance with the Bhargava Committee principles. Pending the outcome of the discussions, the allocations now made follow the principles adopted in the ‘Vote on Account’ Budget.

As the financial results in respect of 1970-71 and 1971-72 have already been indicated in the interim budget, I do not propose to cover this. I shall only confine myself to a brief summary of the financial transactions for the current year. The revenue receipts have now been placed at Rs. 354.66 crores as against the figure of Rs. 344.70 crores anticipated at the time of the presentation of the "Vote on Account" Budget. The variation is explained by increased receipts under taxes on income, grants-in-aid from the Central Government and larger collections under land revenue mainly under drainage cess in view of past performance. The anticipated revenue expenditure in the "Vote on Account" Budget was Rs. 331.76 crores. This is now placed at Rs. 344.85 crores. The increase is mainly due to the following items:




Scheme for modernisation of police force



Crash Schemes for rural employment



TelanganaEstablishment of market Complex in the Pochampad Ayacut area



Famine Relief


The revenue account now shows a surplus of Rs. 9.81 crores. Capital outlay is now estimated at Rs. 50.75 crores including expenditure on State Plan Schemes. The provision includes a sum of Rs. 1 crore for payment of compensation to the landholders whose surplus lands are taken over under the Ceilings Act. The net effect of the financial transactions under debt and deposit heads including loans and advances would now be (+) Rs. 80.56 crores which takes into account the ad-hoc loan assistance of Rs. 70.86 crores from the Government of India towards repayment of overdraft to the Reserve Bank of India. The year is expected to close with a negative cash balance of Rs. 40.15 crores. As the Hon’ble members are aware, the Government of India and Reserve Bank of India have stopped the overdraft facility to us with effect from 1st April 1972. The deficit of Rs. 40.15 crores is due to the fact that our own resources plus Central assistance will not be able to sustain a plan of Rs. 96.34 crores that we are trying to implement. Discussions will be held with Government of India for getting higher Central assistance. Even with this, the State Government will have to raise substantial additional resources to bridge the gap. It is expected to cover the gap in the budget with these two measures.


In conclusion, I may say that though I have catalogued a number of programmes designed to change the direction and content o the living conditions of millions of us living below the line o poverty, I am sure that Hon’bl Members have not failed to see that all these programmes are knit together by one common thread running through; them, i.e., the unflinching will of the Government to translate the Constitutional guarantee that " the State shall strive to promote the welfare of the people by securing and protecting as effectively as it may a social order in which justice, social, economic and political, shall inform all the institutions of the national life" into a practical reality. I very well realise that this is a long way to go. This task has been easier only by the unswerving determination of the Government to reach the goal as well as the recognition that we have the popular support which only can sustain us on this pilgrimage. I welcome you to join us in this journey for the welfare of the poor and down-trodden.
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