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GOVERNMENT of ANDHRA PRADESH
FINANCE DEPARTMENT
Previous Budget Speeches

FINANCE MINISTER'S BUDGET SPEECH 2007-08

 
GOVERNMENT OF ANDHRA PRADESH

BUDGET SPEECH
2007 - 08


K. ROSAIAH,
MINISTER FOR FINANCE


SPEECH OF SRI K. ROSAIAH
HONOURABLE FINANCE MINISTER WHILE
PRESENTING THE BUDGET FOR THE YEAR
2007-08 TO THE ANDHRA PRADESH LEGISLATIVE ASSEMBLY
ON 19th Feb 2007.
 
Honourable Speaker Sir and Honourable Members,

1. I rise to present the Budget of the Government of Andhra Pradesh for the year 2007-08.

2. “If economic policy involves a strong emphasis on promoting labour-intensive economic activity, on enabling disadvantaged groups to participate in the process of economic growth, on making use of growing resources to expend public services and in developing social security arrangements, the reform process may provide real opportunities to achieve greater equity as well as to reduce poverty”. These thoughts of Nobel laureate Amartya Sen are inspiration for our economic policies. Every individual in the society, especially those from weaker and downtrodden sections must have access to basic amenities like nutrition, employment, health, education and housing. It is our cherished goal to provide these basic amenities to the citizens and make them equal partners in process of development.

3. In the three years that we are in power, our Government have successfully managed the State Economy which moved from dormancy to the state of prosperity. Although Budget expenditure is increasing every year, the decline in Revenue and Fiscal Deficits is an ample proof of successful fiscal management. We have successfully contained Revenue Deficit to Rs.64 crores in 2005-06, as against the Rs.2,961 crores in 2003-04. Our Government has received all-round praise from all the Rating Institutions for fiscal discipline, even in the wake of substantial increases in development expenditure in Irrigation and Housing. For the third successive year, we have not resorted to any overdraft from RBI which speaks volumes about our fiscal prudence and discipline and sound cash management. We hope to continue in the same path and eliminate revenue deficit by 2008-09 and would have revenue surplus thereafter. In the same fashion we would also contain fiscal deficit to 3% of GSDP.

4. Our aim, as far as Tax Administration is concerned is to augment tax collection by curbing tax evasion without increasing tax rates. In the preceding three years, tax collection has increased by 18% every year. There are two main reasons for this phenomenon. Firstly, the state's economy has been performing well and recorded an annual growth rate of 7% every year. Secondly, reforms in tax administration, VAT implementation, personnel recruitment and computerization have resulted in efficient tax administration culminating in revenue buoyancy. We estimate to collect Rs.25,256 crores in 2006-07 as against Rs.13,806 crores in 2003-04. By continuing the same trend, it is estimated to collect Rs.31,399 crores in 2007-08, 24 % increase vis-a-vis current year. Non tax revenue has also increased mainly due to increase in revenue from Mines & Minerals. In 2005-06, the revenue from this sector is Rs.1,062 crores, the highest in the country. This is due to focused efforts of the administration to increase revenue in this sector through establishment of Vigilance cells, Vigilance enforcement mechanism in districts and by curbing the unlawful activities in royalty payment and mining activities. We are anticipating a revenue of Rs.1,750 crores in the financial year 2007-08 from this sector. Total non-tax revenue estimate for the year 2007-08 is Rs.6,857 crores.


5. The Government of Andhra Pradesh is making concerted efforts to attain the targets stipulated in FRBM Act. As mandated in the FRBM Act, the Government is trying to bring the Revenue Deficit by 0.32% of GSDP and Fiscal Deficit by 0.25% of GSDP each year. The Government of Andhra Pradesh has got substantial incentives from the Central Government for acting in accordance with FRBM Act for the years 2004-05 and 2005-06. By achieving the targets as stipulated in FRBM Act., State Government has got Rs.1,078 crores interest relief and Rs.1,183 crores Debt relief from the Central Government. By maintaining similar fiscal discipline, we hope to get these incentives till 2008-09.


ANNUAL PLAN FOR 2007-08

6. Ever since we came to power, we have been trying to control the non-plan expenditure and increase the plan allocation in every Budget. Our aim is that the public expenditure should be development oriented. In the current financial year Rs.1,400 crores power subsidy has been transferred from plan to non-plan. And on the same lines, an amount of Rs.954 crores of committed expenditure of tenth plan period on salaries, pensions, and scholarships has been transferred from plan to non-plan. Despite these changes, our Government is increasing the plan expenditure substantially every year. For the financial year 2007-08, the annual state plan has been fixed at Rs.30,018 crores, which is a 53% increase to the current year plan allocation of Rs.19,557 crores. The percentage of plan expenditure to the total expenditure increased to 37%.

7. Our Government believes that Development and Welfare are two sides of the same coin. Keeping this in mind, allocations to Irrigation Projects, Housing, Education and Health have been increased substantially. Irrigation sector which is of paramount importance to the cultivators, got a major chunk of plan expenditure at Rs.13,000 crores. In order to meet the targets of providing affordable housing to the poor, Rs.4,793 crores have been allocated to Housing Sector. Education Sector has been provided Rs.823 crores, a 45% hike vis-a-vis current year and Health Sector has been provided Rs.759 crores with 42% increase. We have allocated Rs.2,277 crores to Rural Development, Rs.1,842 crores to Urban Development, Rs.1,462 crores to welfare sector and Rs.1,877 crores to Infrastructure Development.


WELFARE

“The hardest part of economic development is getting the first foothold on the ladder. House holds and countries at the very bottom of the world's income distribution, in extreme poverty, tend to be stuck. Countries already on the ladder of development, such as Bangladesh and India , are generally making progress, even if it is uneven and some times painfully slow. Our generation's challenge is to help the poorest of the poor to escape the misery of extreme poverty so that they may begin their own ascent upto the ladder of economic development. The end of poverty, in this sense is not only the end of extreme suffering but also the beginning of economic progress and of the hope and security that accompany economic development”.

                                                                                                                                                                                                           
- - JEFFREY SACHS.

8.
It is our endeavor to empower the weaker and downtrodden sections and give them the first right over various welfare schemes being implemented by our Government. I am happy to inform that, every welfare scheme that is being undertaken and every rupee that is being incurred on it, is achieving the intended purpose of reaching out to the target group. The pension for aged, widows, handicapped who are unable to fend for themselves, have been increased to Rs.100/- in the very first year of our government assuming power. The same has been increased to Rs.200/- in the current Financial Year. In the current financial year 8.98 lakh pensions have been newly sanctioned in 1/3 rd villages covered under INDIRAMMA Scheme, of which SCs comprise 18%, STs – 8.5% and BCs 49%. With a goal to ensure that no person shall be neglected in the society it is proposed to cover 1/3 rd villages in the financial year 2007-08 the rest in 2008-09 so that Mahatma Gandhiji's dream of serving the poorest of the poor, will be followed in true letter and spirit.

9. At least roof over head and two square meals a day is the wish of every common man and our Government is committed to fulfilling this wish. Every homeless poor is being provided a pucca house under INDIRAMMA. In the first two years since we came to power, we have constructed 12 lakh pucca houses. In the current year 17 lakh houses are being constructed in rural areas and 2 lakhs in urban areas. It is a matter of great pride to say that, 20% of SCs, 13% STs and 46% of BCs have benefited out of this scheme. These are not empty promises confined to the paper. Any one who visits an ‘Indiramma' village can see the kind of development that is taking place there. In the ensuing year, we are undertaking the massive task of constructing pucca house in another 1/3 rd villages under INDIRAMMA, thereby fulfilling the dream of every poor person to have a pucca house of his own. Accordingly an outlay of Rs.4,793 crores have been allotted to Housing Sector which is 328% more than current year allocation of Rs.1,161 crores.

10. Our Government ensures that every family below poverty line receives the essential commodities through Public Distribution System (PDS). Hon'ble members know how difficult it was previously to get a ration card. Our Government proactively enumerated all deserving families and saw to it that every poor family received a white ration card. To prevent the ineligible and middlemen from getting benefited at the cost of poor, IRIS cards have been supplied to all families. About 16 lakh poor families are getting the benefit of low price rice under Anthodaya Anna Yojana.

11. History tells us that since ages, inequitable distribution of land has been the root cause of all the social maladies. But the remedial measures taken to root out this scourge have not succeeded to the expected level. Our Government has taken up some concrete steps in this direction. So far, we have distributed around 4.37 lakh acres of land to the poor and underprivileged sections of the society. 97,000 SCs, 71,000 STs and 1,09,000 BCs have benefited by this land distribution. Even though, earlier Governments have taken up the distribution of land to the poor, assignees were not financially sound enough to cultivate the lands, which resulted in alienation of this land from them. To prevent the recurrence of this alienation, our Government is providing financial assistance under INDIRA-PRABHA to the assignees to cultivate the allotted lands. So far, Rs.206 crores have been given as assistance under this scheme. By implementing land reforms we are restoring the alienated lands to the poor.

12. Entire world is looking towards Indian youth with great interest. It has been proved that our youth are endowed with the creative potential to change the course of the society by their expertise in software and technology. Our youth are eager to reap the benefits of globalization. However, it is natural that the students from the weaker sections would not be able to compete with those from elite and urban background in this race. In order to make the students from the rural and underprivileged section a force to reckon with in today's globalized world, our government is providing many facilities to those who are willing to pursue their career. It is our aim to provide hostel facilities and scholarships to every poor student. For this purpose an amount of Rs.863 crores has been earmarked in 2007-08 Budget. This is 62% increase when compared to the current Budget allocation of Rs.533 crores. Allocations for SC, ST, BC & Minorities are increased to Rs.478 crores, Rs.91 crores, Rs.214 crores & Rs.80 crores respectively. Mess charges for the students in Social Welfare hostels have been increased by 25%. In respect of girl students, it is proposed to construct 23 college hostels, one in each district. 120 Integrated Welfare Hostels are being constructed with an outlay of Rs.220 crores.

13. Scholarships for minorities have also been increased on par with BC students by this 3.40 lakh minority students will be benefited. 43 training centres are being established in the state to train 9600 minority youth annually in computer education and DTP in Urdu language. We will construct 12 new hostels for minority students. We are also establishing new residential coaching centres to train minority students for competitive exams. The budget allocation for minority welfare is being enhanced to Rs.123 crores from Rs.69 crores in 2006-07.

14. It is a matter of great pride that women in our state are advancing financially. In our state 6.50 lakhs of self help groups are functioning with a membership of 80 lakhs and we are providing loans at 3% interest rate (PAVALA VADDI). In the current financial year, so far an amount of Rs.2,204 crores has been disbursed as loans to these groups. In the ensuing year, Rs.5,000 crore has been set as target to be distributed to self help groups and for this Rs.100 crores has been earmarked as interest subsidy. It is a matter of concern that Maternal Mortality Rate (MMR) has not been curtailed, despite keeping Infant Mortality Rate (IMR) under check. Our Government has initiated measures to keep the MMR under check, by earmarking Rs.20 crores under SUKHIBHAVA SCHEME.


RURAL ECONOMIC DEVELOPMENT


15.
Entire country has acknowledged the efforts of our Government in the areas of Agriculture and Rural Development. Hon'ble Prime Minister and other national leaders have, many a times, extolled the progress A.P has made in irrigation sector and suggested other states to emulate it. Due to our Government's initiative and effort, the Central Government has sanctioned special package to prevent farmers suicides. Our Government has waged and won the war against Multinational Seed Corporations who have exploited the poor farmers in the name of royalty and brought the price of BT seeds down to Rs.600 - Rs.750 as against the quoted price of Rs.1,800/-. Because of this initiative, farmers across the country have benefited to the tune of Rs.2,000 crores and A.P. farmers benefited to the extent of Rs.300 crores. Of late, even the national and vernacular media is giving lot of coverage to the Agriculture, because of the revolutionary initiatives our Government has taken in this sector.

16. Our Government is extending support to the farmers at every stage, right from sowing to marketing i.e., by providing the crop loans, organic manure, power, irrigation, crop insurance etc. In the current year, we have provided 11 lakh quintals of seed to the farmers with a subsidy of Rs.103 crores. Owing to the success of our ‘Seed Village Scheme' the usage of Certified Seed has increased to 57% of the seed used this year.

17. Our Government is implementing the special package as sanctioned by the Central Government in 16 districts of the state to provide relief to the farmers who are caught in the debt trap, due to the recurrence of droughts. Under this package, interest relief on crop loans is being given to farmers of which, 50% of the amount will be borne by the State Government. Crop loans have almost doubled since our Government came to power. In the year 2006-07, an amount of Rs.14,000 crores has been given as crop loans so far. This year the crop loan facility has been extended to 3.75 lakh new farmers. To rejuvenate the crippled Co-operative sector, our government has written-off all the accumulated losses in cooperative sector. The Government of Andhra Pradesh is in the forefront in implementing the recommendations of Sri Vaidyanathan Committee for strengthening of Co-operative societies by providing operational freedom to them and extending credit facilities to all the members in the society. An amount of Rs.100 crores has been earmarked for the purpose.


18. Despite many hurdles, we are continuing our ‘Free Power' scheme. During power shortage, we have imposed cut on domestic front and purchased power from other states at higher rates, in order to save the crops. We have successfully managed the power crisis in this year's Rabi season. To save the crops in the rabi season of 2007 an amount of Rs.1,250 crores has been earmarked for power purchase in next year's budget. This amount is in addition to the subsidy that is being given every year. This reflects our commitment towards the welfare of the farmers and provision of free power to agriculture.

“Each work has to pass through these stages, ridicule, opposition, and then acceptance. Each man who thinks ahead of his time is sure to be misunderstood. So, opposition and persecution are welcome, only I have to be steady and pure and must have immense faith in God, and all this will vanish”.
                                                                                                                                                                                                 
- - SWAMY VIVEKANANDA


19. When we embarked on a program of constructing irrigation projects with Rs.26,000 crores some have ridiculed us. Doubts were expressed about our ability to mobilize funds for these projects. When the funds were mobilized, some have remarked about lack of water for the projects. When God bestowed his benevolence on the state in form of good monsoon and availability of water is no longer a problem, some people are raising the bogey of corruption. We have spent Rs.20,000 crores in 3 years and brought additional twelve lakh acres under assured irrigation. I hope that, atleast now, with all these visible achievements, Jalayagnam will be free from doubts and jealousy.

20. ‘JALAYAGNAM', which was launched with a commitment to protect every acre of farm land from drought by providing irrigation has started yielding results. Irrigation projects like Jhanjhavathi, Pedderu, Pedda Gadda, Surampalam have already been completed. These projects which have been pending for decades were completed in a short span and we have gained the farmer's appreciation. This year we have provided irrigation to 50,000 acres under Telugu Ganga and another 50,000 acres under Alimineti Madhava Reddy (AMR) canal. Gundlakamma Dam which would irrigate 80,000 acres will start irrigating parched fields of Prakasam district from this year. Bheema Project (Rajiv Sagar) which remained a dream since the time of Nizam is also under construction and will provide succour to the farmers of Mahaboobnagar by next year. So far, an expenditure of Rs.500 crores have been incurred on this project and half of the project has already been completed. This project would irrigate 2 lakh acres by 2008. We are taking all the steps necessary to bring 12 lakh acres of additional ayacut every year under irrigation. In 2007-08, an outlay of Rs.13,000 crores has been earmarked for irrigation.


21. A comprehensive insurance scheme is being implemented to protect the farmers from floods, droughts and pestilence. In this Kharif season 19 crops have been covered under the scheme as against 11 crops last year. Rs.205 crores has been released towards the premium under the scheme during this year. In addition, a record amount of Rs.493 crores of compensation was paid by the insurance companies in settlement of farmers' claims during the Kharif 2005. We are also implementing National Agricultural Insurance Scheme with village as unit on a pilot basis in districts of Karimnagar, Mahaboobnagar, Prakasam, Kadapa and Ananthapur. Under this scheme, village is taken as unit for computing crop losses which is more beneficial to farmers.

22. In order to bring the fruits of agrarian technology to the doorsteps of farmers our Government has started awareness and training programme in the name of ‘RYTHU CHAITANYA YATRAS'. As part of this programme, officials from 10 departments associated with agriculture will visit the fields to tender advice and suggestions. Our Government have conceived yet another innovative programme called ‘POLAM BADI' to train the farmers on latest agrarian practices, usage of organic manures and optimizing the expenditure in order to get better yields. Under this scheme, 2 to 3 farmers will be trained in every village on latest agrarian practices, who in-turn will teach those techniques to other farmers in the village, so that the entire village gets benefited, which results in higher yields. We will rejuvenate the agriculture extension mechanism which has been deliberately weakened by previous government. An amount of Rs.41 crores has been earmarked for ‘POLAM BADI' and other Agriculture extension programmes.

23. Our Government is focusing on agro-allied sector, which is the mainstay of the rural poor. For the first time ever, sheep insurance has been provided in the state, for which 50% of the premium will be borne by the State Government. An amount of Rs.15 crores has been released as premium to the Insurance Companies this year. I am happy to inform the August House that Central Government has exempted Sheep Insurance from service tax, because of our persistent efforts. Group Insurance for the Fishermen community is extended to two lakh more fishermen brining the number of persons covered under the scheme to four lakh. Rs. 6 crores has been earmarked for Mahila dairy scheme to provide dairy infrastructure in Ananthapur, Mahaboobnagar and Kadapa districts.

24. Andhra Pradesh stands in the forefront as regards the effective implementation of Employment Guarantee Act, which is designed to prevent the migration of people from drought prone areas, due to lack of employment. This year itself, Government has undertaken works to the tune of Rs.1000 crores, thereby creating employment to 16 lakh people. The works undertaken under this programme are geared towards creation of productive assets. Under the scheme ‘INDIRAMMA CHERUVU', 11,000 tanks are being de-silted with an amount of Rs.600 crores, which will benefit 32 lakh acres of Ayacut. Well-designed monitoring system is initiated for prevention of irregularities under Employment Guarantee Scheme through Social Audit. Social Audit conceptualized by our Government has become a huge success which is being emulated by other states. In 2007-08, we are planning to provide employment to 20 lakh people with an outlay of Rs.1,660 crores. For this, an amount of Rs.166 crores which is 10% of the state's share has been earmarked.

25. A separate department has been created for developing remote and interior areas. Efforts are being made to provide employment to the youth, roads to remote villages, electricity and communication network, resolution of land disputes and medium irrigation projects for development of tribal areas. During the year, 9,513 people from tribal areas have been trained and employment opportunities are created for 5240 people. We are giving preference to the persons from the remote areas in selection of Home Guards. Rs.150 crores is budgeted to provide road networks in remote areas. To provide education facilities to these remote areas 4 new degree colleges 5 junior colleges and 8 hostels will be established.

26. To provide basic amenities to the ever-growing urban population is a great challenge. We are sincerely striving to provide water, sanitation, roads and highways to urban Andhra Pradesh. To provide continuous drinking water supply to towns and cities is our commitment. A pilot project of ensuring 24-hour water supply is successfully implemented in Adikmet area in Hyderabad . I assure you that this facility will be provided to all places in Andhra Pradesh. To ease traffic congestion in Hyderabad we are constructing Outer Ring Road with an outlay of Rs.4,000 crores. Flyovers are being constructed at important junctions. Mass Rapid Transport System (MRTS) is proposed to be established with an estimated cost of Rs.8,760 crores. An expressway project that will catapult Hyderabad to international standards is being planned with Rs.600 crores. A master plan to manage sewerage system of Hyderabad city with Rs.4,442 crores will be implemented from next year. Gradually an underground drainage system will be established in each town. We have earmarked Rs.50 crores to provide basic amenities to newly formed municipalities. I am happy to share the good news with the Honourable members that new Hyderabad International Airport will be ready for operation by the end of next financial year. It will be a shining Jewel for Hyderabad only.

27. I am happy to inform this August house that the Government of India have approved various proposals sent by the state and have sanctioned Rs.2,463 crores under 64 schemes for urban development. We have allotted Rs.800 crores under Jawaharlal Nehru Urban Renewal Mission for urban development in the coming year. We have allocated Rs.2,438 crores for Municipal and urban development.


HUMAN RESOURCE DEVELOPMENT


“Basic education is a catalyst of social change …. Literacy is a basic tool of self defence in a society where social interaction often involves the written media. An illiterate person is that much less equipped to defend herself in court, to obtain a bank loan, to enforce her inheritance rights, to take advantage of new technology, to compete for secure employment, to get in the right bus, to take part in political activity, in short to participate in the modern economy and society”.

                                                                                                                                                                                                                
- - Amartya Sen

28.
We firmly believe that for a better tomorrow, quality education to our children is a prerequisite. Our Government have conceptualized some innovative schemes with a view to bring qualitative changes on educational front. ‘BADI BATA' programme was launched to bring the dropouts and child labour back to schools. Already, 1.64 lakh children have been brought back to school under this programme. An outlay of Rs.495 crores has been allocated for renovation of the existing school buildings and for construction of new buildings. Rs.30 crores has been allocated to provide basic amenities like drinking water, sanitation facilities, libraries and laboratories in the schools. This year, our Government have established 40 new Kasturba Gandhi Balika Gurukula Vidyalaya s. Under Sarvasiksha Abhiyan programme, every school is being provided with computers to impart computer education. This scheme is being implemented in 1000 schools this year. To impart state of the art education to the students from rural background 300 concept schools across the state are being planned with Public-Private-Partnership (PPP).

“My faith is in the younger generation, the modern generation, out of them will come my workers. They will workout the whole problem, like lions”.

                                                                                                                                                                                                    -- Swamy Vivekananda.


29. Our Government is committed to expand the opportunities in higher education. Keeping in view the wishes and aspirations of the present generation we have already established three new Universities. A fourth University is being planned for Nalgonda and Mahaboobnagar Districts. JNTU colleges are being planned at Vizianagaram and Karimnagar towns. In order to bring quality education to the doorsteps of rural children, 21 st Century Gurukulams are being planned across the state, for which Rs.20 crores has been allocated in the Budget. Keeping in view the importance and the growth potential of Horticulture sector, one Horticulture University , which is the first in South India , is being established at Tadepalligudem in West-Godavari District.

30. Apart from these initiatives, we are facilitating the establishment of various national level institutes. Petroleum Universtiy of Dehradun is establishing its branch at Anaparthy of East Godavari District. The BITS campus near Hyderabad is at an advanced stage of completion. Central Government have agreed to establish an IIT in the state. With establishment of these institutions the state will be in forefront of scientific and technological education.

31. Jawahar Knowledge Centres (JKC) which were conceived to impart training to the rural based students have started yielding excellent results. In the year 2006 around 4,000 students trained in the JKC were placed in MNCs like IBM, Kanbay, Infosys etc. I am announcing with immense pride that 30% of the selected students were from below the poverty line. Keeping these achievements in mind, JKC concept will be extended to all Degree Colleges in future in order to provide gainful employment to Graduates in ITES Industry. JKC has become a role model in HR initiates and other states want to emulate this concept. To help rural students attain proficiency in English, language labs will be established.

32. With improvement in science and technology, the cost of medical services is increasing and it is becoming burdensome to the poor. Treatment of cancer, cardiac problems, kidney diseases would place huge economic burden on majority of people. We believe that providing basic health services to the people is the duty of government. In this regard, health insurance scheme by the name ‘Arogya Sri' will be implemented to provide health insurance to poor. Under this scheme, every person possessing white ration card will be insured to the extent of Rs.1.5 lakh. This would be taken up as pilot project in Mahaboobnagar, Anantapur and Srikakulam districts. We have allocated Rs.50 crores for the scheme in this budget.

33. We are commissioning 432 ambulances under National Rural Health Programme to provide emergency health care to rural folk. This will be under Public Private Partnership (PPP) model with an arrangement with Emergency Management & Research Institute (EMRI). It will provide emergency services for the rural people in events such as accidents, snake bites, maternity etc. This facility will be offered free of cost. We have trained 62,000 women medical volunteers to advice women during childbirth to avert infant and maternal mortality. Our Government have aided thousands of children by facilitating heart operations preventing untold misery to the children and their families. In order to provide this facility to a larger number of children we have allocated Rs.25 crores in this budget. A helpline which will operate on 24 hours a day basis is being established under PPP model to provide health advise to people.

34. We are giving utmost priority to development of medical education. Three medical colleges are being established in Adilabad, Praksam and Srikakulam in addition to RIMS in Kadapa which has started functioning. We have allocated Rs.75 crores in budget for this purpose. Rs.100 crores is allotted for construction of new buildings for medical colleges. In the year 2007-08, Rs.2,726 crores will be spent for providing of health and medical services, which is 29% higher than the current year's allocation.


INDUSTRIAL SECTOR

35. Our government is adopting a two-pronged strategy to promote industries in the state. The first one being, providing concessions, subsidies and incentives to help the industries in the state to become competitive and grow at a brisk pace. For the first time, the power tariff for the industry was reduced, making it the most competitive in the country. For small scale and new industries we are providing a subsidy of 75 paisa per unit. Single window clearance has been established to avoid inordinate delays. To the entrepreneurs who are setting-up small scale industries we are providing capital subsidy. Rs. 75 crores has been earmarked for this purpose.

36. Secondly, we are committed to providing world class infrastructural facilities to make Andhra Pradesh manufacturing hub for national and international companies. I am happy to inform the August House that a lot of world class companies have offered to establish their production units in the state. First phase works of the prestigious semi-conductor manufacturing facility i.e., ‘ Fab City ' are already underway. The second phase will be started as soon as the central government announces the semi conductor policy. The ‘Apache' factory manufacturing shoes at Tada has already commenced production. The expansion programme of Visakhapatnam Steel Plant budgeted at Rs.9,000 crores has already commenced. The Government have recently cleared Rs.1,200 crores proposal of MLR motors project for setting up car manufacturing. For the benefit of handloom weavers and leather industry, textile and leather parks are being established in all the regions of the state. In 2006 investment proposals worth Rs.93,000 crores were cleared by the State Government, which constitutes 10.2% of the entire investment in the country. Our state stands in second position after Maharashtra when it comes to attracting investments.

37. A large chunk of work force depends on small scale industries for their livelihood. Globalization is leading to closure of many small scale industries. In order to revive the small scale sector, A.P.SMALL SCALE SICK INDUSTRIES REVIVAL AND REHABILITATION SCHEME was formulated in July last year. Under this scheme many sick industries will be given interest relief, concessional power tariff and other benefits like sales tax deferment. With these measures in place, we believe that thousands of SSIs which are in losses will revive and provide relief to lakhs of industrial workers.

38. Our Government is determined to make available the fruits of Information Technology & Communication across the spectrum of the society which was hitherto limited to small pockets like Madhapur and Gachibowli. Therefore, a conscious effort is being made to spread and take the IT to areas around Hyderabad and even to small towns, so that the entire state will be transformed into a Knowledge Society. We have identified 31 special economic zones for stetting up of IT industries in different districts and necessary infrastructure is being provided. Warangal , Visakhapatnam , Kakinada , Vijayawada and Tirupathi are being promoted as Tier-II IT Hubs in the state. Our state has maintained the first position in IT growth rate during last two years. In the year 2004-05, our growth rate was 64.5% against national average of 34%. In the year 2005-06 the growth rate stood at 51%.


INFRASTRUCTURE

39.
Basic infrastructure like quality Power, Roads and Transport is crucial for attracting investments and promoting economic growth. Our government is committed to develop the infrastructure facilities to global standards.

40.
State Government have spent its own resources for maintenance of roads as per the guidelines of 12 th Finance Commission due to which, the central government is releasing Rs.245 crores per annum for a period of 4 years. Our government plans to utilize these funds for maintenance of state high ways, district roads and also roads under the purview of local bodies. Work is underway for four laning of NH – 9 from Hyderabad to Sangareddy. Each district has been provided with additional funds for carrying out road safety works. We have earmarked Rs. 1,750 crores for construction and maintenance of roads during 2007-08.

41. In order to promote commerce along the coastline, our government have taken up expansion of 12 non-major ports. Plans are being prepared to improve the cargo handling capacity from the existing 18 million tonnes to 100 million tonnes by 2012. Works are going on at a rapid pace at important ports like Gangavaram, Krishna Patnam, Nizampatnam and Machilipatnam. It is being planned to bring Gangavaram and Krishna Patnam ports into operation by 2008.

42. With increase in economic growth, there is bound to be more demand in Aviation Sector. With the efforts of our government to expand and reach IT to tier II towns like Vijayawada , Visakhapatnam and Tirupathi the demand for air connectivity to these places has increased. In order to keep pace with the growing demand, the expansion of air ports at Visakhapatnam , Vijayawada , Rajahmundry and Puttaparthy will be taken up immediately and MOU for development of airports at Warangal and Kadapa was reached with Airports Authority of India. An outlay of Rs.12 crores is earmarked in the Budget for these two airports. Simultaneously, techno-economic feasibility for development of green-field airports at Nellore , Ongole, Ramagundam and Tadepalligudem will be taken up.

43. We have provided free power to the farmers for last 3 years without resorting to tarrif hikes for domestic and industrial consumers and retained our numero uno position in power sector in the country. In addition, we have averted the situation of paying Rs.1,200 crores to the gas based power units. This speaks volumes about our efficient management in Power Sector.

44. The government have recognized the growing demand for power and is taking all the necessary steps for capacity addition. RTPP Stage-II has been completed. Jurala Hydroelectric Project and RTPP – Unit- 4 will be commissioned this year. In the coming year more capacity will be added as the natural gas needed for power production is being made available. 8,963 MW is going to be added to the existing capacity in Public Sector during the XI Plan period. It is pertinent to note that 20% of the additional capacity comes from Hydroelectric units. In addition to the state's efforts, a major power project of 4000 MW capacity at Krishna Patnam and addition of 1,000 MW expansion power project at Simhadri by NTPC are coming up in our state during the XI Plan period.

45. To minimize losses in T&D High Voltage Distribution System (HVDS) is being setup. Due to this, it is estimated that T&D losses would drop to 10 % from the current level of 25%. Under Indiramma and Rajeev Vidyudeekarana Yojana, provision of 100 % electrification of habitations is underway. Till November 2006, 2.56 lakh households in Grampanchayats and 13,000 households in Municipalities were provided electricity under Indiramma. Similarly 1.60 lakh households were provided electricity under Rajeev Vidyudeekarana Yojana till September 2006.

TOURISM


46.
The new Tourism policy, 2006 has been formulated with a view to preserve our precious cultural heritage and at the same time to showcase the beauty of Andhra Pradesh to the world, while generating revenue and employment. The policy announced by the Government not only seeks to offer concessions and incentives to the potential investor but also seeks to involve local bodies and citizens in the protection and conservation of historical monuments. While we are at number one in the country with regard to domestic tourism, our effort is to make Andhra Pradesh a leading state with regard to inbound foreign tourists. For this purpose a concerted effort is being made by involving various departments and taking up several programmes. It is proposed to establish budget hotels in various tourist locales, in association with Central Government. Budget hotels at Anantagiri, Araku, Gandi etc are being planned. The Government have also taken up conservation and restoration of several monuments like Kakatiya temples in Warangal and Qutub Shahi tombs in Hyderabad as part of preservation of our glorious heritage and culture.


ACCOUNTS

47.
The final accounts of 2005-06 show a revenue deficit of Rs.64.11 crores. After taking into account the transactions on capital as well as public debt and public account, the year closed with a negative balance of Rs.88.90 crores.


REVISED ESTIMATES 2006-07


48.
Transactions as per the revised estimates of 2006-07 indicate a revenue deficit of Rs.53.54 crores against the budgeted revenue deficit of Rs.995.84 crores. The overall transactions of the year are estimated to result in a net surplus of Rs.30.81 crores. After taking into account the opening negative balance of Rs.88.90 crores the year-end balance is estimated to be negative Rs.58.09 crores.


BUDGET ESTIMATES 2007-08

49.
For the financial year 2007-08 it is programmed for an expenditure of Rs.48,023.43 crores under non-plan and Rs.32,973.17 crores under Plan. This will result in a revenue deficit of Rs.36.48 crores, which would be 0.01 percent of GSDP. The fiscal deficit is estimated to be Rs.8,620.64 crores, which would be 3 percent of GSDP. After taking into account the overall transactions of the year, we will have a net surplus of Rs.25.01 crores. The financial year 2007-08 is expected to end with a negative balance of Rs.33.08 crores.

50.
Sir, with these words, I now commend the Budget to the House for approval.
 
 

Jai Hind
 
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