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GOVERNMENT of ANDHRA PRADESH
FINANCE DEPARTMENT
Previous Budget Speeches

FINANCE MINISTER'S SPEECH 2000 - 01

 
Introduction

Madam Speaker and Honourable Members,

1. It was about four and a half months ago that the Government took a vote-on-account budget to enable the Government to improve the management of its expenditure, specifically with the assistance of Zero Based Budgeting. Many of you had doubts; and some of you were disinterested about the Government’s decision to resurrect the tool of Zero Based Budgeting. Despite the skepticism, I may be permitted a small smile of satisfaction. While thanking all the members for the confidence reposed in me, I now present the full budget for the year 2000-01 of the Government of Andhra Pradesh.

2. Immediately after the vote-on-account budget was passed, the Government constituted a Cabinet Sub Committee to supervise and guide the ZBB exercise. Departmental Committees headed by the respective Ministers were also formed to assist the Cabinet Sub Committee. The past four months have been a very hectic period for us. Hitherto, there was a vague and undefined feeling that the Government seemed to have two wings: the Finance Department and the rest of the Government. There was a strong wall of mutual mistrust between these two, with each trying to fault the other. The zero based budgeting exercise has succeeded in breaking this Berlin Wall and this budget has been prepared together by all. The Cabinet Sub-committee had extensive, exhaustive and elaborate deliberations with the Ministers, Secretaries and Heads of Departments on the various details of the budget. Each and every item was discussed thread bare, from mundane items like pending TA bills and arrears of rent to sophisticated issues like computerization of departments and on-line transfer of information.

3. To most in the Government, except for a few in the Finance Department, the budget was always a mystery inside an enigma wrapped in a puzzle. Today we have solved the puzzle, unraveled the enigma and demystified the budget. There has been perfect transparency and probably for the first time, the departments have actually prepared the budget themselves.

4. In my last speech I had mentioned that the Government was concerned about not how much amount was spent by each department but more on how this amount was spent and the impact the expenditure brought in improving the quality of life of the people of our State. Therefore, it is not enough if the numbers in the budget are finally tallied and balanced. A balancing exercise may be good for an acrobat or an accounts problem. The shareholders and real owners of the Government are the 7.5 crore people of Andhra Pradesh. Under the able leadership of our Hon’ble CM, we will ensure that not only will our books balance but also that every rupee spent from this budget goes towards the benefit and welfare of the shareholder people and also stimulate the long-term growth and sustainability of the State.

5. After extensive consultation with the stake holders at various levels, Sectoral Action Plans have been prepared by each Department to achieve the goals set in Vision 2020 over the next 5 years. During the current year schemes and programs implemented by all the Departments have been critically reviewed, examined and prioritized. Parameters and indices have been identified, in consultation with all the Departments for achieving the growth targets relating to all the three sectors of the economy. The main focus would be on the 19 growth engines identified under Vision 2020 as these contribute about 65% to the Gross State Domestic Product of the State. Similarly, parameters have been identified for achieving the targets under social and human development focusing on the basic minimum needs to be provided to the common man, particularly in the education and health sectors.

6. Targets have been fixed from the state and district level right down to the mandal and panchayat levels under each parameter, duly fixing the responsibility at each level for achieving the targets. Flow of funds will be ensured through the budget both under Plan and Non-Plan under different schemes and programmes of the Government but will be linked strongly to achieving the physical targets. Government will have a performance evaluation system through which the performance at each level in achieving the above targets will be constantly monitored and regular follow up action will be taken. A State level evaluation committee has been constituted to evaluate various schemes and programmes and also to identify the parameters to undertake performance appraisal of the Government functionaries at various levels. Necessary training programmes will be conducted for the employees at various levels responsible for achieving the above targets from time to time on managing the resources allocated optimally and adopting innovative methods for achieving the physical targets.

7. Government have constituted an Economic Advisory Council consisting of eminent Economists and Experts to advise the State Government on resource mobilization and expenditure management from time to time. The Economic Advisory Council has been deliberating on the various issues and necessary further action will be taken by the Government on the recommendations of the council.

8. Government have also constituted a Cabinet Sub Committee on Assets Management to identify all performing and non-performing assets of the Government for putting them to optimal use. A computerized data base is being created so that Government could find out ways and means for optimally using these assets for productive purpose and make use of them for additional resource mobilization.

9. Based on the elaborate exercise of zero based budgeting done for the current year, the Government could contain the growth rate of non plan expenditure to around 18.9% as against 25.7% during 1999-2000 and against an average growth rate of 19.1% for the past four years ending with 1999-2000. This could be achieved despite the fact that we had to accommodate the pending commitments of the previous years including the spill over expenditure of PRC. When it comes to the composition of non-plan expenditure, the salary component has risen at an average growth rate of 12.23% for the years 1995-96 to 1998-99. The salary expenditure grew by 28.68% in 1999-2000 mainly on account of the implementation of PRC. However, during the current year the rate of increase in the salary expenditure has been estimated at 18.37% as compared to the average rate of increase of 12.23% for the years 1995-96 to 1998-1999. This increase is due to catering for release of arrears for UGC scales to College and University Teachers, arrears of two DA installments for the last year and spillover of Pay Revision arrears. This is also on account of additional recruitments during last year for filling SC/ST vacancies as well as in essential services like Health, Education and Anti-extremist activities.

10. Non-plan expenditure excluding salaries and pensions has grown at an average rate of 23.4% for the years 1996-97 to 1999-2000. After the Zero Based Budgeting for the current year this has been estimated to rise by 21.7% as against an increase of 22.6% in 1999-2000.

11. The Government is fully committed to keep this rate contained at the level budgeted at the beginning of the year. This is sought to be achieved through strict expenditure ceilings which are firmly fixed in consultation with all the departments and the government would endeavour to see that they are enforced throughout the year. The Government intends to adhere to the aggregate level of expenditure indicated in the budget through policies and instruments that enable the Government to maintain fiscal discipline year after year.

Medium term fiscal framework

12. The current year’s budget is being presented against the backdrop of institutional and financial restructuring of the power sector which has a bearing on the public finances of the state over the medium term. The government is committed to carry the exercise of Zero Based Budgeting further for bringing fiscal stabilization through systematic reduction of revenue deficit and fiscal deficit over the next few years. Towards this end, we would also prepare a comprehensive Medium Term Fiscal Framework which would be used as a benchmark for preparing future budgets.

13. We are concerned not only about containing the expenditure at reasonable levels but also of the economy and efficiency in the utilisation of the expenditure. For this we are fixing a time frame to rectify a number of audit years in arrears duly fixing the responsibility on the concerned officials in Government offices and other institutions. Government is also contemplating a comprehensive law to be brought in for this purpose.

Eleventh Finance Commission

14. While we were struggling with our exercise on zero based budgeting the Eleventh Finance Commission (EFC) was deliberating on the formula for devolving Central resources to the States. The report of the EFC came as a bolt from the blue. The final recommendations of the Eleventh Finance Commission have grave implications for the resource transfers to our State. The EFC’s recommendation on inter-se distribution among States of devolution and grants to revenue deficit States and has resulted in rewarding the fiscally imprudent states at the cost of performing and reforming states.

15. In overall financial terms, the total transfer of resources from Centre to all the States for the five-year period covering 2000-05 would be Rs.4,34,905 crs which includes Rs.3,76,318 crs for tax devolution and Rs.58,587 crs towards various grants and relief expenditure provisions. Out of these total transfers, the share of AP will be Rs.31,011 crs (about 7.13%). There is a reduction from the Tenth Finance Commission recommended share of 7.98%. This will mean that our State will lose Rs.3,685 crores over a period of five years of which our loss for 2000-2001 will be of the order of Rs.951 crores.

16. In fact, we estimated the resource transfers from the centre for the current year based on the assumption that the tax devolution and revenue deficit grants under Article 275(1) would be at least close to the level of percentage we received under the Tenth Finance Commission. Now, with the acceptance of recommendations of the EFC by the Union Government, there is going to be a shortfall of Rs. 736 crores in our revenue receipts indicated in the budget for the year 2000-2001.

17. EFC further recommended that the total transfer of resources from the Centre to the States of both taxes and other grants should have an upper limit of 37.5% of the gross receipts of the Centre. There was no such prescribed ceiling in the recommendations of the previous Finance Commissions. This ceiling of 37.5% of gross central revenue receipts will adversely affect the States each year for the next five years.. Further when such a ceiling is implemented prospectively, along with the implementation of stipulated percentages of tax devolution, the scope for plan assistance will get severely reduced. The unilateral acceptance of this suggestion of EFC by the Union Government appears unfortunate and needs to be reviewed immediately. On the whole EFC appears to have favoured the Union government at the expense of the just needs of the states. EFC has also sought to reward the non-performing states with a bonanza. Reforming and performing states have been put to a discount. Not only have they lost out on their just share of the central revenues but the prescriptions on borrowing limits and debt relief will further erode their resource flexibility.

18. We have decided to take up the issue with the central Government. We are also opposing in principle the ceiling of 37.5% on revenue account since it would affect the interest of our state adversely. We are requesting the centre to convene the Inter- State Council meeting to discuss all the major recommendations of the EFC which have serious implications on the financial position of the state. We are also requesting the centre to create a separate fund to cater to the just needs for financing infrastructure development of the reforming states that contribute more to GDP and tax efforts. This would serve as an incentive for the performing states to do better and increase their overall contribution to the Nation’s GDP. We would also request the Union Government for extending more debt relief in the form of partial write off of loan component of plan assistance as well as rescheduling of central loans.

Gross State Domestic Product (GSDP)

19. The Advance Estimate of Gross State Domestic Product for the year, 1999-2000 at Constant Prices (1993-94) was presented in the Economic Survey 1999-2000. These advance estimates have been updated with the latest data available in different sectors of the economy. As per the updated estimates, the GSDP at Constant Prices for the year 1999-2000 is estimated at Rs.79,492 crores as against the Quick Estimates of Rs.75,530 crores for the year 1998-99 registering a growth rate of 5.25 per cent. (As per the advance estimates, the growth rate was 4.95 per cent). The Primary Sector has shown a negative growth rate of 2.95 per cent, due to the decline in agricultural production because of adverse seasonal conditions. The tertiary sector registered a healthy growth rate of 9.49 per cent followed by secondary sector with 7.9 per cent.

Per Capita Income

20. The Per Capita Income at Constant (1993-94) Prices for the year 1999-2000 is estimated at Rs.9469/- as against Rs.9118/- in 1998-99 (Quick Estimate) showing an increase of 3.85 per cent.

Seasonal Conditions

21. The state had an early onset of south-west monsoon. There were widespread rains throughout the state. State as a whole has received so far an average rainfall of 346.4 mm. as against the normal rainfall of 306 mm. On the whole the seasonal conditions are favourable.

22. After the long spell of drought, state faced the flash floods in the Godavari river, flooding at Bhadrachalam and a few villages of East and West Godavari Districts during the month of July, 2000. The State Government acted promptly and evacuated the people in affected villages to safer places and opened relief camps.

23. Our dream of Andhra Pradesh as "Swarna Andhra Pradesh" has always been with a focus on common man where everybody has an access to basic minimum needs and opportunities to lead a happy and fulfilling life. With this objective in mind we have taken several initiatives and our budget is a reflection of our thoughts and priorities, where we have tried to strike a balance between welfare and development. We have ensured that all our priority sectors like Social, developmental, infrastructure, welfare and technology get the due share in the budget. We have also made efforts to ensure a balanced development with special thrust on the backward areas.

Annual Plan

24. The Annual Plan for the year 2000-2001 has been programmed with an outlay of Rs.8228.12 crores as against Rs.5479.50 crores for 1999-2000 which amounts to an increase of 50.16 percent, whereas the increase in the plan outlay for the year 1999-2000 was 17.11% over the plan outlay of Rs.4678.95 crores during 1998-1999. Out of total plan outlay of Rs. 8228.12 crores, Rs.1433.93 crores has been provided for the Irrigation Sector and Rs.2606.20 crores has been provided for the Energy Sector. The outlay for the Social Sectors have been substantially stepped up with Rs.131.62 crores for Education, Rs.353.37 crores for Medical and Health, Rs.126.36 crores for Water Supply and Sanitation and Rs.137.95 crores for Housing.

Agriculture

25. With the improvement in seasonal conditions, the State Government is poised to achieve a growth of 25% in foodgrains production (165 lakh tonnes) during 2000-01 over the last year. To achieve this level of production, the State has formulated farming situation-wise strategies to increase the productivity per hectare of all crops, particularly of foodgrains. Special emphasis is being laid on increase of area under pulses, particularly, redgram. Similarly, special efforts are being made to increase the area under castor & maize and reduce areas under tobacco, cotton and chillies by diverting the same to foodgrain and oilseed crops. Use of pesticides is being discouraged by promoting Integrated Pest Management practices.

26. The varied and favourable agro climatic conditions of our state have endowed us with a vast potential for the development of horticultural crops. Major thrust is being given for fruit crops, oil palm, floriculture and spices development by adopting modern technologies with special stress on drip irrigation.

27. The Wholesale Price Index for Agricultural Commodities, with 1981-82 as the Base Year, has shown an increase of 3.35 per cent and 2.40 per cent in Andhra Pradesh and All-India respectively during the years 1999-2000 when compared with the previous year. These increases reflect that the farmers in Andhra Pradesh got more remunerative prices for Agricultural Commodities when compared to their counterparts in the rest of the country.

Cooperation

28. Government support for co-operatives in terms of financial assistance and policy will continue to enable them to become self-reliant. The ICDP Programme in selected districts will continue to be implemented during this year. Government would also like to have elections conducted in the co-operatives as early as possible.

Animal Husbandry

29. Animal Husbandry is an important occupation in the rural areas, providing additional income to the small and marginal farmers. Andhra Pradesh occupies the first position in poultry industry and the 2nd position in buffalo and sheep population in the country.

30. Under the restructuring of breeding operations, the Andhra Pradesh Livestock Development Agency has been formed. The required equipment has been procured for starting 6l6 Private Artificial Insemination Centres. 207 Departmental Stationary artificial insemination centres have been converted into mobile units. 503 Gopala Mitras have been given refresher training and they are deployed for doorstep delivery of artificial insemination. Free Veterinary Camps were organised during Janmabhoomi.

Fisheries

31. Fisheries sector was identified as one of the 6 growth engines in Agriculture Sector. The State has bountiful natural resources of Inland, Marine and Brackish Water sectors. The total fish/prawn production has increased from 4.56 lakh tonnes in 1998-99 to 5.78 lakh tonnes in 1999-2000, a growth of 26.8%. It is proposed to enhance it further to 6.20 lakh tonnes during 2000-2001.

Industries

32. The general index of Industrial Production in the State for the year, 1999-2000 (April-March) registered a growth rate of 6.9 per cent when compared with previous year. The Electricity Sector registered a maximum growth rate of 9.8 per cent followed by Mining & Quarrying with 8.1 per cent and Manufacturing with 6.4 per cent.

33. In order to attract new investments to the State, 7 thrust sectors have been identified keeping in view of the goals set in Vision 2020.

- Agro-Food Processing and Bio Technology

- Automobile and Auto Components

- Bulk Drug and Pharmaceuticals

- Apparel Textile and Leather

- Finance and Insurance

- Mining and Minerals

- Electronics hardware and Telecom.

34. To identify and attract potential national and international investors in the above sectors six reputed Consultants have been appointed. These consultants will guide the investors and maintain liaison with the Government.

35. To encourage Small Scale Industries a "Critical Infrastructure Balancing" scheme has been introduced during the year to benefit Industrial Estates and Small Industries Clusters identified under the SSI Cluster Development Programme. To promote Women Entrepreneurs, the Government have allotted 20 acres of land in favour of Association of Lady Entrepreneurs of Andhra Pradesh.

36. A Knowledge Park, promoted by ICICI, a Bio-Technology Park in 180 acres at Turkapalli village, Rangareddy District will give a boost to technology-driven domestic and overseas firms engaged in the manufacture of innovative Bio-Technology products and process. An Apparel Export Promotion Park at Gundalapochampalli in an extent of 175 acres will give fillip to the Textile Sector of Andhra Pradesh.

Mining

37. The Mining Sector is poised for intensified development with special focus on the exploration and exploitation of gold, diamond, beach sand, limestone, granite etc. The investment in these areas is expected to result in increased value addition, employment generation and increased revenues. Simplification of procedures, time bound disposal of applications for mining leases, conduct of ‘Mining Sadassalus’ and introduction of Mining Pass Book are some of the initiatives taken by the Government for the development of the mining sector.

Sugar

38. The sugar industry in 1999-2000 registered a significant growth in crane crushing and sugar production. Crushing was 117.80 lakh tonnes with sugar production reaching an all time high of 11.80 lakh tonnes at an average recovery of 10.03% in the State. The Co-operative sector has registered a record increase in recovery from 8.70% in 97-98 to 9.73% in 1999-2000. Government have converted into equity Rs.108 crores in the Co-operative sector and have supported remunerative cane price to farmers through the State Advised Cane Price throughout the State. After a gap of 14 years Government have conducted elections in the Co-operative sugar factories.

Handlooms

39. Considerable importance is being given to the welfare of weavers as well as the Handlooms industry by taking up various schemes like workshed cum Housing scheme for the weavers, project package scheme, thrift fund and insurance scheme, MDA, infrastructure support to Hyderabad and Nagari Textiles Park, Apparel Parks etc.

Welfare

40. The Government is committed to the development of the weaker sections of society, particularly the Scheduled Castes, the Scheduled Tribes and the Backward Castes. To this end, we have undertaken a massive human resource development effort to bring about a paradigm shift in the quality of life of the deprived. Last year, the Government raised the scholarship and mess charges for all these students by 25%. Our scholarship and diet charges are the highest in the country. Despite the strain on the budget we have ensured that the outlays for the Scheduled Castes, Scheduled Tribes and the Backward Castes have been fully protected at the higher scales of entitlement.

41. Government have also issued orders that all vacant backlog posts of SC and ST be filled up. The Government is keen to improve the standards of education of the weaker sections. Computer education in residential schools has been introduced with a view to improving the employment opportunities for SC boys and girls. 500 additional seats have been sanctioned under the "Bright Student" scheme during the year 1999-2000. Dalit children are being given intensive coaching for a period of two months during the summer under the program "Back to School". The AP Social Welfare Residential Educational School Society has introduced the project for computer literacy for the classes from 6th to 9th and Intermediate 1st year in the schools located at district Headquarters. The Government has also sanctioned 17 Long Term Bridge Course Schools under Mundadugu Programme @ one in each district except DPIP Districts. The Andhra Pradesh Scheduled Caste Cooperative Finance Corporation Limited, which is the best S.C. Development Corporation of the country, is providing high quality computer education in the best computer institutes to educated unemployed youth.

42. Government has started a comprehensive programme "CHAITANYAM" for economic upliftment of the S.T. families. 5,500 DWCRA groups are being formed and 8,500 Village Tribal Development Associations have been formed to execute the works in the villages by completely eliminating the middlemen. Government is establishing 256 School complexes at a cost of Rs.30 crores to train the teaching manpower and improve the quality of education in tribal areas. During the year Government has sanctioned 7 new residential schools and 50 ashram schools to improve the literacy levels in the tribal areas.

43. A special programme called ‘SWARNIMA’ has been launched for the benefit of Backward Classes Women with financial assistance from NBCFDC. Education Loan scheme is also being formulated with the assistance of NBCFDC to assist BC Students to pursue higher studies. The "ADARANA" scheme will be continued by streamlining its implementation.

44. Government have sanctioned 6 new Residential Schools and two Residential schools exclusively for children of Fishermen at Amalapuram in East Godavari District and Satyaveedu in Chittoor District.

45. The Government is also active on women development and child welfare front. We have constructed 1768 Anganwadi Centres and formed 50,445 Mothers’ Committees during the year 1999-2000. 35 new ICDS projects with World Bank Assistance under APERP will be grounded during this year. The Government is contemplating to enact a Compulsory Registration of Marriages legislation and to teach "Legal Literacy" to the women of the State.

46. The Government has released two Policy Documents to reiterate its commitment to better the lives of the disabled. These policy statements were on the Empowerment of Persons with Disabilities (Cheyutha 1998-2000) and the State Action Plan for persons with Disabilities.

47. Government is giving special attention to the welfare of the minorities and implementing various schemes for their socio-economic, educational, and cultural development. Special efforts are also being made for the promotion and development of Urdu language. Under the community development scheme, Government. have sanctioned 304 Urdu Ghar – cum Shadikhanas for the benefit of minority population apart from a Haj house to provide facilities to the Haj pilgrims. The A.P.State Minorities Commission has come up as a big umbrella for the protection of minorities by redressing their various grievances.

Youth Advancement

48. Based on the experience of CMEY, Yuvashakthi, a sustainable movement of the youth, has been launched in May 2000 throughout the State. Under this program financial support will be provided to the youth groups for self-employment. It is estimated that 20,000 youth associations will benefit, resulting in employment generation to three lakh youth during this financial year. The youth development programmes also include promotion of sports and cultural talents among the youth, participation in Janmabhoomi, literacy, family welfare and other mass mobilisation programmes designed for the benefit of the youth in particular and for the society in general.

Public Distribution system

49. Easy access to food at affordable price is one of the highest priorities of our Government. The Public Distribution System, besides providing food security to the poorer sections of the society, also acts as an anti-inflationary and price stabilisation instrument. The budget allocation under rice subsidy is Rs.1002 crores. Members will appreciate the fact that the Government reduced the price of PDS rice from Rs.5.50 per KG to Rs.5.25 per KG as soon as the Government of India lowered their issue price.

50. The percentage increase of Consumer Price Index under Agricultural Labourers is 2.95 for Andhra Pradesh as against 4.44 of All India. It is 3.15 and 4.75 for Urban Non-Manual Employees for Andhra Pradesh and All India respectively and under the Industrial Workers category it is 3.30 and 3.38 for Andhra Pradesh and All India respectively.

51. The Consumer Price Indices during the year 1999-2000 reflect that the Prices of Consumer Goods are more stable in the State when compared with All India. This is due to the initiatives taken by the State Government in supplying the most essential commodities viz., Rice, Redgramdal, Tamarind, Onions, Red Chillies and Groundnut Oil at competitive prices through market interventions and making available the essential vegetables at competitive prices by establishing Rythu Bazaars all over the State.

Deepam Scheme

52. We are the pioneering State in the distribution of LPG connections to women, both in urban and rural areas, under the Deepam Scheme. The scheme has not only removed the drudgery faced by the women in the kitchen but also has helped to improve the health status, reduce dependence on forest for fire wood and thus contribute to the general improvement of the environment of the State.

53. We have given so far around 5.52 lakh L.P.G. connections against the target of 10 lakh connections in rural areas, and around 1.47 lakhs connections have been given against the target of 5 lakh connections in urban areas. It has also been decided to release 50,000 L.P.G. connections to the Members of Vanasamrakshana Samithies. The budgetary allocation for the Scheme is Rs.......... .

Housing

54. For the current year 2000-01, the Government have sanctioned programme to construct 5 lakh houses for the benefit of rural poor involving a total project outlay of Rs.874.80 crores. Also, for the urban poor 20,000 houses will be constructed at a cost of Rs.50 crores. In addition to necessary provisions under IAY Programme, a new programme called Pradhan Mantri Grameena Yojana (PMGY) has also been proposed for implementation in the State. About Rs.21.30 crores has been allocated for this under plan budget for the current year. This is included in allocation of Rs.124.18 crores under Plan for the current year. The Government have also provided an amount of Rs.339.54 crores under non-plan budget for housing programme.

55. The Hon’ble Members will be happy to note that the Housing Corporation which is the implementing agency for the programme has received outstanding performance award from Housing and Urban Development Corporation (HUDCO) for the third year 1999-2000 in succession

Human Resource Development

56. The East Asian experience as well as the global experience proved beyond doubt the importance of HRD for economic development. The levels of HRD expenditure in most of the states are very low. Keeping this in view, our government has focused on improving the quality of human resources through encouraging investments particularly in the area of health and education. In fact, we sought a weightage of 15% to expenditure on HRD in our memorandum to the EFC. But it is very unfortunate that the EFC has not assigned any weightage to HRD. Anyhow, our government is fully committed to accord highest priority to HRD with specific aim at improvement in Health and Education sector.

Education

57. According to the Vision 2020 document a major objective to be achieved by 2005 is literacy rate of 95% in the State. In addition it is proposed to achieve universal enrollment and retention at the primary level in the same period. Viewed against a background of the 1991 census figure of 44% literacy and nearly 50% drop out rate at the primary level, these targets represent a major challenge which can be countered only by adopting an integrated and a highly focussed approach. At present a large number of initiatives are underway in the Department of School Education as well as in the other related departments of Adult Education, Women and Child Welfare, Social Welfare, Health, Medical and Family Welfare and Labour to promote not only literacy and primary education but also protection of rights of the children.

58. With a view to achieve the objectives set for itself in the Vision 2020 document and for enabling greater coordination between the various programs that are aimed at achieving these objectives, the government proposes to set up the "State Total Literacy Mission". The Mission will comprise prominent Activists, Academicians and other citizens who have contributed significantly to the cause of literacy and education not only in the state of Andhra Pradesh but elsewhere as well. The Mission will draw up a detailed plan of action for achieving the Vision 2020 goals within a well-defined time frame. In doing so the Mission will draw upon the best practices in this sector and take advantage of the enormous potential of the self-help group movement in the state. The Mission shall also be entrusted with the task of setting up of a monitoring mechanism, which will ensure the implementation of the plan with the proposed time period.

59. As a preparatory to the setting up of Literacy Mission, State Government has launched "Chaduvukundam" a major drive between 17th July to 23rd July, 2000 with the objective of promoting the norm that "the right place for the child is the school". During the course of the drive, an effort was made to not only enroll all children in the age group of 5-7 years but also to ensure retention of all the children already in the school.

60. The Government have been taking several steps for expanding the primary school facilities to all school age children in the State to achieve the national goal of Universalisation of Primary Education. To ensure that every child has an access to a school within one kilometer radius, the Government have introduced a programme wherein 15000 MAABADIS (Community Schools) are being opened in school-less habitations. This is a great boon for communities in remote and tribal areas.

61. In order to provide minimum basic facilities to schools such as construction of school buildings providing accommodation, furniture, Lab and Library equipment etc., certain schemes have been brought under the Basic Minimum Services Programme on top priority basis.

62. Mere provision of facilities and infrastructure will not tone up the school performance unless adequate trained teachers are provided in the schools. Hence the Government of Andhra Pradesh have appointed 29253, teachers during the recent past. During the year 2000, notification has been issued to fill up 25746, teachers’ vacancies with qualified trained teachers. Further, in-service orientation training programmes are being conducted by the S.C.E.R.T. & D.I.E.Ts. to update the teachers with recent trends and the existing syllabus etc.

63. Large number of Engineering Colleges have been established in all parts of the state including Backward Areas. 46 places have been identified to setup new engineering colleges in the private sector.

Health

64. Government has initiated a number of measures to cope with the increasing demands on the health system and to expand comprehensive and quality health care to the people of the State. Special attention is being paid to extend quality health care to the rural areas so that the poor have access to health services at their doorsteps.

65. Government is investing Rs.322 crores under the APERP to ensure that every Primary Health Centre has its own building and that all the centres are manned with the required staff and supported with adequate equipment, drugs and supplies. Our Government has paid special attention to the needs of tribal areas. Under the APERP, in order to improve the delivery of health care among the tribal population, 8,500 community health workers have been identified, trained and positioned in every habitation.

66. In the secondary sector, the APFRHSP is being implemented with World Bank assistance at a cost of Rs.608 crores. 3,500 additional beds have been added to the existing bed strength of 9960 in the secondary sector.

67. During the year 1999-2000, we have sanctioned 44 additional units to improve the tertiary level care in hospitals and medical education in colleges, resulting in the creation of 327 additional posts with an additional investment of Rs.5.10 crores per annum. We have sanctioned a new medical college in the Government sector at Ananthapur. We have issued 6 essentiality certificates to Medical Colleges and 7 Dental Colleges based upon the recommendations of the Justice Maruthi Committee. Seven additional locations are notified for establishment of Medical Colleges and 11 for Dental Colleges.

68. The Revised National TB Control Programme which is currently under the implementation in Medak and Hyderabad districts is being extended to cover all the districts in the State at an estimated cost of Rs.100 crores.

69. The increasing incidence of HIV in the State is a matter of great concern to the State Govt. A massive prevention and control initiative is being implemented through the second phase of the World Bank Aided AIDS Control Project at total cost of Rs.187 crores. We have already mapped 348 high-risk areas in the State, where specific targeted interventions will commence shortly. We are also setting up voluntary blood testing and counseling centers in all our teaching and specialty hospitals and district hospitals in the State. It is with this objective that we have constituted Hospital Development Societies for the Teaching Hospitals and Advisory Committees for all the secondary level hospitals and PHCs. These Committees have been given the powers of raising resources and the authority to use these resources for the benefit of the institutions. To motivate community participation, health and Family Welfare have been made central to the Janmabhoomi Programme.

70. Government gives the highest priority to the Family Welfare Programme. During the current year, we have achieved a coverage of 7.9 lakhs eligible couples with permanent contraceptive methods. We have also been pioneers in implementing an insurance scheme "AROGYA RAKSHA" for eligible couples below the poverty line who adopt family planning after one or two children. It is gratifying to note that the scheme has been adopted by the Central Government in its National Population Policy. We have also instituted "SUKHIBHAVA" a scheme to increase institutional deliveries to safeguard the health and life of the mother and child. We have also negotiated sanction for an additional allocation of Rs.47.74 crores out of the savings of IPP-VIII for establishment of Urban Health Posts in 73 Municipalities in the State for delivery of health and family welfare services in the urban slums. This project will be implemented during the current year.

71. Our investments in the health and family welfare sectors have been substantially increased in keeping with the priority government accords to this sector. This has been done by adding infrastructure and ensuring delivery of health services in the rural areas and the urban slums.

Janmabhoomi

72. Thirteen rounds of Janmabhoomi have been held in the state so far since 1997 as a people centered development process aimed at empowering people for their participation in development as stake holders, providing good governance through accountability, transparency and responsiveness and eradicating poverty through participatory social and human development. I am happy to inform the Hon’ble Members that the Mahila Janmabhoomi was successfully implemented from 1st to 7th August, 2000 in the State with the active participation of women in large number, self help group members, officials and non-officials.

Clean & Green

73. Every third Saturday of the month has been declared as Clean and Green Day. The Campaign is focussing on safe drinking water, sanitation, tree plantation, pollution control and health awareness. I am happy to inform the Honourable Members that the campaign has been implemented very successfully 22 times so far with the active participation of students, self help group members, non-governmental organizations, industries and local bodies in the state.

Rural Development

74. The launching of the poverty eradication programme called "Velugu" by the Hon’ble Chief Minister on 16.5.2000 at Utnoor in Adilabad district marked the formal implementation of Andhra Pradesh District Poverty Initiatives Project funded by World Bank at a cost of Rs.584.60 crores. This project will be implemented in 180 Mandals of 6 most-backward districts of Srikakulam, Vizianagaram, Adilabad, Mahabubnagar, Anantapur and Chittoor, and it would benefit 6.20 lakh families.

Neeru-Meeru

75. Hon’ble members are aware that our state has been reeling under various drought spells in the recent past. In order to tackle the drought problem permanently and to improve the water quantity and quality, our government has launched the Water Conservation Mission on the eve of 12th round of Janmabhoomi on 30th April, 2000. The 12th round of Janmabhoomi was designated as "Neeru-Meeru" to drive home the message of importance of water conservation and its judicious utilization. The aims and objectives of "Neeru-Meeru" are awareness of sustainable use of available water, water conservation measures on large scale in forest and agricultural areas, natural storage system to ensure maximum percolation of water and to increase the percolation of rainwater from 14.62 % to 21.30 %. This programme of "Neeru-Meeru" has been very enthusiastically taken up and it is being vigorously implemented to ensure optimum achievement. Under this programme the soil and moisture conservation works like check dams, contour trenches, rock-fill dams and percolation tanks have been grounded in the forest areas which will help in improving the vegetation as well as recharging of the ground water. So far a total volume of 627.42 lakh cubic meters of water conservation works were grounded with a total expenditure of Rs.150 crores. Around 1.32 lakh hectares of continuous contour trenches have been completed against the target of 1.87 lakh hectares and also around 225.15 lakh cubic meters of desilting works have been completed.

76. Government also intend to bring about a comprehensive legislation to cover Ground Water Creation, Water Preservation and Water Conservation. Wide-ranging consultations at State and District levels have already been held on this subject.

77. The Government’s strategy for tackling rural poverty rests on the twin pillars of organizing women self-help groups and watershed development. Both these programmes have continued to receive strong support and have begun to yield good results. There are today 3.34 lakh women self-help groups with a membership of almost 48 lakh women from poor families. All habitations in the State have been covered with at least one women self-help group. The State Government proposes to cover at least one woman member from every below poverty level family in the next two to three years and all rural poor women in the next four to five years. A remarkable feature of the success of the women self-help groups in Andhra Pradesh is that the commercial banks are now willingly coming forward to finance these groups. During 1999-2000, a total number of 43,137 groups were given bank loans of about Rs.81 crores which is almost fifty percent of the achievement for the whole country. During the current year, it is expected that the commercial banks will extend loans to 75,000 groups for a total of Rs.150 crores.

78. Under the watershed development programme, 5260 watersheds including 896 watersheds sanctioned in the last financial year covering an area of 26.30 lakh hectares is being treated with a total outlay of Rs.1052 crores. An Action Plan worth Rs.150 crores is also being taken up during the current year.

79. DFID, United Kingdom have sanctioned AP Rural Livelihood Project at a cost of Rs.320 crores which will cover 5 districts of Anantapur, Kurnool, Mahabubnagar, Nalgonda and Prakasam. The goal of the project is to develop effective and sustainable approaches to eliminate poverty in drought-prone areas of Andhra Pradesh.

80. Government is committed to democratic decentralisation and empowering Panchayat Raj Institutions. Apart from providing adequate resources to them, Government is also committed to hold elections to Panchayat Raj Bodies at the earliest to ensure that peoples organisations at the grassroot level are fully involved in the development process.

Urban Development

81. The primary responsibilities of the Urban Local bodies are to providing a clean and hygienic environment, water supply, drains and other basic amenities to its citizens. With an objective to have 100% sanitation, Integrated Low Cost Sanitation scheme has been taken up in all the 113 Municipalities. Construction of 5.71 lakhs new latrines with an allocation of Rs.118 crores is under progress. Comprehensive Water Supply Scheme for 78 Municipalities under plan schemes with HUDCO assistance and schemes with 10th Finance Commission grants are under various stages of completion. Conservation of the natural environment is a pre-requisite for healthy city life. During this rainy season, massive tree plantation programme has been taken up. Hyderabad Urban Development Authority (HUDA) has planted more than 10 lakh trees. Municipal Corporation of Hyderabad (MCH) has planted about 1.3 lakhs ornamental and avenue trees on the roads. In other Municipalities, about 18 lakh trees have been planted. HUDA and MCH have taken up large number of Water Harvesting Structures. Hyderabad Metropolitan Water Supply and Sewerage Board (HMWSSB) is providing technical assistance to the individual household for construction of Water Harvesting Structures.

82. Department for International Development, Government of U.K. has approved A.P.U.S.P. Project with an outlay of around Rs.745.00 crores. The unique feature of the project the entire funding as 100% grant to the State Government. The project will be implemented in 32 Class I Municipalities having more than one lakh population over a period of 7 years. Nearly 18 million slum dwellers are expected to benefit. The project aims at sustainable reduction in vulnerability and poverty of the urban poor. The project has 3 components of municipal reforms, infrastructure provision and strengthening of civil societies. Under municipal reform, a range of activities to improve the performance of the Municipalities in the areas of planning, finance and management will be undertaken. Capacity building is the focus area in this component with an outlay of Rs.120 crores. Under infrastructure provision, water supply, sanitation, solid waste management, drainage, street lighting, roads, footpaths will be provided in slum areas with an investment of Rs.525 crores. Under the third component, the Community Based Organizations will be strengthened. With involvement of the community, town-level social projects relating to health, education, income generation and thrift will be taken up, with an outlay of about Rs.100 crores.

83. Improving water supply and sanitation in the capital city is an important commitment before the government. All the avenues are being explored to mobilise additional resources to augment the existing infrastructure and services.

Infrastructure Development

84. With a view to achieve rapid industrialization, balanced development and improved quality of life, Government of Andhra Pradesh has decided to provide infrastructure facilities of higher quality on larger scale through various mega infrastructure projects by inviting private sector participation. We want to create a strong backbone of trunk and arterial infrastructure around major economic centres and along the growth corridors. Government has identified 31 important infrastructure development projects with private participation and set up a mechanism for their fast track clearance.

Roads

85. The total length of State Roads is 61,745 KMs comprising of 8646 KMs. of State Highways, 35176 KMs of Major Roads and 17883 KMs. of roads taken over recently from Panchayat Raj Department. During 1999-2000, 5410 KMs. of roads have been re-carpeted with Bitumen Mix. It is programmed to re-carpet 5,000 KMs. of roads during 2000-2001.

86. World Bank have sanctioned loan amount of about Rs.1500 crores for the total project cost for 1420 KMs. of high density corridors and also to construct bridge across river Krishna on downstream of Nagarjuna Sagar Dam. In addition, 1620 KMs. are being improved under backlog maintenance work. All the works are under progress and they are going to be completed by December 2002. In addition to the above, about 1243 KMs. of roads are being improved under AP Economic Restructuring Project at a cost of Rs.363 crores and they will be completed by June 2002. The Government has also announced B.O.T. policy to encourage private entrepreneurs to take up roads and bridge project. Projects worth Rs.200 crores have been taken up under this programme. NABARD has also sanctioned several roads and bridge projects on R&B network at a cost of more than Rs.600 crores.

Transport

87. In order to streamline the existing system and provide better services to the users, the Government have taken up computerization of three R.T.O offices and the work has been completed in a record period of 6 months. The services rendered are quick, efficient and to the utmost satisfaction of consumers. Keeping in view the positive response from the public, it has been decided to extend the computerized services to all the remaining 35 regional transport offices in the State.

Ports and Airports

88. To develop International Airports at Hyderabad and Visakhapatnam Government have appointed Tata Economic Consultancy Services as their consultants. In respect of International Airport at Hyderabad, the site selection is completed and the land acquisition process is in progress for which Rs.20 crores have been set apart in this years budget. In case of the proposed international airport at Visakhapatnam, study for the selection of an alternative site between Visakhapatnam and Kakinada is under way. The ports at Krishnapatnam, Kakinada and Vadarevu have already been privatised. Proposals to privatise ports at Gangavaram and Machilipatnam are being processed.

Irrigation

89. Since irrigation development is crucial to the economic growth of the State, strengthening and expansion of irrigation infrastructure will continue to be the highest priority of the Government in the coming year. While new investments will be focused in backward and drought affected regions of the State, irrigation under the existing projects will be consolidated by completing the minimum rehabilitation program under the AP Economic Restructuring Project. Supported by the massive efforts of the Water Users Associations, in the last two years, 10.07 lakh acres of land in tail-end areas has been assured irrigation. Encouraged by the response of the farmers, Government have decided to further strengthen the ‘Water Users Associations" to share full responsibility of operation and maintenance of all irrigation systems and of cost recovery within their respective area of operation to achieve financial sustainability of the O & M activity.

90. Concerted efforts will be made to secure clearance of pending projects on the Godavari river, particularly the ‘Inchampalli’ and the ‘Polavaram’ projects. The State Government has also constituted the Godavari Water Utilization Committee, which is chaired by the CM to make use of Godavari water in the backward areas. A major reorganization of the Irrigation Department has also been undertaken. A new organization headed by a Chief Engineer is created to expeditiously implement the Sri Ramasagar stage-II and the Flood Flow canal projects. New circles have been created to finalize the implementation program of Yellampalli, Dummugudem and the Pranahita projects and to seek inter-state agreement in respect of Lendi and Penganga projects. Special investigation divisions have been sanctioned one for each district to prepare ‘master-plan’ for the development of minor irrigation sources in upland areas of the State. A major programme of minimum rehabilitation of 2,934 minor irrigation tanks located in the backward and the drought prone areas of the State has been formulated in consultation with the World Bank involving an outlay of Rs 178.50 crores. This programme is planned for implementation during this year through the Water Users Associations to benefit 9.09 lakh acres.

91. Major thrust is given for early completion of ongoing Mudduvalasa, Priyadarshini, Jurala projects namely, the Srisailam Right Branch canal, the Sriramasagar stage-I, the Kurnool Cuddapah canal modernization, A Madhava Reddy Canal (SLBC), the Rajolibanda Link Canal, Vamsadhara stage-II, Chitravati Balancing Reservoir and the Telugu Ganga Projects. New major schemes viz.Galeru Nageri, Handri-Neva, Guru Raghavendra, and the Nizamsagar Lift schemes are planned for implementation during this year. Suitable provisions are made to meet the land acquisition requirements of Somasila reservoir for higher storage. New schemes like Suddavagu, Yerravagu in Adilabad district, Surampalem and Kovvada Kalva in East Godavari district have been cleared, and action is underway for grounding these schemes. In respect of Veligonda project, detailed investigation of tunnel scheme will be taken up this year. Detailed project report of Nettampadu and Kalwakurthy schemes is also planned to be finalised to obtain clearance for implementation.

92. Steps are also being taken to improve efficiency of canal irrigation through computerization and electronic governance. On the administrative front, tender reforms and the counseling system will be further carried forward to encourage good performance. On the inter-state side, effective steps both at the political as well as at the legal front are taken to protect the riparian rights of Andhra Pradesh over the waters of inter-State rivers.

Energy

93. As a continuation of reform and restructuring process of power sector, APTRANSCO, has been recently unbundled and 4 distribution companies have been formed with their headquarters at Visakhapatnam, Warangal, Tirupathi and Hyderabad entrusting them with the management of distribution functions. Andhra Pradesh Electricity Regulatory Commission, has approved the new tariff order revising the tariff with effect from 4.6.2000. The Government are making all efforts to improve the efficiencies in the power utility by reducing the technical and commercial losses to pass on to the consumer the beneficial effects of Power Sector Reforms in terms of reasonable tariff and quality supply in a sustained manner. Government has already taken over the debt liability of Rs.738 crores of the Vidyut Bonds raised by APTRANSCO. In addition Government will provide a subsidy of Rs.1626 crores to APTRANCO as per the award of the AP Energy Regulatory Commission.

94. The State Government have established a 100% owned company in the name of A.P.Power Finance Corporation Limited on 12.7.2000 under the Companies Act, 1956 to raise funds for the power sector through floating of bonds to make energy sector self-sustaining.

95. The Government in its efforts to eradicate pilferage of energy, gave a drive during June, 2000 to regularise unauthorised domestic connections. The response was overwhelming with the registration of about 20 lakh consumers. The registration of unauthorised agricultural connections also received a response of about 3 lakhs of such connections. The delivery of meters has started and will be completed in a phased manner. Recently, an Ordinance has been promulgated to provide severe punishment for pilferage of energy.

Information Tecnology & Communications

96. The Government is committed to the use of Information Technology for the economic development of the State, improvement of quality of life of the citizens and for providing good governance. The achievements of the I.T.Sector in this regard are:-

The exports of software during 1999-2000 amounted to Rs.1059 crores representing a growth rate of 84% over 98-99 as against the national average growth rate of 56%.

The number of software units has grown from 177 to 977 during the year

A.P.State Wide Area Network and Video Conferencing facility have been launched on 1.11.99 paving the way for intensive monitoring of all developmental activities effectively by all departments.

E-governance projects like CARD, TWINS, MPHS and FAST continue to take the benefits of IT to the citizens.

A comprehensive IT policy document has been published.

97. The visit of US President Mr.Bill Clinton to Hyderabad demonstrated the importance of our State in the IT map of the World. Our State has been well endowed with highly skilled IT professionals. According to a NASSCOM survey, 23% of India’s Software Professionals belong to Andhra Pradesh. The Government intends to take the benefits of IT to rural areas of the State. To this end MOUs have been signed with ISRO & MEASAT for establishment of Satellite – based networks. These would be used for applications like distance education, Tele-medicine, e-governance, self-help groups, cooperative sector and other programmes useful to rural areas.

98. A comprehensive database on 7.67 crore citizens, 1.6 crore households and 1.2 crore land holdings has been developed. It will be installed in the PARAM Supercomputer in the Secretariat and will be used for planning and analysis. The plan outlay for IT Sector has been enhanced to Rs.25 crores in current financial year.

Forestry and Environment Protection

99. A massive programme for Rejuvenation and rehabilitation of forests has been taken up through people’s participation by forming Vana Samrakshana Samithis (VSS), under the Joint Forest Management (JFM) Programme. So far, 6,602 VSS, involving 13.05 lakhs beneficiaries are protecting and managing 16.65 lakhs ha. of forest area. Rural Women are actively participating in this programme. The VSS members are entitled for 100% usufructory rights.

100. In order to Green the State, 27 crore seedlings have been distributed during 1999-2000 and 27.79 crores seedlings are proposed for planting in 2000-2001. Further it is also planned to broadcast and sow 3,000 tons of seed of timber and minor forest produce species. Under the A.P. Hazard Mitigation and Emergency Cyclone Recovery Project, 3360 hectares of casuarina and 320 ha. of Mangrove plantations have been raised. During this monsoon, another 800 ha. of casurina and 170 ha. of Mangrove plantations are being raised.

101. The Abnus (Beedi) leaf collection is a boon in the rural Telangana areas. This activity is creating 80 lakh mandays of employment during the lean summer months and another 500 lakhs mandays in the Beedi Manufacturing units. 1,444 VSS have been involved in the collection of Beedi leaf during 1999-2000. These VSS are entitled for 50% of the net revenue for development of forests.

102. The A.P. Pollution Control Board has created five Zonal Offices and two additional task force teams, during 1999-2000 for decentralised decision making an effective environmental management. A few successes have been achieved in the areas of effluent quality control among bulk drug industries, improved industrial (Hazardous) Solid Waste Management Practices and in adoption of Waste minimisation / Cleaner production among the chemical industries. The Board is implementing, Bio Medical Waste Management notification of Govt. of India from 1999-2000, authorising 3 Bio Medical Waste Management facilities, two at Hyderabad and one at Vizag for the safe Waste disposal needs of the Health Care Establishments.

Tourism

103. The coming years promise the unfolding of Tourism potential in Andhra Pradesh. A new Tourism Policy has been declared and Special Tourism Areas have been notified. The reports of the Consultants like EDAW, KPMG, WTO, Vastu Shilpa and Singapore Zoological Gardens are under implementation stage now. Several incentives have been offered to attract private investments in hotel industry, transport and other leisure and eco-tourism areas. We invite the private investors to come forward and be our partners in the tourism development of the state. M/s.CRISIL has been appointed as a general consultant to assist the department in privatisation. A system has been put in place by setting up committees at Government level for privatisation of the specific projects.

104. A prestigious Botanical Garden and a Night Safari Park are being established at Kothaguda in Madhapur area. The works of Charminar Restructuring and Pedestrianisation scheme have been started to conserve and protect the World Heritage of Charminar. In the first phase, it is decided to implement the following three areas:

- Improvement of Lad Bazaar

- Improvement of Pathergatti Area with Signage

- Introduction of Heritage Walks from Charminar.

105. Buddha Purnima Project around Hussainsagar Lake is being developed to attract more and more in-bound and out-bound tourists. World Food Courts, Laser Shows, Cultural Plaza and Rock Gardens have been planned. The Department has participated in and is conducting a number of fairs and festivals to give a boost to Tourism in the State.

Good Governance

106. Towards the aim of establishing a Simple, Moral, Accountable, Responsive and Transparent (SMART) Government, we are committed to ensure efficient and responsive services to the common man through streamlining of systems and procedures in Government. We are also committed to ensure integrity in public service and to improve the effectiveness of the activities of the anti corruption bodies.

Law and Order

107. The general law & order situation in the State has been peaceful. The activities of PWG have been dealt with an iron hand. Total volume of crime has come down. The government has effectively controlled activities of fundamentalist organizations and the ISI. The law and order has been effectively maintained. Crimes against the weaker sections, women and minorities have been tackled effectively.

ACCOUNTS 1998-1999

108. The final Accounts of 1998-99 reveal a revenue deficit of Rs.2684 crores. After taking into account the transactions on capital as well as public accounts, the year closed with a negative balance of Rs.73.30 crores.

REVISED ESTIMATES 1999-2000

109. Transactions as per the revised estimates of 1999-2000 indicate a revenue deficit of Rs.2724.61 crores against the budgeted revenue deficit of Rs.1563.30 crores.

BUDGET ESTIMATES 2000-2001

110. During the financial year 2000-2001, we have programmed for an expenditure of Rs.24,438.83 crores under Non Plan and Rs.8228.12 crores under Plan. This will result in a revenue deficit of Rs.3840.92 crores which would be 2.8 percent of GSDP. The Fiscal Deficit is estimated to be Rs.8459.60 crores which would be 6.1% of GSDP. However, the fiscal deficit would be of the order of 3.9% of GSDP after excluding the amounts provided for power sector. After taking into account the overall transactions of the year, we will have a net deficit of Rs.328.95 crores. With the positive opening balance of Rs.281.88 crores, the financial year is expected to end with a negative balance of Rs.47.07 crores.

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

 
 
JAI HIND
 
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