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GOVERNMENT of ANDHRA PRADESH
FINANCE DEPARTMENT
Previous Budget Speeches

FINANCE MINISTER'S SPEECH 1994 - 95

 
GOVERNMENT OF ANDHRA PRADESH

BUDGET SPEECH
1994- 95

K. ROSAIAH
MINISTER FOR FINANCE

SPEECH OF SRI K. ROSAIAH
HON'BLE FINANCE MINISTER
PRESENTING THE BUDGET FOR 1994-95
TO THE ANDHRA PRADESH LEGISLATIVE ASSEMBLY
ON THE 21ST OF FEBRUARY, 1994.

 

Introduction

Sir,

I rise to present the Budget of the Government of Andhra Pradesh for the year 1994-95.

2. The current year has been an unusual difficult one from the finance point of view. There was intense pressure both from the revenue and expenditure sides, calling for utmost vigilance, caution and prudence in financial management. Hon'ble Members are aware that in response to a spontaneous and wide spread agitation by our sister citizens our Government took the bold and decisive step of banning the sale of arrack with effect from 1st October 1993. Notwithstanding the sacrifice of revenue of over Rs. 600 crores per year, we took this policy decision out of a deep conviction that the welfare of our poorer sections is more important than revenues to the Government. This significant beginning to our prohibition policy should, in the medium term, contribute to raising the income levels of the poorer families and to proving their nutritional and productivity standards, which in turn would enhance their equality of life. We are determined to implement the prohibition policy and towards this end have taken several steps such as augmenting the enforcement staff, vehicles for better mobility and modern communication facilities. We have also launched a comprehensive public city campaign to propagate the message of prohibition. We solicit the enthusiastic co-operation of all sections of society in this noble endeavor.

3. On the expenditure side, in order to honor our commitment to the weaker sections, our Government absorbed the entire burden of the increase in the issue price of rise by the FCI, substantial as it was, in order to maintain unchanged the sale price under the rice subsidy scheme.

4.It is a matter of deep satisfaction to me as the Finance Minister that in spite of these pressures on the exchequer, we were able to sustain the tempo of our welfare and development programs, fulfill all our debt servicing obligations and above all manage our ways and means position without even ones going into over draft. Our financial management was commended which by the Union Finance Minister, the Planning Commission and more recently by the Finance Commission.

Tenth Finance Commission

5.The Tenth Finance Commission under the chairmanship of Sri K.C. Pant visited our State earlier this month and held wide-ranging discussions. In his submission before the commission, the Chief Minister argued for a significant increase in the quantum of devolutions to the States in order to enable them to play a meaningful and pro active role in the context of the new economic policy. He pointed out to the commission that the States have a heavier responsibility towards providing a social safety net to protect the poor during the transition period of economic reform and towards building high quality infrastructure to support entrepreneurial activity.

6.The Chief Minister also requested the commission to support the State in implementing the prohibition policy by providing full neutralization for the revenue sacrificed on account of the ban on the sale of arrack. Further the Chief Minister urged that the heavy burden being faced by the Government encountering the extremist activity should be taken into account in evaluating the State's expenditure commitments. The commissions attention was drawn to the issue of consignment tax as the delay in legislation in this regard is causing substantial loss of potential revenues to the States. Keeping in view the need for resources for the several developmental tasks ahead of us, we also pleaded for substantial relief in the repayment of loans to the centre.

Seasonal and Crop Conditions

7. The South West monsoon entered Andhra Pradesh on a weak note on the 4th of June and remained weak, scanty and erratic through the end of September. The State as a whole received 19 percent less than the normal rainfall, fall during the South West monsoon period. Because of the deficit South West monsoon and more particularly because of its erratic temporal distribution, the coverage under crops, both irrigated and rainfed was affected. As against 27.05 lakh hectares. Similarly the coverage under rain fed rainfed agricultural crops fell from 53.89 lakh hectares in the previous season to 47. 65 lakh hectares. The adverse impact was contained to some extent by the somewhat satisfactory precipitation towards end of September and early October, 1993. In spite of increased productivity, the Kharif foodgrains production during 1993-94 is expected to be 75.86 lakh tonnes as compared to the previous year production of 80.22 lakh tonnes reflecting a decline of 5.4 percent. However, the production of groundnut, castor, sesame and sunflower during 1993-94 Kharif season is estimated to grow to 18.78 lakh tonnes, up from last year's level of 14.81 lakh tonnes, by 26.8 percent. The Rabi crop prospects are promising.

Review of Economic Trends

8. Latest estimates place the net State Domestic Product for 1992-93 at current prices at Rs. 39,704 crores, as against Rs. 37,165 crores during 1991-92 ( provisional) registering an increase of 6.83 percent. The State per capita income at current prices increased from Rs. 5529 in 1991-92 to Rs. 5802 in 1992-93, registering an increase of 4.9 percent. The movement of the average index of industrial production during April-December 1993 showed an encouraging trend compared to the corresponding period of 1992, with an increase of 45 percent.

9. The Wholesale price index ( 1970-71= 100) for agricultural commodities increased from 597.4 points in October 1992 to 662.6 points in October 1993, registering an increase of 10.9 percent as against an increase of 8.3 percent at the All India Level. The consumer price index (1960= 100) for industrial workers increased from 1204 points in October 1992 to 1264 points in October 1993 reflecting an increase of 5 percent as compared to an increase of 7.4 percent at the national level. The consumer price index for agricultural labour for the same period, on the other hand, declined by 8.3 percent as against an increase of 3.2 percent at the national level.

Annual Plan

10. For 1994 95, which is going to be the third year of the 8th 5 year plan, the Planning Commission approved an outlay of Rs. 2130 crores for our State Annual plan, reflecting a growth of 15.1 percent over the approved outlay of Rs. 1851 crores for 1993-94. However, keeping in view the compelling requirements in the infrastructure sectors, particularly irrigation and power, we have decided to provide for a plan outlay of Rs. 2410 crores in the Budget of 1994-95. In the inter-se allocation of plan resources among sectors, we have tried to maintain a healthy and viable balance between the need to provide high equality infrastructure in irrigation, power and communication sectors on the one hand and the need to maintain the tempo of welfare programmes, so vital for providing a safety net to the poorer sections, on the other. It is a matter of pride for the Government, and for me personally as the Finance Minister, that we have not let the resource crunch during the current year affect the size or the quality of our Plan schemes.

Irrigation

11. The outlays of the irrigation sector reflect the Government's conscious policy of fully exploiting the irrigation potential by completing the ongoing schemes expeditiously and simultaneously making head way in respect of new schemes. Hon'ble Members would notice that the outlay on the irrigation sector has been substantially stepped from Rs. 537 crores in 1993-94 to Rs. 620 crores next year despite phasing out of investments under the nearly complete Cyclone Emergency Reconstruction Project.

12 in the area of Major Irrigation, specially accent is laid on the World Bank assisted Sriramsagar and Srisailam Right Bank Canal projects. The Telugu Ganga project, which provides irrigation to the drought-prone areas of Rayalaseema, has been provided an allocation of Rs. 130 crores of which Rs. 60 crores is the State's share and Rs. 70 crores is the contribution from the Tamil Nadu Government. We are in the process of finalizing the offers received for the detailed investigation of the Srisailam Left Bank Canal which involves application of modern technology for excavation of the tunnel. We are also confident of obtaining environmental clearance from the Centre for the projects shortly. The technological and the environmental problems surrounding this project from its very inception can be considered to have been overcome and we hope that the work on this project would commence shortly. Keeping these factors in view, an outlay lay of Rs. 18 crores has been provided for Srisailam Left Bank Canal in 1994-95. Which also expect to start the initial work on Galeru-Nagari and Hundri-Niva in the coming year. The outlay for these 2 projects has, therefore, been stepped up to Rs. 10 crores and Rs. 7 crores respectively for next year. The Jurala Project is under active execution and we hope to provide partial irrigation benefits by June 1994. The Flood Flow Canal from the foreshore of Sriramsagar has been provided an outlay of Rs. 12.20 crores.

13 Hon'ble Members are aware that a large number of Medium Irrigation Projects are in need of critical balancing investment. In an effort to complete these projects, the outlay for medium irrigation has been enhanced to Rs. 35 crores in 1994-95, up from the current year's level of Rs. 22 crores.

14 inadequate maintenance of some of the old irrigation systems has led to low satisfaction levels under the registered ayacut and suboptimal water utilization. Modernization of these systems has become an urgent imperative to optimize the benefits of investments. In pursuance of this objective, Government have taken up modernization of the K.C Canal and the Tungabadra Low Level Canal. The problem of supply of water in the Nagarjuna Sagar Command Area due to frequent breaches in the canal and distributary system has been a matter of concern to the Government. A provision of Rs. 20 crores has been specially made for taking up repairs and improvements to the system in the Budget for 1994-95.

15. The Cyclone Reconstruction Project launched with World Bank assistance is nearing completion and the beneficial effects of the works taken up under the project are already reflected in higher levels of productivity and better infrastructure in the coastal areas. It is a matter of great satisfaction to us that the quality and pace of work under this project has been commended by the World Bank; indeed both Government of India and the World Bank are sending teams to study our implementation and monitoring mechanisms for replication in other States.

16. The farmers of Krishna, Godavari and Pennar delta have urged the Government to take up repairs of minor drains. It is expected that an investment of Rs. 40 crores would be required for taking up repairs to the minor drains in Krishna Godavari basins and the medium and minor drains in the Pennar basin. We propose to complete these works in 2 years and for 1994-95, an outlay of Rs. 17 crores has been made for this purpose.

17. Development of Minor Irrigation sources, which provides considerable relief in dispersed locations in upland areas has received a great fillip in the current year with the provision of Rs. 100 crores exclusively for this sector. This program, which is being implemented with decentralized decision-making at the district level, has been widely welcomed all over the State. In view of the encouraging response to this program, we would like to continue this program next year also with an outlay of Rs. 100 crores.

Energy

18. Our sustained effort and investments over the last 4 years in the power sector have started yielding results. During 1993-94, 2 new units of 10 MW each have been commissioned at Penna Ahobilam Hydro Electric Station. Large scale augmentation of installed capacity will materialize next month when the first unit of the Rayalaseema Thermal Power Station, the first unit of the Vijayawada Thermal Power Station stage-III, each of 210 MW and the first unit of the Upper Sileru Hydro-Electric Station Stage-II of 60 MW are commissioned. In addition, the State is going to get an additional 45 MW of power from the central pool.

19. For 1994-95, the Government have approved a Plan outlay of Rs. 653 crores for the Andhra Pradesh State Electricity Board. Our plans for next year include completion of the second unit of the Rayalaseema Thermal Power Station, the second unit of the Vijayawada Thermal Power Station stage-III, each of 210 MW, and the second unit of the Upper Sileru Hydro Electric Station stage-II of 60 MW. These 3 units will together add 480 MW to the installed capacity.

20. In order to further increase investment in the Power sector, the budgetary support to APSEB needs to be supplemented by external funds. Government are contemplating a major restructuring of APSEB involving, among other things, debt-equity swap, to make the Board financially more robust and thus improve its access to financial markets.

21. We are convinced that for meeting the growing demand for power, the involvement of and investment from Private Sector is extremely essential. Towards this end, 3 major power stations at Jegurupadu, Kakinada and Visakhapatnam will be built in the private sector. The Jegurupadu and Kakinada power stations, which are both gas based and of 200 MW each, are being planned for commissioning by December, 1995, while the first unit of the Visakhapatnam Thermal Power Station will be operational by mid 1998. Private promoters for these 3 power stations have already been identified while we expect to firm up all details in respect of 2 more coal based thermal power project of 500 MW each at Krishnapatnam and Ramagundam in the next couple of months.

22. Our effort in the field of non-conventional power generation using wind energy has recorded commendable progress. 7 private entrepreneurs have been accorded clearance of establishing 178.5 MW of power capacity out of wind energy. Similarly 5 private developers have been identified for setting up mini hydel power stations of a total generating capacity of 25.6 MW.

23.Government have launched a major drive for the energisation of agricultural pump sets belonging to small and marginal farmers. During 1994-95, 1 lakh agricultural pump sets are programmed for energisation in addition to an equal number taken up in the current year. At least half of these wells belong to SC, ST and BC communities. This program is expected to substantially increase the income levels of these weaker sections.

24. The tripartite agreement formulated by the State Govermnent with Government of India has launched the much delayed financial restructuring of the Singareni Colleries. The Restructuring will make the company financially more viable, enhance its operational efficiency and aid increased production. This will not only help the power sector but also provide the required fuel for general industrial activity in the State.

Social Welfare

25.Improving the quality of life of the weaker sections continues to be the Governments major thrust area. The allocation for the welfare of the scheduled castes, scheduled tribes and backward classes is being increased by 50 percent for the financial year 1994-95, up from Rs. 86.67 crores during this year to Rs. 130 crores next year. This increase of as much as 50 percent in the plan outlay for the Social Welfare Sector, although the overall plan outlay is increasing by only 16 percent, is a testimony to our Government's deep commitment to the welfare of the vulnerable segments of the society. For improving educational facilities, especially for the girl students, the Government have earmarked an amount of Rs. 1 crore for 100 private hostels for the college going girl students. The facilities and amenities in the Social Welfare hostels will be improved while wardens and matrons will be put through training programmes to make them more sensitive and responsive to the concerns of the inmates. The existing facilities for coaching scheduled caste and scheduled tribe students for competitive examinations will be improved. Government also propose to set-up guidance cells to advise scheduled caste students on employment opportunities.

26. For improving the access of backward classes to educational facilities, 17 new hostels and residential schools, with due emphasis on girls hostels, are proposed to be opened in undeveloped pockets. A new scheme of pre-metric scholarships for bright students of backward classes has been proposed for introduction in 1994-95. The Backward Classes Finance Corporation has set a target of assisting 50000 poor families to take up viable economic activities. Schemes are also under formulation by the A.P. Washermen Co-operative Societies Federation and AP Nyeebrahman's Co-operative Societies Federation for increasing assistance and coverage through financial assistance from the National Backward Class Finance Development Corporation.

27. Increased outlays have been proposed for providing community services in Harijanwadas. Vulnerable groups like leather workers will receive particularly close attention. The Scheduled Caste Finance Corporation targets to cover one lakh beneficiaries during 1994-95.

28. In the tribal welfare sector, the ongoing schemes are being expanded with focus on agriculture, horticulture and minor irrigation. The scheme of demarcation of forest boundaries will continue next year. To expand the coverage of education, primary schools will be opened in school-less habitations. The Scheduled Tribes Cooperative Finance Corporation will provide investment subsidy to tribal entrepreneurs.

Agriculture and Co-Operation

29. The agriculture sector is the backbone of our State economy and hence welfare of the farming community remains the Government's utmost priority. In order to protect the farmers from the adverse impacts of the fertilizer decontrol, the Government provided a subsidy of Rs. 40.83 crores on the distribution of phosphatic and potassic fertilizers to farmers during the last Kharif season. This subsidy scheme will be repeated during the Rabi season. The farmers were agitated when the price of chillies started to drop steeply during the last season. In order to support them, the Government arranged for market intervention operations through NAFED and MARKFED and procured 13840 tonnes of chillies valued at Rs. 23 crores by offering remunerative prices.

30. Accumulated experience tells us that agricultural production and productivity have as much to gain from non-cash inputs as from cash inputs. Agricultural extension service, therefore, becomes a critical inputs towards improving the level of productivity and production. In an effort at expanding the reach of the extension service, it has been decided to further decentralize the set-up by posting an officer of the Assistant Director level in charge of at most 4-5 mandals. This improved access to expertise, we are confident, will aid transfer of technology and adoption of more efficient farming practices.

31. The Government are discussing with the World Bank the taking up a Comprehensive Agriculture Development Project. A fact finding mission from the Bank visited us recently for initial discussions. The project is multi dimensional in its coverage and seeks to address a wide variety of missing links in agricultural finance, technology and infrastructure with particular emphasis on dry land farming.

32. Sericulture, as is well known, is an employment intensive activity which can be taken up even in areas where traditional agriculture is not very promising. It is programmed to bring an additional area of 10,000 acres under mulberry cultivation during next year, for which the budget provides an outlay of Rs. 13.06 crores. In a further effort towards raising their income levels, 1994 has been declared as the year of women in sericulture. An amount of Rs. 40 lakhs has been earmarked to support this program targeted at women.

33. As we open up our economy to market forces, the prospects of the farmers depend not only on the levels of production but also increasingly on the prices determined in the market place. Marketing support, therefore is becoming increasingly vital in the production-distribution network of the farm sector. As an unique experiment in providing post harvest support to farmers, the Government have effected radical changes in the implementation of the pledge loan scheme. Loan procedures have been streamlined and the farmers can now obtain finances through the Market Committees at nominal rates of interest without any elaborate documentation. The scheme operates like a cash credit facility, where the credit limit of each farmer is determined on the basis of land holding, the type of crop grown and the nature of the land. Each farmer is provided with a pass book and he is permitted to make as many transactions in a single year as he chooses.

Rural Development

34. The launching of the Employment Assurance Programme has imparted a major thrust to improving the employment situation in the areas. Allocations under Jawahar Rozgar Yojana, intensified JRY, DPAP and IRDP and other rural development programmes have also been stepped up substantially during the current year to match with the increased allocation from Government of India. Next year, notwithstanding the Budget provision of Rs. 113.39 crores, allocation will be suitably increased to match the flow of fund from the Centre as has been done this year. In addition to generating employment, these various programmes will create durable assets like check dams, link roads, and also provide lasting results through soil an water conservation structures.

35. The Government will continue their vigorous program for improving rural water supply. Because of the declining water levels, new pockets of water deficiency are emerging. The 4 water supply projects taken up with assistance from the Netherlands Government, are going to provide relief to 277 villages. Another 2 projects, covering pockets of Nalgonda and Ranga Reddy Districts, are under the consideration of the Netherlands Government for assistance. Government are also negotiating assistance of Rs.14 crores from UNICEF to cover 257 chronically drought affected villages of Ananthapur district under the drinking water program. The Budget for 1994-95 provides an overall allocation of Rs. 43.23 crores for rural water supply program under various schemes such as RWS, ARWS and the Rajiv Gandhi Technology Mission etc.

Housing and House Sites

36. Low cost housing for the rural and urban poor figures prominently on the Government's development agenda. Keeping in view the increased cost of construction, Government has decided to raise the unit cost of house from the present level of Rs. 8000 to Rs. 10,000 starting 1994-95. This will, no doubt, mean additional burden on the exchequer but we have taken this decision out of our conviction that the welfare of the poor is the first charge on the Government's resources. Next year the AP State Housing Corporation plans to complete construction of 2.25 lakh houses, including the ongoing houses. While we are justifiably proud about our leadership role in the Weaker Sections Housing Programme in the entire country, it is a matter for greater satisfaction that we have been able to target the program towards SC, ST and BC communities.

37. Government will pursue the program of provision of house sites more vigorously. The budget provision for this purpose is being stepped up substantially from the current year's level of Rs. 25.35 crores to Rs.35 crores next year.

Education

38. In the area of primary education, increased attention is being given to improving the holding power of primary schools by reducing the drop-out rate by improving the academic curriculum as well as the physical education facilities. The UK assisted Primary School Project has greatly helped in bringing about substantial improvement in this regard. Our sustained efforts have started to yield results by improving the literacy rate among girls. Our future program envisages increasing the number of non-formal education centres and revising the norms of the existing centres for expanded coverage.

39. Education being a major thrust of our effort at promoting the welfare of minorities, private educational institutions of the minorities are being encouraged by relaxing the rules relating to establishment, recognition and regulation of such institution.

Health and Medicare

40. The quantum and reach of the medical and health cover in our State is better than in many other States. This is hardly comforting as we still have many tasks ahead of us in this sector. We need to improve the medical infrastructure to cope with the increasing demands on the system and to extend comprehensive health cover to the entire population.

41. As it happens, I also hold the health portfolio at present. Hon'ble Members would therefore permit me the indulgence of a healthy bias towards the health sectors. What has struck me most during my visits to the districts is the poor quality of the physical infrastructure of our hospitals. In a major effort towards improving this situation, we are making a provision of Rs. 17.50 crores in the Budget for repairs and improvements to the buildings and infrastructure.

42. A project proposal seeking an assistance for the strengthening the secondary level health care systems is under the active consideration of the World Bank. The project seeks to upgrade the existing facilities and increase the access of the poor and undeserved to better quality health coverage.

Minorities Welfare

43. As a part of our continuing commitment to the welfare of minorities, Government have carved out an exclusive department of Minorities Welfare to target attention on the problems and concerns of the minorities. Our endeavour is to integrate the minorities into the mainstream of national life and to create in them a sense of confidence regarding fair and adequate sharing in various avenues of socio-economic development, education, employment etc. Towards this endeavour, the Minorities Finance Corporation is being allotted Rs. 1.20 crores during the next financial year for imparting vocational training and to provide margin money and assistance to identified entrepreneurs. The activities of the Urdu Academy are proposed to be expanded. To improve the employment opportunities of the minorities, the Urdu Academy has also started a computer training facility.

Women Development and Child Welfare

44. In the field of women development and child welfare, the ongoing ICDS projects has made a significant contribution. 25049 Anganwadi Centres are currently functioning in the State under 192 ICDS projects. During 1994-5, 50 new projects are proposed to be started to further expand the coverage of the program. The scheme of maternity assistance for female agricultural labour is being continued and an amount of Rs. 10 crores has been allocated for the year 1994-95.

45. As a further measure towards empowerment of women, 30 percent of all the loans to be given by the various weaker sections finance corporations have been earmarked for women. The ongoing DWACRA program for women, which has recorded notable success in enlisting the participation of women in the development process, will be further expanded.

Communications

46. Better maintenance of the existing road network continues to receive priority in the communications sector. The drive launched 3 years ago to take up improved maintenance of rural roads, State highways and major district roads is being continued with an allocation of Rs.188.7 crores. Investment in the roads sector will be supplemented from the Market Cess Fund. Individual Market Committees will be allowed to spend up to 20 percent of their previous years collections for rural link roads. This will go a long way in facilitating the movement of agricultural produce from the farms to the markets. The inner and intermediate ring roads in Hyderabad City, programmed for completion in1994-95 will ease the congestion of traffic flow. Construction of 6 new road overbridges is slated to start in the next financial year. A major project for improvement of important roads and high-density corridors, at an estimated cost of Rs. 1300 crores, is under consideration of the World Bank. Consultants have already been appointed for preparing the techno-economic feasibility report after discussions with the World Bank. Financial support for a Rs. 120 crores project for improvement of rural roads and replacement of weak and old bridges is under the active consideration of OECF of Japan.

47. In the ports sector, work on the improvement of the Kakinada port with assistance from the Asian Development Bank is in full swing and the improved port is expected to be functional by the end of 1996.

Urban Development

48. Hon'ble Members will surely agree with me that the problems of the urban areas merit our attention and concern. Our first and fore most commitment is provision of portable drinking water, a commitment reflected in the increase in the allocation next year for the urban drinking water program by more than 50 percent to bring it to Rs. 22.27 crores.

49. In a major effort at improving the infrastructure and civic amenities in some of our major towns, the Government plans to approach the World Bank for financing an urban development project. Hyderabad, as the Hon'ble Members are aware, is one of the fastest growing urban agglomerations in the country, which in some ways is an indication of its highly suitable location for sunrise industries and services. In order to fully exploit this potential, we need to improve the quality and quantity of infrastructure in the city. In pursuit of this, a Mega City project with an outlay of Rs. 913 crores had been formulated in consultation with Government of India. The budget makes a provision of Rs. 15 crores for taking up the initial start up activities under the project. We are continuing discussions with the World Bank for financial assistance to the Hyderabad Water Supply Augmentation project for drawing Krishna water to the city.

50. There is a vast scope for improvement in the resources of the Municipalities. Most Municipalities have already completed the process of rationalization of property tax, while the exercises under way if the 3 Municipal Corporation of Hyderabad, Visakhapatnam and Vijayawada. This rationalization exercise, on completion, is estimated to increase the resources by over a third. In order to further strengthen the resource position of the Municipalities the Government have constituted a revolving fund by the name of' A.P. Municipal Fund' with an initial corpus of Rs. One crore. It is expected that this fund would provide the necessary back up for augmenting the borrowing power of the weak Municipalities.

Forestry and Environment

51. Sustainable economic development without eroding the ecological integrity of our environment, is the foremost challenge in the developmental arena today. We have already initiated various environmental measures to improve the quality of our surroundings. A major program for depolluting the Hussain Sagar Lake is under way. Starting this year, emissions by vehicles, a major source of urban pollution, are being monitored to bring down the pollution levels in the cities.

52. In the rural areas, increasing the green cover by large-scale plantation is our major thrust area. In an effort in this direction, we have successfully negotiated assistance of Rs. 353 crores from World Bank to launch what would be one of the largest forestry programmes in the country. Over the next 6 years of the project period plantation will be taken up in reserve forestland, farm lands and Government lands. Towards protecting and improving the forest cover, the concept of joint forest management by enlisting the participation of local villagers adjoining the reserve forest areas has been made an integral part of our forest policy. Through this process of participatory forest management, the local people are being given a share, a stake as well as a responsibility in the benefit and usufruct of the forest.

Handlooms

53. Keeping in view the socio-economic importance of the handloom industry and the need for improving the economic conditions of the handloom weavers, the Government have launched a wide range of developmental programmes targeted at handloom cooperatives as well as individual weavers. Government propose to increase the coverage under the existing Thrift Fund-cum-Savings and Security Scheme and Group Linked Savings-cum-Security Scheme for weavers in the cooperative sector from the existing level of 26000 to 40000. For the first time the scheme has also taken into its fold individual weavers and powerloom workers who are not members of any cooperatives. A new family pension scheme for weavers of the cooperative sector is also on the anvil. The scheme will entitle the members of the family to a pension of an amount of Rs. 250 per month for 10 years in the event of the death of a weaver before the age of 58 years. During 1994-95 an Integrated Handloom Village Development Scheme, at a cost of Rs. 25 lakhs for each village, is going to be taken up in Kurnool and Mahabubnagar districts. Next year's plans further call for establishing New Handloom Development Centres and Quality Dyeing Units to provide the necessary infrastructure and input support to the weavers and financial assistance to 18,000 weavers for supply of looms.

Industries and mining

54. In the emerging scenario under the new economic policy of liberalization and deregulation, we have to aggressively compete with other States for attracting private investment. Our State has several advantages in this regard such as Central location, skill and knowledge intensive workers, competent technical and Scientific manpower and a peaceful labour force, it shall be our Government's endeavour to exploit these positive advantages and to streamline our delivery systems to make industrial enterprise in the State a rewarding and fulfilling proposition. In order to eliminate delays and to provide comprehensive services through a single window, we have a established a Central Documentation Centre providing one stop service to prospective entrepreneurs.

55. The power sector, which remained neglected through the 80's without any fresh investment, is now receiving the much needed impetus. In addition to the massive investments in new power projects in the public sector, Private Sector participation has been enlisted for power sector development. Further increased coal production in the short run and the commitment obtained from Government of India for laying gas pipelines from Bombay High to South India will augment our energy capacity. I can confidently assert that we will be comfortable on the power front within the next couple of years. Our industrial promotion policy has evoked very encouraging response not only from entrepreneurs within the State but also from those from other parts of the country and overseas.

56 . Restructuring of public enterprises is in the forefront of the agenda of the new economic policy. This calls for massive investment; there is also the concern about protecting the workforce in the process of restructuring. It shall be our Government's endeavour to attempt public enterprise reconstructing with sympathy and understanding; in short what we will attempt would be restructuring with a human face. I am happy to inform the House that our initiative at privatising Hyderabad Allwyn is now nearing completion. We propose to take similar steps, in consonance with the directives of the BIFR, in respect of other enterprises as well. We have also requested Government of India to extend the cover of National Renewal Fund to State level public enterprises as well.

Relief and Disaster Management

57. For the second year in succession, the State received low rainfall, during the Kharif season resulting in lowered agricultural activity and production. In order to mitigate the hardship to farmers and agricultural labour, drought relief measures were undertaken in the rural areas at a cost of Rs.49.65 crores. A significant part of this money was spent on improving drinking water supply. Paradoxically we also had to bear the brunt of flash floods during the north east monsoon period in certain pockets of the State and the Government spent Rs. 8 crores towards various relief and rehabilitation measures. As part of a long term effort towards drought proofing our agricultural sector the Government increased investment in measures like afforestation, soil conservation and de-silting operations.

Law and Order

58. Maintenance of law and order is the primary responsibility of any Government; indeed the reason d'etre for the Government itself. Development and welfare would have no meaningful significance in the absence of law and order. Our Government is alive to this responsibility. In recognition of this, we have taken concrete steps to augment the police force as also to modernise it. With some start up assistance from the centre, we have decided to raise 2 battalions of India Reserve Police, with head quarters at Mahbubnagar and Cuddapah. The budget reflects an allocation of Rs.8.13 crores for this purpose. In order to modernise the police force we are providing Rs.21.90 crores for improving the logistic and support systems. It is not enough that we increase the strength or modernise the force. A qualitative improvement in policing is essential and this will come about only when we extend our care and concern to their families as well. Towards this endeavour, we have allocated Rs.4 crores for police housing which is 33.3 percent higher than the allocation this year.

Public Distribution System

59. Our Public Distribution System, which is unique in the entire country in many respects, continues to receive the required financial support in spite of intensely competing demands from other sectors. The Food Corporation of India increased the issue price of rise with effect from February 1994 by Rs. 120 per quintal. Coming on top of an earlier increase of Rs. 60 per quintal in January, 1993 this hike has put heavy pressure on the Exchequer. The Government have decided to absorb the full burden of the increased price and to maintain the sale price unchanged which, you will appreciate, is further evidence of the Government's commitment to this major anti-poverty programme. The Hon'ble Members will please note the substantial expansion in the outlay for this program from Rs. 4 crores in 1982-83 when the program was first started by the present Chief Minister to Rs. 487 crores next year.

60. In our continuing effort to involve women in the development process, our Government have decided to reserve exclusively for women all the existing vacancies of Fair Price shops as well as the 5,000 new Fair Price shops proposed to be set-up during next year.

Employees Welfare

61. It is not sufficient that we come up with innovative developmental schemes or that we provide outlays for them in the budget. Along with these, we also need equally important an effective and motivated administrative apparatus for translating into action the plans and programmes formulated for the people. The Government are, therefore, keen that the morale of the administrative machinery is maintained at a high level. This has been achieved by implementing the recommendations of the Pay Revision Commission, which was appointed in 1992-93 for review of the salary structure in the context of the requests of the employees. When the Service Associations brought to the notice of the Government some of their grievances resulting from the pay revision exercise, they were also redressed expeditiously. I have no doubt that the employees will continue to extend efficient and competent service as in the past to enable the Government to fulfil its commitments to the people.

Accounts 1992-93

62. The final accounts for 1992-1993 show a revenue deficit it of Rs. 123.81 crores. However, taking the overall transactions, the year closed with a surplus of Rs. 11.62 crores.

Revised Estimate 1993-94

63. Transactions as per the revised estimate of 1993-94 indicate a revenue deficit of Rs. 287.10 crores as against the original estimate of revenue deficit of Rs. 234.88 crores. The overall transactions of the year are estimated to result in a net deficit of Rs. 121.17 crores. After taking into account the opening balance of Rs. 11.62 crores, the year end balance is estimated to be Rs. 109.55 crores.

Budget Estimate 1994-95

64. For the financial year 1994-95, the revenue deficit is estimated at Rs. 703.66 crores. However, taking the overall transactions of the year the deficit is estimated to be Rs. 186.90 crores. With the opening balance of (-) Rs. 109.66 crores, the financial year is expected to end with a negative balance of Rs. 296.45 crores taking into account the totality of budgeted transactions for the financial year 1994-95.

65. I am conscious of the uncovered deficit in the budget of 1994-95. As I mentioned earlier, this deficit in the Budget is an inescapable result of the growing socio-economic commitments of the Government. We will bridge the deficit by more efficient tax collection and by exploiting the buoyancy in revenues. Simultaneously we will vigorously pursue the process of reigning in unproductive expenditure.

66. Hon'ble Members are aware of the several initiatives already launched to control expenditure. In the last session of the Assembly, we passed the Andhra Pradesh ( Regulation of Appointments to Public Services and Rationalization of staff pattern and pay structure) Act to prohibit irregular appointments and regulate recruitment in Government and institutions and organisations affiliated to the Government. Orders have also be been issued banning the purchase of new vehicles. Where absolutely necessary, the orders provide for hiring of vehicles, the cost on which is decidedly lower than on purchase and maintenance of owned vehicles. We have issued guidelines to ensure that our public enterprises follow a certain discipline in payment of bonus and ex-gratia and in particular to ensure that they do so only when they have generated surpluses of their own. I assure this House that we will not be found wanting in initiating whatever steps are warranted to bring in discipline and austerity in Government expenditure.

67. With these words, I commend the Budget to the House for approval.

 
JAI HIND
 
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