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Budget Speech

Speech of
Sri P. Ranga Reddi,
Minister for Finance

presenting the Budget for 1975-76
to the Andhra Pradesh Legislature
on the 15th February 1975.



I rise to present the Budget of Andhra Pradesh for the year 1975-76.

Unlike in the last few years when it had become necessary, for a variety of reasons, to obtain the assent of the House wide a year, this time I propose seeking your approval for the full Budget. A matter of special significance this year is that the major budget documents are being presented in diglot form in Telugu and English. Before I come to the Budget proposals I would like to give a brief account of the economic situation and trends in the State followed by a review of the Plan programmes of the current year and an outline of the more important developmental schemes for the next year.

1973-74 has been a significant year for Andhra Pradesh for more than one reason. Not only did we witness the triumph of the unity of the Telugu-speaking people, but this was also the year when the long spell of economic stagnation was broken paving the way for steady progress. As against the provisional forecast of rise in State Income of 5.9% in 1973-74 over 1972-73, the State Income actually increased from Rs.1, 271 crores in 1972-73 to Rs.1, 450 crores in 1973-74 thus registering an increase of about 14%. This was possible primarily due to the achievement of a record level of foodgrains production of over 86 lakh tonnes in 1973-74. The boom in agricultural production set the place for industrial revival. The gradual production set the pace for industrial revival. The gradual easing of the power position has created a favourable climate for larger industrial investments. In the current year, though the kharif prospects were somewhat affected by the uneven distribution of rainfall, with the launching of the Special Rabi Production Programme we are hopeful of achieving a satisfactory level of agricultural production,. Industrial production is continuing to pick up. We therefore expect that in the year 1974-75 also the State Income will continue to register growth.

The revival of the State economy has had a beneficial effect on the financial resources of the State, a measure of which can be had from the fact that we have been able to substantially raise the State Plan outlay from about lRs.89 crores in 1973-74 to Rs.142 crores in the current year. This has been mainly as a result of greater buoyancy in State revenues and the additional tax effort made by the State. However, a somewhat disturbing aspect on the State economy of the general inflationary pressures in the national economy as a whole and the consequent rising trend of prices. While the pressure on prices is symptomatic of a more deep/seated malady which is the continued inadequacy of domestic production relative to aggregate demand and there fore is a problem to be tackled on a long-term and national basis, we realise that this also calls for certain immediate and short-term measures. We have therefore initiated a series of vigorous measures on the distribution from through which the debilitating effects of rising prices are sought to be moderated.

The behaviour of the prices of essential commodities in the past has demonstrated time and again that the price in the past has demonstrated time and again that the price structure in the open market could be subjected to gross and disproportionate distortions even by marginal shortages in supplies. To arrest such a trend, it is imperative that the public distribution system is enlarged to channelise an increasing volume of essential commodities and more particularly foodgrains. In order to meet this growing commitment, the Government have set up the Andhra Pradesh State Civil Supplies Corporation, which would be entering the market very soon for the procurement of foodgrains. The Food Corporation of India and the newly set up State Corporation operating hand in hand are expected to build up a sizeable buffer to run the public distribution system effectively. Through a new-work of Fair Price shops covering all the districts 30,000 tonnes of rice a month are being released. At the same time the enforcement arm is being strengthened to prevent smuggling of foodgrains across the State’s borders and vigorous steps are being taken including resort to the Maintenance of Internal Security Act to curb the anti-social activities of blackmarketeers and hoarders. It is of some satisfaction to us that the increase in the average of the consumer price indices in the State for the period April-November f1974 compared to the corresponding period of 1973 was 21.9 per cent which was of a lower order than the corresponding percentage for All India which was 28.7.

I shall now proceed to the Annual Plan proposals.

Annual Plan 1975-76

In the vote-on-account Budget the outlay provided for the Annual Plan for 1974-75 was RS.128.39 crores. This consisted of Central assistance of Rs.48.75 crores and State’s resources of RS.79.64 crores. The Plan outlay was increased to Rs.132.73 crores in the final budget, due to unspent balances revalidated under special development schemes of Coastal Andhra , Rayalaseema and Telangana and also additional funds provided for certain schemes.

In the present Budget proposals the revised Plan outlay has been indicated as Rs.142.33 crores. This further increase of nearly Rs.10 crores is the result of additional allocations made to certain important schemes.

As Honourable Members are aware we had requested the Government of India for additional assistance for the increased outlay on Nagarjunasagar Project. However, pending such assistance the allocation for the Nagarjunasagar Project in the Plan has been increased further by Rs.4.50 crores over the original allocation of Rs.5 crores.

An amount of about Rs. 2 crores has been additionally allocated for Housing and Water Supply Schemes taking credit for L.I.C. loans. The allocation for the Power sector has been increased by Rs.1.75 crores due to additional allocation for Vijayawada Thermal Station and the Upper Sileru Hydro Electric Scheme. An amount of Rs.120.38 lakhs has been provided for clearing arrears of Rebate under Handlooms and a sum of Rs.30 lakhs for payment of compensation for lands acquired for the Industrial Development Areas. Rs.50 lakhs have been additionally allocated for the Irrigation sector and Rs.32.56 lakhs for continuing certain additional educational facilities created in the twin cities of Hyderabad and Secunderabad during 1973-74. With these increases and with savings in certain other sectors the total outlay on the Revised Plan for the current year comes to Rs.142.33 crores. Subsequently a further allocation of Rs.4.60 crores for Power and Rs.50 lakhs for the Vamsadhara Project have been approved by Government.

In the discussions with the Planning Commission, the resources for the Annual Plan 1975-76 were originally estimated at Rs.131.36 crores. This includes Central assistance of Rs.48.75 crores, which is the same as in the current year. However, taking into account the immediate requirements for Irrigation and Power Sectors and the essential commitments in other sectors, an outlay of Rs.153.68 crores has been included in the Budget. In realise that even this outlay cannot be considered entirely adequate taking into account our commitments particularly in the Irrigation and Power Sectors. In the Power Sector the question of providing an adequate outlay for the Kothagudem State-IV scheme has to be considered during the course of the year 1975-76. Similarly in the Irrigation Sector the question of stepping up the outlay on Nagarjunasagar Project would have to be considered. I have elaborated on the economic justification for such additional assistance later in my speech. I would only like to repeat here that there is a strong case for additional Central Assistance for both there items which are in the core sector and have an immediate and vital impact on industrial and agricultural production and I hope that such assistance would forthcoming.

In the allocations made in the Annual Plan 1975-76 the major share has once again naturally been provided for Irrigation and Power. The allocation for Power is Rs.54 crores and for Irrigation it is Rs.38 crores the two together accounting for 60 per cent of the total plan outlay. The outlay on Transport and Communications sector has gone up steeply from Rs.9.89 crores in the current year to Rs. 17.86 crores in 1975.76, the entire increase being due to the larger plan outlay for R.T.C. The allocation for Social and Community Services is Rs.24.97 crores for Agriculture and allied services including Co-operation Rs. 14.21 crores and for Industry and Minerals Rs.4.53 crores.

As Honourable Members are aware the Government of India have indicated an additional assistance of Rs.90 crores for the Fifth Plan period for the accelerated development of backward areas in the State to be allocated between the three regions of Telangana, Rayalaseema and Coastal Andhra in the ratio of 5:3:2. For the current year an amount of Rs.18 crores would be available and besides this an amount of Rs.1 crore would also be available for the development of the twin cities.

As Honourable Members are also aware, the identification of backward areas and the formulation of schemes had been done on the basis of certain guidelines given by the Planning Commission and on the recommendations of the three Regional Planning and development Committees. 25 per cent of the total amount has been earmarked for regional schemes in the sectors of Large Scale Industries and Higher Education and the re4st has been divided among the districts on the basis of backward areas in each district. The special development funds have been allocated to productive sectors. Thus out of a total amount of Rs. 18 crores nearly Rs.4.50 cores has been allocated for Industries, over Rs.3 crores for Rural Electrification and nearly 5 crores for Minor Irrigation. Rs.2.10 crores have been allocated for Agriculture and allied sectors, Rs.2.04 crores for Rural Water Supply and Rs.50 lakhs for schemes of Higher Education. Since this is the first year in which the schemes are being sanctioned, the schemes could be formulated lonely in the later half of the year, but, for 1975-76 action has already been initiated and it is proposed to formulate these schemes early so that the approval of the Planning Commission could also be obtained immediately thereafter. In the respect of the schemes that have been commenced in the current year it is proposed to continue them in the next financial year without any interruption and suitable action to ensure this will be taken. In the Budget for 1975-76 provisions have been made in different sectors on the basis of the current year’s allocations. These are however tentative and will be suitably modified depending on the final approval of the schemes based on the recommendations of the Planning and Development Committees and the State Planning Board.

I am well aware that purposeful Planning dies not mean as well conceived Plan alone but also requires effective Plan implementation. Continuous appraisal of the progress of Plan expenditure is of vital importance for ensuring successful implementation. This task has been made difficult by the lack of an information system which could concurrently report on the progress and shortfalls in implementation. The enable the Government careful monitoring of Plan Programmes and also to facilitate scientific budget formulation. Government have decided to establish a Computer-based Information System, work on which is in progress, making use of the modern computer facilities available at the Administrative Staff College of India, Hyderabad.

I shall now give a brief account of the various developmental programmes


I had earlier referred to the uneven distribution of rainfall during the south-west monsoon. However, in fairness to the weather Gods, I should admit that the extended south-west monsoon has had a benign influence on agricultural production during the Rabi season. To cash in on the surplus rainfall in October, 1974, the State Government launched the Special Rabi Production Programme in an area of About 5.5 lakh acres in the Nagarjunasagar Project and Krishna Delta areas. Since the successful implementation of the Crash Rabi Programme depends on required quantities of agricultural inputs being made available to the farmers in the selected areas, a sum of Rs.8 crores is being provided for this purpose. We have also secured an additional allotment of 24,000 Metric Tonnes of Nitrogen over and above the normal allocation of fertilisers for the Crash Rabi Programme from the Government of India. Being well aware of the higher costs of agricultural credit to needy farmers, the Reserve Bank of India was approached to provide supplementary credit limits to the extent of Rs.6 crores and the Bank has agreed to our proposal.

The pivotal position of agriculture and the urgency of achieving rapid growth in agricultural production have been brought home more than ever before by the experience in the last few year. A reversal of the rising trend of prices of wage goods is possible only through a sustained and systematic programme of development of agriculture. The major strategies of agricultural development has been (I) full exploitation of the possibilities of raising per-acre yields through High-yielding varieties, multiple cropping and provision of a package of practices in respect of food crops; and (ii) intensive efforts in select suitable areas for raising the yield levels of major commercial crops. During the coming year, it programmed to cover an area of 25.86 lakh hectares under High-yielding varieties of seeds. While the available supplies of seeds are being augmented by the multiplication of production seeds in the State Farms, the Government also propose to set up a State Seeds Corporation for the multiplication and supply of quality seeds.

In the field of commercial crops, a major break through has been in the development of cotton. An additional production of 1,15,500 bales of cotton is likely to be achieved. This has been made possible as a result of the spread of irrigated cotton cultivation under the Nagarjunasagar and Tungabhadra Projects and the K.C. Canal area in Kurnool district. In 1975-76 as part of the I.C.D.P. it is proposed to cover about 1.5 lakh acres under rained conditions in the districts of Adilabad and Kurnool. It is also proposed to raise 3.25 lakh acres of M.C.U.-5 Cotton in Nagarjunasagar area and 50,000 acres in Krishna rice fallows with Krishna Cotton.

Though the over-riding consideration in the agricultural sector is increasing productivity, we have to ensure while devising a strategy to achieve this objective, that the income disparities in the rural economy are not aggravated by paying special attention to the problems of the weaker sections and those thinly employed such as Small and Marginal Farmers etc. Apart from the organisation of Small Farmers and Marginal /Farmers Agencies to which I shall refer to later, it is proposed to organise Farmers Service Societies to provide integrated services which would benefit these sections substantially. These societies will be making available to members short-term and long-term credit besides providing necessary inputs for augmenting agricultural production. By creating facilities for the development of subsidiary occupations for its members and augmenting their incomes, the societies will also contribute to their economic betterment. Five societies will be organised on a pilot basis in the Small Farmers’ Development Agency/Marginal Farmers and Agricultural Labourers Agency areas of Srikakulam, Visakapatnam, Cuddapah and Nalgonda districts. In the coming year, it is proposed to organise similar Societies in the new Small Farmers Development Agency/Marginal Farmers and Agricultural Labourers Development Agency districts for which a provision of Rs.13.20 lakhs has been made.

Speaking on Agriculture, it is necessary that I briefly refer to fertiliser availability and distribution in the State. For Khariff 1974-75, Government of India had allotted about 1.33 lakh tonnes of Nitrogen in addition to Phosphatic and Pottassic fertilisers. For the current Rabi season, the expected allotment is about 1.56 lakh tonnes of Nitrogen excluding other straight and complex fertilisers. Government of India have also made an allocation of 2 lakh tones of Nitrogen for the ensuing Kharif 1975. Hon’ble Members will appreciate that this improves the position regarding availability of fertilisers and compares well with the allocation for the previous Kharif season.


In the current year, the Co-operatives have recorded significant progress in the provision of short-term credit to farmers for agricultural production. As against a target of Rs.32 crores set for spirit-term agricultural credit in 1974-75, the credit disbursement in Kharif 1974 itself was of the order of Rs.32.30 crores. A further credit of Rs. 10 crores is proposed to be disbursed during the Rabi season. Thus the total short-term credit provided to agriculturists during the current year is expected to exceed Rs.42 crores. This is as against the average annual achievement of about Rs.25 crores during the Fourth Plan period. In the coming year, the present level is expected to be maintained.

In the field of long-term credit, the Andhra Pradesh Central Co-operative Land Mortgage Bank has taken steps to diversify its long-term lending. The loaning policies have been re-oriented to cover production purposes other that traditional land development such as Dairying, Sheep-breeding, Poultry-rearing, promotion of Agro-based Industries etc. During the current year long-term loans are expected to be disbursed to an extent of Rs.15 crores, while in the coming year, this is expected to be Rs.20 crores.

Government have been implementing special employment-oriented programmes with a view to assisting the weaker sections. During the current year, the provision of Rs.10.95 lakhs made to assist co-operatives for weaker sections such as, Co-operative Farming Societies, Labour Contract Societies, Rickshaw Pullers’ Societies, Washermen and Barbers Societies etc., will be utilised in full. The physical content of these programmes is proposed to be enlarged in the coming year and for this purpose the provision is being stepped up to Rs.55 lakhs in the Budget Estimate 1975-76.

Animal Husbandry and Dairying

This sector has come to occupy an increasingly important role in view of its potential to raise the nutritional standards of the people and augment the incomes of the small and marginal farmers and agricultural labour. The programme of Dairy Development is linked up with the development of the quality of the cattle population through the4 Intensive Cattle Development Blocks. While three Intensive Cattle Development Blocks are already in operation in the State, new Intensive Cattle Development Blocks are proposed in the K.C. Canal area, Khammam, Srikakulam and Visakhapatnam districts. The integrated strategy evolved for cattle development through scientific breeding, disease control and fooder development has started paying dividends through increased milk production in the State. The milk procurement has gone up from 526 lakh litres during the previous year to 720 lakh litres in the current year. It is proposed to start 10 new Chilling Centres. Two dairies, one at Khammam and another at Mahaboobnagar are also proposed to be established. With the commissioning of the Milk Powder Factory at Central Dairy, Hyderabad, the Andhra Pradesh Dairy Development Corporation would also be in a better position to tackle the problem faced by it at present in disposing of surplus milk during the flush season.


In the sector, the guiding principle has been the consolidation of Plan Schemes initiated in the past and accelerating progress on all continuing schemes. The outlay on the Irrigation Sector in the coming year is proposed at Rs.l38 crores.

Nagarjunasagar Project

In respect of Nagarjunasagar Project, a significant event of mention has been the storing of water in the current year upto the full reservoir level of (+) 590 ft., upto the top of Crest Gate enabling supply of water to large areas in the Krishna Delta for second crop.

During the current year, water was released for an additional ayacut of 7,892 acres bringing the cumulative irrigation potential to 7.46 lakh acres under the right canal. The coming year’s programme envisages creation of an additional irrigation potential of 20.211 acres.

On the left canal the potential created in the current year is 26.867 acres bringing the total potential created so far to 3.08 lakh acres. Under Lift Irrigation schemes, an irrigation potential of 17,000 acres has been created. It is proposed to create an additional irrigation potential of 8,000 acres under Flow Irrigation and 10,000 acres under Lift Irrigation in 1975-76.

A provision of Rs.10 crores has been made in the Budget 1975-76. We are well aware of the pre3ssing need to complete the Nagarjunasagar project at the ear5liest. In pursuance of the discussions that the Chief Minister had recently with Deputy Chairman of the Planning Commission the State Government have formulated concrete proposals and sent them to the Planning Commission and to the Government of India seeking additional financial assistance for the accelerated completion of the Nagarjunasagar Project by 1979-80. We have impressed upon the Government of India and the Planning Commission that an additional Central Assistance of Rs.100 crores over and above the normal plan allocations for this project would mean, that an additional irrigation potential of 1 million acres could be created by 1979-80 which would result in additional rice production and thus save the Nation several hundred crores of rupees by way of foreign exchange for importing foodgrains. It is therefore in the national interest that work on this project is completed and we earnestly hope that this proposal of ours would meet with the early concurrency of the Government of India.

Pochampad Project

Work on the Pochampad Project which has been accelerated under arrangements with I.D.A. is progressing briskly. The main canal excavation has been completed upto Mile51 (K.M. 82) and an irrigation potential of 1.16 lakh acres has been created by letting waters into the Godavari South Main Canal. Further works on the excavation of main canal and distributaries are in progress. It is programmed to create an irrigation potential of 1.52 lakh acres by July, 1975 and 2.10 lakh acres cumulative by July, 1976. Work is also proposed on the Lower Manair Dam. A provision of Rs. 14.50 crores has been made in the Budget for 1975-76.

Godavari Barrage Project

Government are aware of the urgency of taking up the work on the Godavari Barrage and it is for this reason that it has been proposed to take up this projects as a World Bank assisted one as a result of which it is hoped that the entire work would be completed within four years. A provision of Rs.3 crores has been made in the Budget for 1975-76 for this project, but the question of increasing this would have to be considered when the programme to be assisted by the World Bank is finalised.

At this point, I may also inform the Members that necessary staff has been sanctioned of preliminary investigation of the Jurala Irrigation Project and for exploring the use of Srisailam Waters for irrigation.

Minor Irrigation

We are all well aware of the important role of minor irrigation in the removal of regional imbalances in view of the works being spread over a large area particularly areas not likely to benefit from major projects, added to this, it constitutes an important plank in any programme designed for the mitigation of the rigours of drought. In view of the large number of spill-over minor irrigation schemes and the dispersal of the limited plan allocations over these, it has not been possible to complete the works under execution and create the targeted potential quickly. During the Firth Plan period, however, it has been proposed to complete all the spill-over works in a phased manner by evolving a time-bound programme. Financially, the task has been made easier since the normal plan allocations have been supplemented by the Central assistance under the Drought Prone Areas Programme and the Six Point Formula. A close review of the financial and administrative procedures for sanction of estimates has been made and all possible steps have been taken to see that the intended benefits flow during the plan period itself. In the coming year, in addition to the normal Plan allocation of Rs.2.10 crores an amount of nearly Rs.5 crores may be available form out of the Special Development Funds for accelerated development of backward areas.

With regard to the physical benefits during 1974-75 fresh irrigation potential of about 15,000 acres was created by June, 1974 beside3s stabilising supplies to an extent of 18,000 acres. By June, 1975 an irrigation potential of about 86,000 acres is expected to be created besides stabilising supplies to an extent of about 55,000 acres.

Command Area Development

Government are aware that the speedy utilisation of the irrigation potential created is no less important than the creation of the potential. The narrowing down of the gap between the potential created and its utilisation is possible only if the problems of land development are tackled in a concentrated and co-ordinated manner. It is felt that concurrently with the engineering works, measures should be taken to facilitate development of agriculture in the command areas, such as land shaping and land leveling, construction of field channels, introduction of suitable cropping pattern, intensification of extension services, strengthening of facilities for marketing, storage, transport etc. To achieve all these objects, a separate Department has been created at the Government level with effect from August, 1974 which is responsible for the development if ayacut in the State and to undertake intensive land development in the commands of the following four projects :

i. Nagarjunasagar (Right and Left Canals)

ii. Pochampad.

iii. Tungabhadra Low Level Canal.

iv. K.C. Canal

It is proposed to create a Command Area Development Authority for each of the four major projects headed by a Minister and having an Administrator as its Chief Executive. This will provide a single line of command for all agencies functioning in the project area. Such an authority for Pochampad Project has already been set up with the Minister for Agriculture as Chairman. Similar Authorities will also be constituted for other Commands shortly. In the coming year, a provision of Rs.175 lakhs has been made for Command Area Development. It is proposed to enlarge the content of the scheme so as to attract Central participation on certain schemes presently under formulation by the Government.


The importance of Power in the economic development of the State either in the long-run as an essential infrastructure or in the short-run by relieving the pressure on prices through minimising power shortage, needs no special emphasis. While continued priority is being given for installing additional generating capacity in the State, it is also being ensured that power failures are avoided by providing for the requisite thermal capacity which can reduce the effects of drought on power generation. With the commissioning this year of the two Units of 110 M.W. each of the III stage of Kothagudem Thermal Power Plant, the installed capacity has gone upto 888 M.W. Sustained and consistent priority is being accorded to the power sector by the Government and financial outlays on power generation and transmission and distribution have been steadily on the increase. As against the Third Plan outlay of Rs.93.6 crores the Fourth Plan investment was about Rs.186.4 crores which is nearly a two-fold increase. For 1975-76 the outlay proposed is Rs.54 crores. We are well aware that keeping in view the continuing spill-over Power Projects and the need to commission them by the end of the Fifth Plan period, this outlay requires to be augmented. In the current year, over the budgeted loan assistance to the State Electricity Board, a further allocation of Rs.9.33 crores has been made for taking up both generation and rural electrification schemes. The programmes for the coming year include commissioning of one Unit of 110 M.W. at Lower Sileru by August, 1975. Works on new schemes, such as Kothagudem Stage-IV (2X110 M.W.), Vijayawada Thermal (2X200 M.W. ) and the Nagarjunasagar Hydr0-electric scheme are also in progress.

In view of the extensive coal deposits available in the Godavari basin, proposals have been formulated for setting up two super-thermal Plants each with a capacity of 1050 M.W. near Ramagundam and Bhadrachalam and sent to the Government of India for being taken up in the Central Sector.

Srisailam Project

Regarding Srisailam Project the most difficult phase of construction of the Dam in the deep river portion under water is over. The excavation and construction of the Power Tunnel is in progress and about 82% of excavation work has been done and the work is scheduled to be completed by June, 1975. The excavation of PowerHouse, Transformer Yard and Auxiliary Rooms is in progress and will continued next year. A provision of Rs.12 crores has been made in the Budget for 1975-76.

Near Year’s Rural Electrification Programme envisages the electrification of 350 villages. In the current year, as against a target of 8,000 pumpsets about 7,800 have already been energised. Advantage is also taken of the assistance from the Rural Electrification Corporation, especially, their two new categories of loans, viz., a 30-Year loan exclusively for Rural Electrification Projects in the Minimum Needs Programme Areas and advance loans for potential projects which would cover areas which have a proximate potential of agricultural development. So far 67 schemes coming under various categories of loans have been sanctioned by the Rural Electrification Corporation and 12 more schemes have been proposed by the Andhra Pradesh State Electricity Board.


Government is fully conscious of the fact that an appreciable dent on rural poverty is possible only through a diversification of the State economy by reducing its dependence on agriculture through widening the industrial base. Our policy in this regard has therefore been primarily of creating the necessary infrastructure and undertaking promotional activities through provision of investment inducing incentives. In the field of promotional programmes the accent has been on selecting industries based on local natural resources. Government, in consultation with the Small Industries Service Institute and the various promotional and financial institutions have drawn up district-wise lists of Industries that could be set up by entrepreneurs. With this as the base, intensive campaigns are being conducted in districts covering a number of growth centres. The participation of various promotional corporations both State and Central, Financial Institution, Research Organisation and Banks has been enlisted with the object of rendering integrated services to the entrepreneurs. So far 8 such intensive campaigns have been conducted. As a result of these campaigns 18 Medium Scale Industries and over 900 Small Scale units have been sponsored and cleared. To monitor the progress of implementation of the newly sponsored units a promotional wing with specialists have also been set up in the Directorate of Industries. Government have also set up a State level Project Clearance Cell to expedite the clearances necessary for setting up Large and Medium Industries.

Andhra Pradesh Industrial Infrastructure Corporation

With a view to creating the industrial infrastructure so very necessary for the establishment and development of large, medium and small scale industries the Government set up the Andhra Pradesh Industrial Infrastructure Corporation. The Corporation has embarked upon the establishment of Industrial Development Areas and identifying growth centres where there are possibilities of establishing Large and Medium Industries besides setting up Industrial Estates in various places where entrepreneurs, technocrats and educated un-employed come forward to establish Small Industries. To the end of December, 1974 as many as 239 sheds and 39 plots have been allotted to 671 entrepreneurs in various Industrial Estates in the State. The investment made by the entrepreneurs for setting up industries is estimated at Rs.3 crores. Similarly 527 acres of land have been allotted to 147 industries. The investment by these industries will be over Rs.50 crores when the projects are implemented. In the coming year, the Corporation has formulated plans to implement programmes at an estimated cost of Rs.400 lakhs. In order to enable the Corporation to obtain loan assistance form financial institutions, a Plan provision of Rs.45 lakhs has been made byway of share capital contribution to the Corporation which is in addition to the allocation under the Industrial Trust Fund.

Andhra Pradesh Industrial Development Corporation

A major industrial promotional undertaking in the State is the Andhra Pradesh Industrial Development Corporation. The Corporation has increased the tempo of its activities and has recently finalised a programme for implementation of 85 units, which will result in a total investment of Rs.327 crores during the Fifth Five-Year Plan Period. In all 49 projects are under various stages of implementation currently. For 28 out of the 49 projects, the Corporation has itself obtained letters of intent from the Government of India. Some of the major projects for which letters of intent have been obtained during the current year are (a) P.V.C. Project Costing Rs.25 crores, (b) Calcium Carbide costing Rs.7 crores, (c) Power Transformers costing Rs.1.5 crores, (d) G.L.S. Lamps costing Rs.2 crores and (e) Gray Iron Foundry consisting Rs.1.5 crores.

To date 14 joint venture projects have been finalised by the Corporation involving an overall investment of the order of Rs.65 crores. The Corporation’s share in the aggregate investment of these joint ventures will ultimately be around 26%. The more important among the joint projects recently finalised are:

a. Rs. 36 crores Pulp and Paper Mill at Kurnool;

b. A 12,000 tonnes per annum Cold Rolled Strips and Box Strapping Project with an estimated capital cost of Rs. 3.5 crores;

c. A 1.6 million nos. per annum Connectors Project costing Rs.1.80 crores and

d. A 20,000 million nos., per annum Semi-Conductor Devices Project estimated to cost Rs. 5 crores etc.

In the Annual Plan 1975-76, a provision of Rs. 100 lakhs has been made towards Government share capital contribution to the Corporation. Besides this further contributions will be available from the Special Development Funds for Backward Areas and from the Industrial Trust Fund.

Andhra Pradesh Small Scale Industries Development Corporation

In the Small Scale Sector the Andhra Pradesh Small Scale Industries Development Corporation is the chief promotional agency for provision of equity capital to Small Scale Industries both on a minority basis and a joint venture basis. The Corporation has so far sanctioned 53 schemes with a total commitment of Rs.1.12 crores towards its investment. Out of the above, 39 schemes has already been implemented and the Corporation has also released an amount of Rs.68.17 lakhs towards its share of which 27 units have already gone into production. In the next year the plan allocation towards State equity participation in the Corporation is Rs.22.50 lakhs.

Andhra Pradesh State Financial Corporation

The main term lending financial institution in the Public Escort is the Andhra Pradesh State Financial Corporation. During the current year the Corporation sanctioned financial assistance to as many as 249 units for a total amount of Rs.760 lakhs. The disbursements touched a record figure of Rs.417 lakhs during this period. It has assisted as many as 196 units coming up in the backward areas and the total assistance sanctioned to them was Rs.349 lakhs. Out of the units for which financial assistance has been sanctioned during the current year so far, 328 are in the Small Scale Sector. IN the coming year sanctions to industrial units are likely to cross the Rs. 12 crore mark. The Corporation has been mainly depending upon re-financing agencies like the I.D.B.I. for its financial resources. Since the Corporation has almost reached the statutory limit within which it can avail itself of such re-financing facilities, the State Government extended further capital contribution to the Corporation in 1974-758. For the same purpose a provision of Rs.15 lakhs is made next year.

Andhra Pradesh Leather Industries Development Corporation

Honourable Members are aware of the setting up of the Leather Industries Development Corporation last year with a view to improving the economic conditions of leather workers and modernising the leather industry in the State. In pursuance of this objective the Corporation has already taken up the revitalisation of Hyderabad Tanneries at a cost of Rs.26 lakhs and Guntakal Tannery at a cost of Rs. 20 lakhs. IN addition to these two, a modern Tannery is coming up at Vijayanagaram as a joint venture with the Andhra Pradesh Industrial Development Corporation at a cost of Rs. 1 crore. The Corporation has undertaken the establishment of raw material depots in the twin cities and in the districts in a phased manner. Apart from setting up these depots the Corporation has also been encouraging the traditional leather manufacturers to sell their products to the Corporation by giving them fair wages. The Corporation at Hyderabad, Vijayawada and Vizag has also started the Production of footwear. IN the coming year, a provision of Rs.23 lakhs has been made for the Leather Corporation towards Government equity participation and Rs. 30 lakhs under the Six Point Formula.

In addition to the above provisions, it is proposed to allocate a sum of Rs.4.50 crores in the current year with a view to accelerate industrialisation of backward areas of the State under the Six Point Formula. A similar amount is tentatively proposed for the next year.

As in the current year provision has also been made for a sum of Rs, 85 lakhs in the next year to be utilised for the promotion of industries in the Telangana area out of the Industrial Trust Fund.

Honourable Members are aware of the provision made in Budget Estimate 1974-75 for the Employment Promotion Programmes. The Planning Commission has so far cleared 44 schemes costing Rs.176.06 lakhs out of which 34 schemes costing Rs.127.09 lakhs are in the industries sector. The employment potential of the above schemes is estimated at over 14,000.

Under the Central Sector projects, I may mention about the progress so far made in the establishment of the Steel Plant at Visakhapatnam. The Government of India has reiterated their determination to go ahead with the Vizag Steel Project. Out of a total extent of the about 6,000

Acres required for the project, an extent of about 3,477 acres has already been handed over to the Project Authorities. It is proposed to complete the balance work on the acquisition of land next year. The Government has also sanctioned two divisions for attending to the investigation work for diversion of Godavari waters to Visakhapatnam.


Government have taken steps to clear accumulation of yarn with the Co-operative Spinning Mills and cloth with the Primary and Apex Weavers Co-operative Societies by sanctioning special funds to clear arrears of rebate on sale of handloom cloth and to enable the weavers to purchase yarn. Special steps are also being taken to see that garments factories are established in various parts of the State, especially, in the backward areas and to regulate the production and marketing of garments through a Federation of Garments Factories which would function from Hyderabad.

Film Industry

The proportion of Entertainment Tax receipts earmarked for the development of film industry has been raised from 2 to 7 per cent and as a result it is expected that about Rs.78 lakhs will accrue during 1975-796 for this purpose. It is proposed to utilise this amount for developing the film industry in the State and form improving exhibition facilities in semi-urban areas.


The outlay fixed for general education in 1975-76 is Rs.387 lakhs beside Rs. 50 lakhs provided for higher education under the six Point Formula.

In the field of elementary education, it is proposed to enroll one-lakh additional children in the age group 6-1 in classes 1-5 in the coming year. The provision made includes a sum of Rs.3 lakhs specially set apart for starting Ashram Schools in the tribal areas. It is also proposed to enroll 38,000 additional children I n the age group 11-13 in classes 6-7. Provision has also been made for the strengthening of the Inspectorate of Elementary Education, School Health programme, improvements to existing elementary schools, Inservice Training Coursed for Primary School Teachers and revival of Teacher Training Institute.

In the field of secondary education, it is proposed to enroll 19,000 additional children in the age group 13-16 in classes 8-10 in the coming year. A sum of Rs.57.92 lakhs has been allocated for purposes of strengthening the Inspectorate of Secondary Education, Grants to Andhra Pradesh Residential Schools Society for consolidating existing Residential Schools and for opening new Residential schools, IN-service Training for Secondary School Teachers and for strengthening the comprehensive College of Education.

In respect of higher education, the effort has been to make up the deficiencies in accommodation and equipment where there is optimum enrolment and enhance the facilities for Post-graduation by opening new postgraduate Centres. An amount of Rs.41.07 lakhs has therefore been allocated for purposes of strengthening the directorate of Collegiate Education, Development of Collegiate Cell in S.C.E.R.T., and for taking up allied developmental activities.

I may also add that out of the Special Development Funds, Rs. 30 lakhs have been allocated for the three Universities for the starting of Post-Graduate Centres. Besides this Rs.10 lakhs has been sanctioned to the PostGraduate Centre at Warangal and another Rs.10 lakhs to the Post Graduate Centre at Guntur.

In the Technical Education Secotr, out objective has been to consolidate the existing institutions by making up the deficiencies in their staff, equipment and accomodation and take up schemes of diversification and improvement of the technical courses by expanding part-time course, developing sandwich courses and introducing new courses in certain fields where there is demand for trained man-power. IN the coming year, an amount of Rs.10.49 lakhs has been provided for construction of permanent buildings for the Government Polytechnic for Women at Kakinada and for taking up additional buildings at Visakhapatnbam, Gudur, Nandyal, Tirupati and Hyderabad. Technical clearance has also been obtained for the introduction of part-time Diploma Courses in Civil Engineering and Electrical Communication Engineering at Government Polytechnic, Kakinada. To enable these institutions to have an intake of 20 in each course, necessary provision has also been made in the Budget for the coming year. As part of our diversification programme which I had referred to earlier, it is proposed to improve the employment opportunities for Diploma holders by introducing courses such as, Electrical Communication Engineering, Printing Technology and Commercial Practice with an intake of 30 for each course. An amount of Rs. 5 lakhs has been provided for the above schemes in the coming year’s Annual Plan.

Housing and Urban Development

Hon’ble Members are aware of the general trend of increasing urbanisation. IN order to cope with the problems of rapid urbanisation and speedy industrialisation in the Metropolitan and other important urban areas in the Staten the House had, in the last Session, passed the Urban Areas (Development) Bill, 1974. This has received the assent of the President and the Act will be coming into force shortly.

Pending constitution of the Urban Planning and Development Authority, as contemplated in the Act, we have already appointed a Special Officer to do the preliminary work and have also finalised the schemes for implementation in the twin cities with the Central assistance of Rs. 1 crore under the Six Point formula. The Development Master Plan for the twin cities will be notified shortly and the Master Plans for other important places like Vizag, Vijayawada, Guntur, Warangal, Kurnool and Tirupati are being reshaped.

We are also seeking to give a new direction to housing activities by enlarging the coverage for Industrial workers and economically weaker sections and by streamlining the machinery to step up the implementation of various housing schemes by securing assistance from the institutional financing and other special agencies like Life Insurance Corporation, Housing and Urban Development Corporation, etc.

This year, we had obtained Rs.1.05 crores from the Life Insurance Corporation had have passe d it on to the Andhra Pradesh Housing Board and the Visakhapatnam Town Planning Trust for taking up Housing Schemes. The Life Insurance Corporation has also sanctioned a loan of Rs. 2 crores to the Andhra Pradesh Co-operative Housing Societies Federation. A loan of Rs.1.65 crores has been obtained for the Municipal Corporation of Hyderabad from the HUDCO for a commercial complex and a loan of Rs.90 lakhs for the Andhra Pradesh Housing Board.

Rural and Urban Water Supply

Under Rural Water Supply, it has been our continuous endeavour to provide drinking water facilities not only to the main village, but also to the inhabitated hamlets and Harijanawadas attached to the main village. In the coming year, a sum of Rs. 2 crores is provided for Rural Water Supply Schemes which includes a sum of Rs.82.37 lakhs for Protected Water Supply Schemes. In the current year the Plan allocation is being augmented by Rs.204 lakhs from Special Development Funds and it is anticipated that at least a similar amount may be available next year also. For Urban Water Supply Schemes we expect that loans to the tune of about Rs.1.45 crores would be available in the coming year from the Life Insurance Corporation. For augmenting the water supply to the Capital City, StageII of the Manjira Water Supply Scheme has been taken up and a provision of Rs.280 lakhs has been made for this,

Special Schemes for Small Farmers, Marginal Farmers and Drought Prone Areas.

Hon’ble Members are well aware that with a view to improving the flow of credit to the small farmers and also to evolve programmes for their economic improvement, during the Fourth Plan period, the Government have created the Small Farmers Development Agencies and Marginal Farmers and Agricultural Labourers Agencies in the districts of Srikakulam, Cuddapah, Nalgonda and Visakhapatnam. These schemes envisage the provision of credit to the Small and Marginal Farmers who are potentially viable and who, with assistance, can udnertake investments in specific channels in a manner as would ensure their credit-worthiness over a period. In the Firth Plan period, it is proposed to have one composite agency for both Small and Marginal Farmers. We have been able to successfully pursuade the Government of India for allotment of 12 projects for the State during the Firth Plan period. The State Government have already ordered constitution of Small Farmers Development Agencies in the districts of Nalgonda, Hyderabad, Adilabad, East Godavari, Khammam and Medak and of the remaining six projects, four will be coming up next year and the other two in the subsequent year according to the phased programme.

While the Drought Prone Areas Programme which is being currently implemented in the districts of Anantapur, Kurnool, Cuddapah, Chittoor, Mahaboobnagar,Nalgonda and Prakasam will continue in the Firth Plan period, it is now proposed to modify the content of the programme laying greater emphasis on taking up various activities on an integrated watershed basis like Forestry and Soil Conservation measures in the upper catchments and in the fields, pasture development through the combined efforts of the Forest and Animal Husbandry Departments, sheep-breeding on scientific lines, dry land farming and cattle development linked up with dairy production. The object of such an approach is to obtain the desired benefits as a result of the cumulative anc co-ordinated efforts of various agencies. I am happy to say that an agreement has been entered into with the I.D.A. (World Bank) for the formulation and implementation of Drought Prone Areas Programme in Anantapur District.

Besides the provisions that would be available from the various sectoral allocations, a provision of Rs.1 crore has been made for D.P.A.P. and S.F.D.A. Schemes.

Welfare of Weaker Sections

As Hon’ble Members are aware the rates of scholarships for postmatric students belonging to Scheduled Castes and Scheduled Tribes have been increased during this year and the parent’s income limit has also been raised from Rs.3, 600 per annum to Rs, 6.000 for eligibility for these scholarships.

Arrangements have been made for organisation of student managed hostels in all Taluk Headquarters, where there are no hostels now, for accommodating about 16,000 college students belonging to Scheduled Castes and Scheduled Tribes during this year. Orders have also been issued for opening of 15 new college girl’s hostels at District Headquarters where there are no such hostels now.

Government has decided to give incentives in the form of cash and non-statutory educational concessions to encourage inter-case marriages for Social Integration and Social Reform.

A provision of Rs.225 lakhs has been made in the Annual Plan 1975-76 for the Welfare of Scheduled Castes and Scheduled Tribes and other Backward Classes.

In regard to schemes for the economic betterment of these classes, Finance Corporations has been set up. The Corporations are charged with the responsibility of planning, promoting and undertaking the economic uplift of the Scheduled Castes and Backward Classes through programmes of Agriculture and Animal Husbandry, Small and Cottage Industries, Transport and any other trade or occupation. The Corporations will channelise the flow of loans from the Banks and other financial institutions to the needy Harijans and Backward Classes for their economic betterment. An amount of Rs. 86 lakhs has so far been allocated towards Government share capital contribution to the Scheduled Castes Corporation and Rs. 25 lakhs for the Backward Classes Corporation.

The Crash Programme for providing house sites to the weaker sections, viz., Scheduled Castes, Scheduled Tribes and Backward Classes is being continued. A sum of Rs. 150 lakhs has been provided for this in the Budget Estimate for 1975-76.

As Hon’ble Members are aware that in the last three years, the Girijan Development Agency, Srikakulam is engaged in the task of improving the conditions of the tribals. It is heartening to note that the organisation has already identified 28,555 tribal beneficiaries under its various programmes who are either small farmers or agricultural labourers. The success of the above experiment has led to the conclusion that the scope of such organisations to be set up hereafter can be expanded with advantage to the tribals. As part of the strategy for tribal development in the present Plan period, it is envisaged that single organisation charged with regulatory and developmental functions should be set up. Government have since issued orders sanctioning Tribal Development Projects in the districts of Visakhapatnam, Khammam, Adilabad and Warangal which have vast scheduled areas and large concentration of tribal population. The financial resources of the integrated Tribal Development Projects will consist of releases from the general sector under the Sub-plan for Tribal Areas, funds at the disposal of the Director of Tribal Welfare for Special Tribal Welfare Schemes and the financial assistance of Rs.35 lakhs, released by the Government of India.

Land Reforms

The Andhra Pradesh Land Reforms (Ceiling on Agricultural Holdings) Act, 1973 has been brought into force with effect from 1-1-1975. For implementation of the Act, additional Revenue Divisional Officers (Land Reforms) have been appointed for each Revenue Division to function as Tribunals under the Act. All administrative arrangements have been made for the effective implementation of the Act. A provision of Rs. 3 crores has been made in the coming year’s Budget towards payment of compensation to the surplus landholders. As envisaged in the Act, it is also proposed to distribute the lands taken over by the State to the landless poor.

Having spoken about the various developments programmes that we propose implementing in the next year, I now turn to the financial transactions contained in the Budget. I may assure the House that by being brief, I shall not tax your patience-much less do I propose any new taxes.

Accounts 1973-74

The accounts for 1973-74 show a surplus of Rs.11.06 crores, which is mainly attributable to effective collection of arrears of revenue and larger State tax, receipts reflecting the recovery of the State economy. It may be noted that in 1972-73 large amounts of revenue due to the State could not be collected in view of the distributed conditions then prevailing and the acute drought situation which affected wide areas of the State.

Revised Estimates 1974-75

As per the revised estimates the current year’s Revenue surplus is now put at Rs.26.51 crores as against Rs.14.09 crores earlier estimated. The substantial improvement in the Revenue Account is mainly on account of the continued buoyancy of State tax revenues. Capital expenditure is now estimated at Rs.80.83 crpres as against the figure of Rs.64.75 crores earlier budgeted. This is mainly because of provision having been made for expenditure under the Special Development Funds for the accelerated development of backward areas and increase in the Plan outlay. The loan disbursements on Plan account have also risen from Rs.21.75 crores to Rs.33.34 crores as a result of larger provision having between made for agricultural inputs under the Special Rabi Production Programme and additional sums allocated to the State Electricity Board under the Special Development Funds. The current year is now expected to close with a cash balance of Rs.7.83 crores.

Budget Estimates 1975-76

As I mentioned at the beginning, the economic prospects of the next year are encouraging. Based on this economic dynamism and as a result of the additional resource mobilisation, Revenue Receipts are estimated at Rs.505.37 crores as against Rs.459.69 crores in the Revised Estimate 1974-75. Simultaneously, Revenue expenditure is estimated to increase from Rs.433.08 crores in 1974-75 to Rs.491.88 crores in 1975-76. The increase in expenditure on Revenue Account is as a result of sharp rise in prices which has considerably increased in expenditure on Revenue Account is as a result of sharp rise in prices which has considerably increased non development expenditure, particularly on pay and allowances. As Hon’ble Members are aware, in the current year considering the increase in prices, the rates of D.A. of State Government and other related employees were revised upwards with effect from 1-1-1975. Relief was also given to the State Pensioners. The long pending demand of Government employees that the rates of City Compensatory Allowance admissible in the Capital City should be brought on par with Central Government employees was also agreed to upto a certain pay range. The cumulative effect of all these measures would be an increase in Revenue expenditure next year of about Rs. 24 crores. Besides this, normal provisions for travel and office expenses have also been increased to compensate for the price rise. The anticipated surplus on Revenue Account next year is therefore estimated at Rs.13.49 crores. The expenditure on Capital Account next year is put at Rs.86.56 crores. The step up in expenditure is a result of larger provisions having been made for the key sectors of Irrigation, Power and Transport. The net effect of the combined transactions is expected to result in an overall deficit of about Rs.20.34 crores. I hope to cover the deficit partly by better collections of Government revenues. The gap in resources remains despite the considerable effort we have put in the current year for additional resource mobilisation. We, therefore, hope to persuade the Government of India to increase the Central assistance for the State Plan, which has virtually remained frozen since 1973-74, and also to allow the State to go in for larger market borrowings so that the gap could be fully covered.


In conclusion, I would only like to say that our consistent aim has been accelerate the development of the economy of the State and reduce regional disparities and create a just social and economic order. This requires a massive and sustained developmental effort in which I am sure we will have the full co-operation of the Hon’ble Members.

Sir, with these words, I commend the Budget to the House for its approval.

Jai Hind.
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