SPEECH OF SRI.S.SANTOSH REDDY HON'BLE FINANCE MINISTER
PRESENTING THE BUDGET FOR 1991-92
TO THE ANDHRA PRADESH LEGISLATAIVE ASSEMBLY
ON THE 19th, AUGUST,1991.
I rise to present the Budget of Andhra Pradesh for the year 1991-92.
Hon'ble Members would recall that the Vote-on-Account Budget seeking sanction of expenditure for a period of six months upto September, 1991, had been presented to the House in March, 1991 by the Hon'ble Chief Minister. As the Hon'ble Members are aware, the Country is now passing through a crisis on the economic front. The need to maintain extreme austerity to enable the country to tide over these difficult times needs hardly any mention. The limited resources have to be necessarily invested in a judicious manner. This, however, cannot be at the cost of hampering the pace of economic development. We have attempted to formulate this Budget with the twin objectives of maintaining austerity without compromising on allocation of funds to speed up the developmental process in the State and bring about a change in the well being of the poor. While presenting the Vote-on-Account Budget, Hon'ble Chief Minister had appraised this august House of the details of schemes proposed to be taken up in various sectors. I will be only highlighting some of the more important achievements and proposals in my speech.
REVIEW OF ECONOMIC TRENDS
. The overall seasonal conditions during the year: 1990-91, have been generally good though there were dry spells in the month of July, 1990 and excessive rain due to depression in the second fortnight of August, 1990 which have had an adverse impact. During 1991-92, the South West Monsoon had set well in time and is progressing satisfactorily.
According to the provisional estimates, the foodgrains production during 1990-91 is of the order of 126.34 lakh tonnes as against 127.71 lakh tonnes in 1989-90. This marginal decline in foodgrains production is the result of decline in Rabi production which is due to Tungro Virus and limited closure of canals in Krishna and Godavari delta systems for undertaking drainage works. Oil seeds in the year 1990-91, registered an all time record of 26.81 lakh tonnes surpassing the earlier record production of 23.10 lakh tonnes attained in 1988-89.
The Net State Domestic Product (NSDP) for1989-90 (quick estimates) was Rs.21,096 crores at current prices, while constant prices (1980-81) it amounted to Rs.10,861 crores. The structural composition of the NSDP reveals the continuing dominance of the primary sector.
At current prices, the State per capita income increased from Rs.3,340 in 1988-89 to Rs.3364 in 1989-90. At constant prices the State per capita income increased from Rs.1,724 in 1988-89 to Rs.1,732 in 1989-90.
During the year 1990-91, the index number of industrial production showed an increase of 8.7% over that of the previous year. This increase is attributable mainly due to improvement in the power position and better labour situation.
The wholesale price index number for agricultural commodities in the State increased from 404.1 in March, 1990 to 481.6 in March, 1991 registering an increase of 19.2% At the All India Level, the Index rose from 418.5 to 505.6, registering an increase of 20.8% during the same period.
The consumer price index number for Industrial workers in the State increased from 851 in March, 1990 to 959 in March, 1991 registering an increase of 12.7%, while at All India level it increased from 873 to 991, registering an increase of 13.5%. The Consumer Price Index number for Agriculture Labour in the State increased from 601 in March, 1990 to 675 in March, 1991 registering an increase of 12.3%, while at All India level it increased from 736 in March, 1990 to 858 in March, 1991 registering an increase of 16.6%.
The Seventh Five Year Plan ended on 31st March, 1990. The Planning Commission had not finalized the Eighth Five Year Plan which was to cover the period 1990-95. The Government of India have now decided to treat the plans for the years 1990-91 and 1991-92 as Annual Plans and to commence the Eight Plan from the year 1992-93. The National approach to the Eighth Five Year Plan and guidelines for the formulation of the Plan are awaited.
Hon'ble Members are aware that the revised outlay for the Plan for 1990-91 was fixed at Rs.1450 crores as against an outlay of Rs.1323 crores approved by the Planning Commission. Against an outlay of Rs.1410 crores for 1991-92, approved by the Planning Commission, we have included Rs.1716.49 crores in the Vote-on-Account Budget. Due to some additional commitments, the Plan Outlay has been marginally increased to Rs.1724.09 crores in the Final Budget.
I have earlier referred to the resources constraint for financing investments in new Plan initiatives. As the Hon'ble Members are aware, the central assistance for State Plan is governed by a formula and bears no direct relation to the size of the Plan outlay. The Government of India, however, provides additional central assistance outside the formula only in cases where projects with external assistance are under implementation as part of the State Plan outlay. Keeping this in view, the State Government have in the last few years formulated a number of project and posed them for external assistance. I am glad that our sustained efforts have yielded good results and we have been able to get clearance from the external agencies for a number of schemes. You will, therefore, come across many references to external assistance when I elaborate on the Plan outlay in many sectors.
Power Sector continues to receive priority as development of the State depends on sustained and reliable power supply. During the year 1990-91, with an addition of 300 MW of installed capacity, the total installed capacity available in the State was brought up to 4893 MW, comprising of 4131 MW in the State sector land 762 MW in the Central sector, and thus fulfilling the target for the year. Our Power Stations continue to perform creditably, with the Vijayawada Thermal Power Station once again bagging the 'Meritorious Productivity Award' for the 7th year in succession. The gas turbine unit of 33 MW capacity in the Southern Region at Vijjeswaram s commissioned in the joint sector. Another notable achievement has been the commissioning of 400KV Chandrapur-Ramagundam Tie line between the Western and Southern Regions, thus enabling us to draw power from Maharashtra/Western Regions as and when spared by them. The clearance of the Government of India and Central Electricity Authority was also obtained for the Vijayawada TPS Stage-III, Visakhapatnam TPS and the gas based TPS at Jegurupadu at Rajahmundry. A gas allocation of 15 lakh cubic metres per day was also obtained for the gas based power station.
During the course of 191-92, the installed capacity is proposed to be raised to 5054 MW, of which 4247 MW would be in the State sector and 807 MW in the Central sector, with the commissioning of more units of various generating stations. The Central Electricity Authority has also confirmed the suitability report for the port based TPS at Krishnapatnam in Nellore District and further investigations are in progress. Civil works on the Rayalaseema TPS financed by the Asian Development Bank are in progress and two units are scheduled to be commissioned in1993-94. Similarly, works are in active progress on the Srisailam Left Bank Power House.
Government considers investment in the Irrigation sector and creation of water use potential as a thrust area for ensuing rapid economic development. I have, therefore, provided Rs.346.54 crores for this sector. Substantial part of these provisions go to fund the on-going works on major irrigation projects, including Srisailam Right Bank Canal, Srisailam Left Bank Canal, Telugu Ganga Project, Jurala, Galeru Nagari, Sriramsagar project and the Tungabhadra High Level Canal serving the most backward and drought prone areas of our State. Provisions for the Medium Irrigation sector will go to projects such as the Andhra Reservoir, the Upper Kaulasanala Project, Buggavanka, Chalamelavagu, Maddileru and Puttakanuma Projects. Early completion of these projects sets right past regional imbalances in the creation of irrigation facilities. Provisions for Minor Irrigation are made for deriving early benefits and in this sector, as also in that of the Medium Irrigation sector, special attention is paid to early completion of works and in taking up works under the Tribal Sub-Plan and the Special Component Plan for Scheduled Castes.
Creation of irrigation potential in the backward and drought prone areas of our State is our abiding concern and investigation of irrigation schemes is to be funded accordingly. The Government has, therefore, sanctioned 4 additional circles and 19 divisions for taking up detailed investigation of new major schemes in the Rayalaseema and Telangana Region consisting of Handri-Niva-Sujala Sravanthi, Tungabhadra Project, parallel High Level Canal - Lift Irrigation Schemes for feeding Chitravati Balancing Reservoir, Nettampadu and Kalvakurthy Lift Irrigation Schemes, as well as Veligonda Project in Prakasam District.
The combined irrigation potential which will be created in the current year is 5,390 hectares. I would, at this juncture, like to bring to the notice of the House that we have completed the Yeleru Left Main Canal for supply of water to the Visakhapatnam Steel Plant, in terms of the commitments made to the Steel Plant Authorities. The Government have also sanctioned Rs.215 lakhs for urgent repairs to the Gannavaram aqueduct and has made a provision of Rs.50.00 lakhs during the current financial year ensuring there by availability of water to the Central Delta and uninterrupted flow of traffic in the region.
Hon'ble Members are aware of the Irrigation and Drainage works undertaken in the districts ravaged by May, 1990 Cyclone. During 1990-91, a significant number of works have been grounded and the current year will witness a marked step-up in the execution of these works.
Agriculture and Allied activities continue to be the main stay of the economy of the State and its people. In spite of the devastating Cyclone of May 1990, and the out-break of Tungro Virus in some of the coastal districts, the overall food production in 1990-91 was only marginally less than the previous year's level of production. However, this slight shortfall was compensated by substantial increase in production of pulses and all time record production of oil seeds. The production of oilseeds touched an all time high and in cotton and mesta also, there was considerable increase in production.
It is hoped that with the onset of monsoon in time and with indications that it would be almost normal this year, the prospects of a more than normal Khariff production in foodgrains and oilseeds are bright.
In the current year, water-shed approach under the dry land farming is being given a major thrust through the World Bank Aided Programme. Similarly, through the World Bank Aided Cyclone Emergency Reconstruction Project, a massive effort has been made for the reclamation of the sandcast lands by making available the required credit. Horticulture has not received proper attention so far. Realizing the tremendous potential of horticultural crops in the State, the Government has proposed a four-fold increase in the Plan provision as compared to 1990-91. Under the Cyclone Project and from the Plan provisions, the existing nurseries are being strengthened, in addition to establishing new nurseries. As in many of the areas with potential for horticulture crops water is scarce, particularly in Rayalasema, drip irrigation would be encouraged.
A massive programme is being launched to take up Oil Palm cultivation in the State. The first processing plant is already under construction in West Godavari District. To make available the required seed sprouts and seedlings, one seed nursery has already been established and three more will be established. A large Seed Production Farm with production capacity of 14 lakh seed sprouts per year is already sanctioned. An integrated Oil Palm processing plant at a cost of Rs.8 crores is being set up in West Godavari District, as a Joint Venture by A.P.State Agro Industries Corporation. With the initiative of A.P.Co-operative Oilseeds Growers' Federation and other agencies, the State would be making major strides towards making available larger supplies of edible oil.
The Hon'ble Members may recall that when the loan waiver scheme was introduced by the Government of India, the State Government was made to share 50%of the cost of the scheme in respect of loan amounts written off in the co-operative sector. As no State was in position to bear this burden in one year, the NABARD advanced the amount to the State on the condition that the amounts so advanced would be repaid by the State in three installments. To meet the liability arising on this account, Rs.55 crores is provided in the current year's Budget.
Andhra Pradesh has a vast potential for exploitation in the fisheries sector with its long coast line, brackish water areas and inland water spreads. To tap this potential, a Brackish Water Shrimp Production and Inland Fisheries Scheme with an outlay of about Rs.76.00 crores has been prepared and is in the final stage of negotiations with the World Bank.
Over earlier Plan periods, we have invested substantially in public assets, notably on roads. However, maintenance of these assets created with Plan Funds has regrettably lagged behind. This trend is now being reversed and special attention has been focused on improving the existing road network in the current Budget. Hon'ble Members are aware of the special rural roads programme launched in continuation of the efforts for improvement of the roads in Twin Cities of Hyderabad and Secunderabad and the Municipal Corporation in the State. To enable the APSRTC to resume services on routes which were withdrawn due to poor road conditions and also to enable it to introduce fresh routes, an additional investment of Rs.100 crores over and above the normal provision of Rs.86.21 crores is made during 1991-92 for the improvement of rural roads. The work is being executed substantially, by the Panchayati Raj Department, with the Roads & Buildings Department taking care of the roads falling within its jurisdiction.
My proposals for the roads sector would be incomplete without a reference to the initiation of work on the Hyderabad - Karimnagar-Ramagundam Road, running through the most backward area of our State connecting Hyderabad to the Industrial Complex at Godavari Khani at an estimated cost of Rs.131 crores. The developmental aspirations of the region will be met by this project, which has been dedicated to the memory of our beloved leader Sri.Rajiv Gandhi. The Prime Minister inaugurated the work on the Rajiv Gandhi Rahadari on 7th July, 1991.
The Government have entered into an agreement with the Asian Development Bank for funding the Kakinada - Rajanagaram road connecting the Port Town of Kakinada to be executed at an estimated cost of Rs.33.83 crores. The simultaneous development of the road infrasturcture and the Port at Kakinada are inter-linked and would contribute significantly to the industrial development of the region. The detailed planning and designing of the Kakinada Port Development Project at an estimated cost of Rs.131 crores has been completed and procedures for inviting prospective bidders for executing the work are almost complete.
In the Industrial Sector, the Government will endeavor to create conditions conducive for industrial investment. Let me take this opportunity to express our appreciation of the new Industrial Policy announced by the Government of India. In consonance with this new Policy, the State Government have initiated several steps to encourage and increase the pace of industrial development. The Government is determined to give a big boost to the Power Sector and investments in industrial infrastructure have been increased. The State has already an incentive regime which is amongst the most attractive in the Country. New schemes are being devised particularly for Non-Resident Indians. The State Government have already announced that they would strongly support private investment in the Sugar Sector. Further, the State Government would take all steps to ensure that location and pollution clearances are speedily accorded.
In an effort to encourage new export industries and to increase the value of goods exported from A.P.., the State Government is committed to the development of the Export Processing Zone (EPZ) at Vizag. A total programme at a cost of Rs.160 lakhs for improving the facilities of the EPZ has been prepared and an allocation of Rs.84 lakhs is proposed in the current year's budget.
The State Government has also made an allocation of Rs.200 lakhs in the current year budget as State's share in setting up of the 4 identified Growth Centres.
The Government is particularly keen to encourage industries in high-technology areas. Government of India have, on the request of the State, established a Software Technology Park in Hyderabad. The Park has been established in a spacious premises at a conveniently located place. 26 Entrepreneurs have so far registered in this Park. It is hoped that the value of the software production in this Park would reach a level of Rs.100 crores by 1995.
There are at present 33 Sugar Factories with a total daily crushing capacity of 56,650 MTs. Recognizing the vast employment potential of this Industry, the State Government had taken a decision to encourage the establishment of Sugar Factories in joint and private sectors. I am glad that the response has been encouraging. Government has also made a provision of Rs.187 lakhs for enabling NSF to continue its modernization and expansion schemes at Bobbili, Metpalli and Madhunagar.
While the thrust to expand industrial investment has been accentuated, the Government have also recognized the need to provide a system for rehabilitating sick industries. A new Department for Industrial & Financial Reconstruction has therefore been created to provide integrated service and support to industries which require help. We hope that more than 30 industries would be successfully rehabilitated through appropriate financial packages.
Andhra Pradesh has made phenomenal strides in the development of the sericulture industry. It occupies the second position in the country with a production of 32,262 tonnes of mulberry cocoons. Employment has been generated for about 9 lakh persons through this industry. Special programmes for SCs and STs are being implemented in this sector and over 25,000 SCs and STs have already been covered under these programmes.
A World Bank-aided National Sericulture Project, with an outlay of Rs.118.44 crores, has been sanctioned for implementation over a five-year period from 1989-90. By the end of the project period, silk yarn production within the State is expected to reach a level of 2,500 tonnes per annum and additional employment will be generated for 1.62 lakh persons in the State. The project provided for supportive infrastructure such as seed farms, grainages, cocoon markets, training centres, research and development , and a credit component for the on-farm and non-farm sectors through commercial banks and IDBI.
For the year 1991-92,a plan outlay of Rs.6.93 crores is earmarked for sericulture development.
World Bank have agreed to extend a loan of Rs.80 crores spread over a period of 8 years for the development of technical education at diploma level in the State. The main thrust in the project is on consolidation and modernization of existing facilities. However, expansion in a limited way is also envisaged through opening of three new polytechnics and 30 diploma and post diploma courses in emerging and diversified disciplines.
The main schemes of consolidation in the project include building programme costing about Rs.29 crores and provision of modern equipment, furniture and library facilities with an outlay of Rs.37 crores. The other schemes include construction of hostels in all Women's Polytechnics, providing staff quarters in remote areas, setting up of Computer Centres in all Polytechnics, introduction of schemes like 'earn while learn' and industry-institute-inter action, awarding autonomy to selected polytechnics etc.,
Hyderabad has had the unique distinction of hosting the Pre-Olympic Football Tournament which was awarded to India for the first time. Hon'ble Members are aware of the tremendous response and enthusiasm that this tournament has generated amongst the people. Government have provided a grant of Rs.4.40 crores to improve the infrastructure at the Lal Bahadur Shastry Stadium and bring it up to international standards. It is hoped that this would give a major fillip to the sporting activities in the State and we would have the distinction of hosting many more National and International Tournaments. This will be the surest way of channeling the energies of the youth in the right direction, while inculcating in them discipline and team spirit.
The talent available in the rural areas is enormous, and with a view to spotting and promoting such talent, Sports Authority of Andhra Pradesh is implementing a new scheme 'Grameena Kreeda Vikasa Pathakam' in every village and have allotted Rs.68.40 lakhs to the Zilla Parishads.
The Labor Department has been strengthened for effective enforcement and redress of grievances; Revision of minimum wages has been taken up vigorously and wages are being revised for 39 employment's. A scheme of variable D.A.., has also been introduced for minimum wages. A.P.Labor Welfare Fund has been strengthened with a matching contribution of Rs.20 lakhs from the Government. The Labor Welfare Board has taken up sanction of scholarship and medical assistance to deserving workmen and their families.
While presenting the Vote-on-Account Budget, the Chief Minister had informed the House that the Government would identify the problems of landless agriculture labor and devise and implement appropriate schemes for their welfare, with special emphasis on female labor, as part of the package of facilities to be provided to agricultural labor. Government have issued orders for the implementation of the Scheme of Maternity Assistance. This Scheme provides for grant of assistance of Rs.900/- to women, whose occupation is agricultural labor, for the first and second pregnancies. This amount will be disbursed in the critical periods of pregnancy i.e., 8th and 9th months and in the first few months after delivery, enabling proper rest and nourishment. This, we believe, will go a long way in bringing down the infant mortality rates. A sum of Rs.10 crores has been provided in the Budget: 1991-92 to cover, 1,10,000 beneficiaries in the State. Other schemes are on the anvil and will be announced soon.
Government reiterates its commitment to the uplift of the weaker sections and various welfare schemes are being continued to achieve this goal. On the educational front, amongst some of the more significant steps taken, orders have been issued enhancing mess charges for the boarders of Social Welfare hostels from Rs.120/- to Rs.150/- per month. This would go a long way in neutralizing the rise in prices. Similarly, the stipend for law graduates belonging to SC/ST/BCs who undergo preliminary training has been enhanced from Rs.300 to Rs.500/- per month, while simultaneously increasing the book allowance from Rs. 1000/- to Rs.3000/- per year.
The A.P.Scheduled Castes Co-operative Finance Corporation continues to do pioneering work in the implementation of various economic support programmes for the benefit of Scheduled Castes. During the year 1990-91, it implemented programmes worth Rs. 95 crores for the benefit of 1,50,000 beneficiaries. During the current year, it is proposed to implement programmes with an outlay of Rs.131 crores.
Hon'ble Chief Minister, while presenting the Vote-on-Account Budget, had said that 1.15 lakh people would be covered additionally under various pension schemes during the course of the current year. I am happy to inform this August House that orders in this regard have already been issued and an additional provision of Rs.4 crores for the purpose has been made in the Budget.
In addition to the on-going programmes, the A.P.Tribal Development Project, assisted by the International Fund For Agricultural Development, is being implemented from the current year. This project, with an outlay of Rs.77 crores, would benefit nearly 63,400 tribal families over 7 years. A provision of Rs.2 crores has been made in the Budget for current year.
With a view to providing better educational facilities for tribals of our State, 5 new Ashram Schools are proposed to be opened during the current year.
Welfare of Backward Classes continues to get due importance in the Budget. It is proposed to open 30 new Backward Classes hostels during the current year. On the economic front, 40,000 Backward Class families would be assisted by the A.P.Backward Classes Co-operative Finance Corporation under various schemes. Special programmes are also contemplated for Washermen and Nayee Brahmins and adequate provision has been made for the purpose.
WOMEN & CHILD WELFARE
The World Bank assisted integrated ICDS., Project covers 110 blocks predominantly in Tribal, drought prone and backward areas. The project would be implemented over a period of l6 years and all these blocks would be operationalized in 3 years. In order to make available all the services for women and children in the rural areas through one agency, it is proposed to integrate health, nutrition and women development services and make them available through the Anganwadi. For this purpose, various steps for integrating and co-ordinating the services are also being taken.
To take care of orphan children and provide them with food, clothing, education, pre-vocational and vocational training , a scheme of 'Children in Need of Care and Protection' is being implemented during the year : 1991-92. An amount of Rs.33.64 lakhs has been provided for this purpose.
Government have also taken up construction of Hostel buildings for working women and construction of buildings for four Bala Streela Sikshana Kendrams in the districts of Prakasam, Kurnool, Warangal and Mahabubnagar.
Reversal of urban degradation continues to receive high priority. A provision of Rs.376 lakhs is made in the current year for Environmental Improvement Scheme to provide basic amenities such as roads, drains, water supply and street lights benefiting 1.25 lakh slum dwellers. Under the programme of assistance of Overseas Development Agency, the current year outlay for the Municipal Corporation of Hyderabad, is Rs.9.40 crores, for the Visakhapatnam Municipal Corporation Rs.4.47 crores and Rs.3.50 crores for Vijaywada Municipal Corporation.
The Government are deeply concerned about the deterioration of the urban infrastructure such as roads, drinking water facilities and drains. To provide immediate relief to the road users, a special grant of Rs.13.21 crores is provided in the current year to Municipalities and Corporations to take up repairs to the roads.
Government are seriously concerned about the financial position of the Municipalities and Municipal Corporations. Act 20 of 1989 (brought into force w.e.f.1-11-1990) and Assessment of Tax Rules, 1990, pave the way for scientific revision of property tax and augmentation of municipal income. To aid the tax collection effort under the new dispensation, Municipalities whose tax collection is less than eighty five percent, of the demand of each year may suffer a cut in the grants/compensations to be released by Government. On its part, the Government have provided in the non-plan budget of the current year Rs.10.44 crores for various compensations and Rs.26.81 crores for other grants to be released to the Municipalities/Municipal Corporations.
Manjira Phase-III (Singoor Project) has been completed at a cost of Rs.75 crores. From September, 1991, an additional quantity of 30 million gallons per day will be available, taking the total supplies to the twin cities to nearly 120 million gallons per day. The execution of Manjira Phase-IV, which is a World Bank Aided project, is in progress and on completion would supply another 30 million gallons per day to the twin cities by 1993-94.
MEDICAL AND HEALTH
Government have taken up the India Population Project VI in 1990-91, at a cost of Rs.44.90 crores, with a view to strengthening the man-power development capacity of Health and Family Welfare Department. The period of the Project is five years. The State Government now proposes to take up India Population Project-VIII to provide Family Welfare and Primary Health Services to the Urban Community particularly slum-dwellers in Hyderabad City. This Project at a cost of rs.3481 lakhs is proposed to be taken up as a fully funded Centrally Sponsored Scheme.
Government have sanctioned an adhoc payment of Rs.500/- to all categories of lNon-Gazetted Government employees and also teaching and non-teaching staff of Local Bodies.
The accounts for the year 1989-90 revealed a revenue deficit of Rs.238.23 crores and an overall deficit of Rs./56.71 crores.
REVISED ESTIMATES 1990-91
Transactiions as per the Revised Estimates 1990-91 indicate the revenue deficit as Rs.286.80 crores against the estimated revenue deficit of Rs.325.01 crores.
BUDGET ESTIMATE 1991-92
The revenue deficit for the year is estimated at Rs.561.90 crores. The overall transactions of the year 1991-92 are estimated to result in a gap of Rs.221.58 crores. After taking into account the opening minus balance of Rs.(-)25.88 crores, the year 1991-92 is estimated to close with a deficit of Rs.247.46 crores.
I am aware of the large uncovered deficit in the Budget presented by me. We shall endeavor to bridge this gap by minimizing non-productive expenditure, while maximizing tax collections through more vigorous efforts.
With these words, I commend the Budget for approval of the House.
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