Previous Budget Speeches



Budget Speech

Speech of
Chief Minister and Minister in charge of Finance,

presenting the Budget for 1955-56 to
the Andhra Legislative Assembly
on the 8 July 1955


    I rise to present to the House the Budget of the Andhra State for 1955-56. As the House is aware an interim of care-taker Budget was presented to Parliament in March last and a Vote on Account for six months' supply was obtained under Article 356 of the Constitution, pending formation of a new Ministry in the State. That Budget has been revised, making provision for certain new schemes based on the policies of the present Government.

2. We are now on the eve of momentous changes in India. Our Prime Minister is visiting various countries in Asia and Europe with a mission of peace and good will and more than anybody else in the world, he has been effectively influencing deliberations of international councils on the side of peace. India's' responsibilities in the international sphere are increasing and let us hope that India's mission of peace will be heard by other countries.

3. Internally too we are shaping our future in a manner which will change the face of the country beyond recognition in a few years. Both in the social sense and economic sense we are accelerating our pace of reform and if the present tempo is maintained for a few mother years, we can certainly hope to see India very much different from the India known to our fathers. The Five-Year Plans are beginning to be recognised as charters of a new India. We have to see that felt needs of the people are met. Villages which have no drinking water facilities and communications, perhaps for centuries, are evolving plans to have those amenities.

4. All over the states in India the report of the states' Reorganisation Committee is awaited with keen interest. It has a momentous task of re-shaping the administrative units of the country untying the historical knots in many cases. I expect the report to be out very soon and remove the animated suspension existing at present. There are Telugu-speaking people contiguous to our borders and let us hope they will all come under the same administrative set-up ere long. At any rate we would like all Telugu-speaking people to have reasonable facilities for their education and employment.

First Five Year Plan

5. The current year is the final year of the period of the First Five-Year Plan. Let me take this opportunity to review the progress made in Andhra State in respect of the above plan. After the partition of Madras State in 1953, the Plan of the Composite State was split up, and the portion of the Plan relating to Andhra areas has been shaped into a separate Plan for Andhra State with some changes. The outlay of the Andhra Plan has been fixed at Rs. 69.37 crores, including provision for schemes such as medium and small irrigation schemes, thermal extension schemes for increasing employment opportunities, the national water-supply scheme, etc., which have been undertaken as part of the expanded Plan. Large provision has been made under development heads like, Agriculture, Irrigation, Power Projects, Road Development, etc., and under Social Service such as education, Public Health, Amelioration of Back Ward Classes, etc. Appendix III shows details of the provision made under the several Plan heads. By the 31 March 1955, the outlay on the Plan was about 64.4percent. It is estimated that in the current year, the Plan schemes will make appreciable progress and that shortfall will not be large. Let me know describe the progress under important Development heads and Social Services in the First Five-Year Plan. Before doing so, however, I would like to explain the type of expenditure that is shown as Plan expenditure. Expenditure on General Administration, Police, Courts and Prisons, and on the collection of revenue, etc., however essential it may be for orderly Government, cannot be described as Development expenditure and is, therefore, not shown as Plan expenditure. It is only expenditure on Education, Medical Relief, Public Health, Agriculture, Irrigation, Power, etc., that can be regarded as Development expenditure. All expenditure even under these heads, is not Plan expenditure. It is only expenditure incurred on the provision of a new services or institution that is shown as Plan expenditure. For instance, expenditure on the maintenance of existing educational or medical institutions does not come under the Plan. The opening of a new institution or improvement of an existing one is appropriately brought within the Plan and expenditure on it is shown as Plan expenditure. I would like Honourable Members to keep this in view in judging the magnitude of the outlay on Plan schemes, particularly the portion that is debited to the Revenue Account.


6. The total irrigated area at the beginning of the First Five-Year Plan was 28.80 lakhs acres. As a result of the schemes taken up in the First Five-Year Plan an additional area of 4.31 lakhs of acres will be brought under Irrigation. The principal projects etc., now under execution are the Tungabhadra Low Level Canal, the Krishna Barrage, the Upper Pennar Project, the Romperu Drainage Project, the Pennar Kumudvathi Project, the Rallapadu Project, the Bhairavanithippa Project and the Sagileru Project. Besides, 17 irrigation schemes have been sanctioned for execution in Scarcity areas, the most important of which are improvements to the Kurnool-Cuddapah Canal and the Narayanapuram Anicut Scheme in Srikakulam district. Of the Projects now under execution, the Tungabhadra Low Level Canal scheme, the Upper Pennar Project, the Pennar-Kumudvathi Project, the Rallapadu Project and the roamperu Drainage Scheme are expected to be completed by the end of the First Five-Year Plan period. Work on the remaining projects will continue in the Second Five-Year Plan. The outlay on Irrigation during the period of the current plan is expected to be Rs. 12.74 crores.

The Nandikonda Project is expected to be sanctioned shortly and certain preliminary works such as laying a road and investigation of a railway line to the dam site have been taken on hand. The Project which will be the largest of its kind in South India will bring under Irrigation about 20 lakhs of acres in the Andhra area. It is a matter are for great satisfaction to all of us that this magnificient project has at last been sanctioned for inclusion in the Plan.

Power Projects

7. At the beginning of the First Five-Year Plan period, the total installed capacity in the State was 21.4 million watts comprising 16.25 million watts of steam and oil and 5.15 million watts diesel sets. Besides, hydro-electric Power is being purchased from Mysore to the extent of 2.7 million watts and from Madras to the extent of 3.4 million watts. The per capita consumption of electricity in Andhra State was only 5 units at the beginning of the First Five-Year Plan period. At the end of this period, an additional installed capacity of 47.7 million watts is expected to be brought into operation and the per capita consumption is expected to rise to 10 units. At the end of the current Plan period, there will be 600 towns and villages receiving electric supply. The principal Power projects now under execution are the Machkund and Tungabhadra. Besides, schemes for expansion of Power for increasing employment opportunities, estimated to cost Rs. 127.8 lakhs have also been sanctioned and are under execution. It is expected that there will be no shortfall in the Plan so far as Power is concerned. Though Machkund will come into operation in the current year, there will still be further capital expenditure connected with it in the second Five-Year Plan period. The Tungabhadra Project will also be carried over the Second Plan. For the rapid industrialisation of the country, it is essential to develop Power; although we have a long way yet to go, the achievement during the current Plan, viz. , addition of 47.7 million watts to the installed capacity and doubling of the per capita consumption is worthy of mention.


8. The Plan provision for highways of the State was fixed at Rs. 2.48 crores, made up Rs. 1.26 crores for State roads, Rs. 0.67 crore for the other roads and Rs. 0.55 crore for tools and plant. The State roads comprise State highways, major district roads, etc., under the control of the State Government, while other roads comprise major and minor district roads, under the control of local bodies and village roads. There are 1, 362 miles of State highways connecting national highways or highways of adjacent States. 4.332 miles of major district roads are under the control of the Government and 2, 398 miles under the control of local bodies. 14 miles of other (minor) district roads are under the control of the Government and 2,799 miles under the control of district boards. There are 3,623 miles of village roads which give access from villages to the nearest district road, highway, railway, Canal or connect neighbouring villages. Major district roads are being taken over by the Government from local bodies gradually to the extent that State finances permit. The policy of the Government is to take over ultimately all major district roads under their control and leave only minor district roads and village roads under the control of local bodies.


9. As Honourable Members are aware, the constitution provides that State shall endeavour to provide, within a period of 10 years from its commencement, free and compulsory education for all children until they complete the age of 14 years. With the slender resources available to the Andhra State, it will be impossible to attain the target within the prescribed period, but attempts will be made to reach as near the goal as possible.

Primary Education

According to the target fixed in the First Five-Year Plan, 1, 592 new elementary schools should be opened by local bodies and aided managements. Seven hundred and fifty-one schools have already been opened. One of the reasons why more schools could not be opened was that the finances of district boards were very unsatisfactory and they could not take up any additional liability. Another reason was that pending a decision o0n the recommendation of Kuppuswami Committee that all elementary schools should be brought under one unified control and one agency, aided education managements were not allowed to open new schools. It is proposed to open more schools in the current year. There are about 18, 000 primary schools in the State. It is expected that by the end of the current year 63.5% of children of the age group 6 to 11 and 8.4% of those of the age group 11 to 14 will be at school.

Secondary Education

There are 600 high schools in the State. 6.13% of children of the age group 14 to 17 are at school. The major recommendations of the Secondary Education Commission such as establishment of multi-purpose schools are being implemented. The Government of India will bear 66% of the non-recurring expenditure and 25% of the recurring expenditure in respect of the major recommendation of the Commission for the First two years. It is proposed to convert 15 of the existing high schools into multi-purpose schools with two courses in each during the current year and to strengthen the teaching of science subjects in 30 others. A Model High School attached to the Government Training College, Kurnool, has just been opened. The high school will have Forms III to VI and will provide instruction both in Telugu and English medium.

Collegiate Education

Under collegiate education, the First Five-Year Plan provided mainly for expansion of the facilities in the Engineering Colleges at Kakinada and Ananthapur. The Government of India have approved of schemes of Development of the two Colleges at a total cost of Rs. 43 lakhs and have promised to give a grant of not less than a third of the non-recurring expenditure. They have also promised to give an interest-free loan of Rs. 2 lakhs for each of the two colleges for the construction of hostels. Provision has been made in the budget for implementation of these schemes.

As it was considered that the present output of graduates from the two Engineering Colleges in the State would not be adequate to meet the demand for engineers in connection with the execution of major river valley and Power projects contemplated in the Second Five-Year Plan, the Government have sanctioned the opening of a new engineering college at Waltair by the Andhra University in the current academic year and have promised a non-recurring grant of Rs. 6.50 lakhs and a recurring grant of Rs. 1.50 lakhs to the University for this purpose. The All-India Council of Technical Education has been addressed for a grant to cover 66% of the non-recurring expenditure and 50% of the recurring expenditure.

The Government have also sanctioned the opening of a compressed Licentiate Course for two and a half years in Civil, Mechanical and Electrical Engineering at the Engineering Colleges at Ananthapur and Kakinada from the present academic year.

The Government have recently sanctioned the opening of a training college for women at Rajamandry in the old buildings of the Government Arts College and a Training College for Men at Nellore.

Venkateshwara University

A grant of Rs. 3. 50 lakhs was sanctioned from State funds to Sri Venkateshwara University in 1954-55, besides an advance of Rs. 4.00 lakhs. A provision of Rs. 11 lakhs has been made in the Budget Estimate, 1955-56, for further grants to this University. An application has been made to the University Grants Commission for grants-in-aid for this University. The Commission sent an Visiting Committee in May last which inspected the University and had discussions with its representatives. The decision of the Commission is awaited.

National Cadet Corps

The National Cadet Corps in this State consists of 9 Civil Divisions ( including one for girls) with 15 Officers, 1, 398 boy-cadets and 90 girl cadets and 43 Junior Divisions ( including 4 for girls) with 43 Officers, 1, 287 boy-cadets. And 120 girl-cadets. The scheme of Auxiliary Cadet Corps was introduced in the State in 1954-55. It is now in force in 104 schools and about 10, 400 boys are undergoing training.

Medical Relief and Public Health

10. For a population of 20. 5 millions living mostly in villages, there are only 160 hospitals and had 409 dispensaries, besides a few institutions for treatment of particular diseases. The existing medical facilities are inadequate, but the expansion is subject to the limitations of State finances. The Government have decided to increase the bed strength of the Government General Hospital, Guntur, from 225 to 350 and to sanction the necessary additional staff, so that clinical courses in the Guntur medical college can start from the 1 July 1955. The hospital at currently is in need of urgent expansion on account of the importance the place has gained as the State capital. It is therefore proposed to put up additional buildings in the Government General Hospital, Kurnool, at an estimated cost of about Rs. 14. 75 lakhs. The Government have also decided to construct additional buildings in the Mental Hospital at Waltair at an estimated cost of Rs. 6.17 lakhs ( including the cost of land), so as to provide accommodation for 50 criminal lunatics of this State who are now being confined in the Mental hospital at Madras. There are now two malaria units working for a population of one million, and two survey units and one control unit under the National Filarial Programme. The mass B.C.G. Campaign now covers two districts, namely, Srikakulam and Visakhapatnam. There is also an unit conducting diet surveys. A programme for the construction of wells and latrines in rural areas is included in the First Five-Year Plan. The cost of the programme is Rs. 60 lakhs. The programme has been initiated in 4 units, each unit providing for the construction of 3 wells and 100 house latrines in each of hundred contiguous villages with a population of 66000. The four units are situated near Simhachalam in Visakhapatnam district, Palnadu in Guntur district,Pattikonda in Kurnool district and Kadri in Ananthapur district.

Water-Supply and Drainage Schemes

Protected water-supply is now available in 18 municipalities and urban Panchayat areas. Many of these schemes which were designed and executed years ago for small populations are unable to meet present requirements. Proposals for improvements to nine of these schemes were included in the First Five-Year Plan, along with eight new schemes. Of these 17 schemes, 3 could not be taken up owing to difficulties in financing their expenditure. Three of the schemes are expected to be completed before the close of the First Five-Year Plan period, leaving the remaining 14 incomplete schemes to be continued during the Second Five-Year Plan. One of these incomplete schemes to be carried forward into the second plan is the Gosthani Water-Supply Scheme at Visakapat. The Gosthani scheme is estimated to cost Rs. 116 lakhs. It is intended to serve the Municipality, Railway, Port and Defense establishment at Visakapatnam. About half the estimated expenditure on the scheme will be incurred before the end of the current year. The Central Government have been addressed for the required assistance.

The First Five-Year Plan included 3 municipal drainage schemes. One scheme (Visakapatnam) is expected to be completed by the end of the current year. It is propped to take up another scheme (Vijayawada) in the current year. The third scheme (Eluru) could not be taken up on account of difficulties in financing its execution.

Rural Water-Supply

Under the national Water-Supply and sanitation programme for rural areas, the Government of India have promised grants to the extent of half the expenditure on rural Water-Supply schemes limited to Rs. 30 lakhs for 1954-55 and 1955-56. A sum of Rs. 10 lakhs in the Revised Estimate, 1954-55, and another sum of Rs. 50 lakhs in the Budget Estimate, 1955-56 have been provided for these schemes and credit has been taken for grants from the Government of India to the extent of Rs. 5 lakhs, in the Revised Estimate, 1954-55 and Rs. 25 lakhs in the Budget Estimate, 1955-56.

Amelioration of Scheduled Castes & Tribes

11. There are 39 Scheduled Castes with a population of 27.23 lakhs or 13.3% of the total population of the State. The percentage of literacy among them is 6.22. There are 62 ex-criminal tribes with a population of 2.03 lakhs or 0.9% of the population of the State. The other back ward classes are 77 in number with a population of 70.40 lakhs or 34.3% of the total population. The percentage of literacy among the back ward classes is 10.26. The measures undertaken for amelioration of the Scheduled and back ward classes fall under three broad heads, Education, Public Health and Social and Economic uplift. In the First Five-Year Plan, provision was made originally for educational schemes costing Rs. 119.83 lakhs, Public Health measures ( provision of house-sites, wells, etc. ) Costing Rs. 14.77 lakhs and other schemes costing Rs. 33.4 lakhs or a total of Rs. 1, 67.84 lakhs. This has since been Revised to Rs. 230 lakhs. The total expenditure to the end of the First Five-Year Plan period is estimated at Rs. 252.21 lakhs.

Schemes for the development of Scheduled areas and welfare of Scheduled Tribes are eligible for grants from the Central Government understand Article 275 ( 1) of the Constitution. Schemes are being sent to the Government of India every year for approval before their execution. These measures fall under all heads of nation-building services such as Education, Medical, Public Health, Agriculture, etc. A total provision of Rs. 29.49 lakhs in the Revised Estimate, 1954-55, and Rs. 39.29 lakhs in the Budget Estimate, 1955-56, was made for the schemes.

Agriculture and Animal Husbandry

12. As the House is aware, our aim, as laid down by the Planning Commission, is that agricultural production should be doubled for the country as a whole within a period of 10 to 15 years. As its State is surplus in rice, it is proposed to pay special attention to the production of cash crops such as cotton, sugarcane, coconut and oil seeds, tobacco chillies, onions, etc. Several research schemes relating to these commodities have been undertaken with the help of the Indian council of Agricultural Research.

The care and improvement of livestock are of special importance in an agricultural economy like ours. There is unfortunately no Veterinary College in our State. We are entitled to certain facilities in the Madras Veterinary College for a limited period. But our need of trained Veterinary personnel for schemes connected with the N.E.S., C.P., and livestock development proposed for the Second Five-Year Plan period is far greater. The Government have accordingly decided to start a new Veterinary College. Sanction has been accorded for the scheme, and funds have also been provided in the budget. Provision will be made for 48 students at the Agricultural College, Bapatla, for the first year Veterinary Course, pending decision on the question of permanent location of a full-fledged Veterinary College for the State.

Handloom Industry

13. The Government of India have sanctioned assistance to the extent of Rs. 80.25 lakhs from the Handloom Cess Fund during 1953-54 and 1954-55 for the development of Handloom Industry. A sum of Rs. 59.65 lakhs was spent for this purpose till the end of March 1955. There has been substantially increase in the average monthly sales of handloom cloth from Rs. 11.02 lakhs during 1953-54 to Rs. 12.57lakhs during 1954-55. As against the target of 15 thousand weavers to be brought into co-operative fold, 14, 858 were brought in up to 31st March 1955. The Government of India have approved the formation of an All India Handloom Fabrics Marketing Co-operative Society with the object of promoting internal and external Marketing of handloom products. This Government have taken 10 shares each of the value of Rs. 1 thousand in this Society.

Community Project and National Extension Service Schemes

14. There are two Community Projects in the State; one in the Kakinada-Peddapuram area and the other in the Kurnool-Cuddapah area, and two Community Development Blocks, one at Ichapuram in Srikakulam district and the other at Vayalapadu in Chittoor district. Besides, there are 27 National Extension Service Blocks spread all over the State. In the Community Project areas and Development Blocks, an expenditure of Rs. 60.4 lakhs was incurred from State Funds up to the 31st March 1955, against which contribution to the extent of Rs. 27.3 lakhs was collected from the people and Central aid was received to the extent of Rs. 13.83 lakhs. The expenditure incurred in National Extension Service Blocks to end of March 1955 was Rs. 20.9 lakhs (excluding loans) against which Central aid amounted to Rs. 3.26 lakhs. Contributions were also received from the local people. The expenditure on Community Project and National Extension Service schemes in the current year is estimated at Rs. 27.13 lakhs and Rs. 36.06 lakhs respectively. People every where have taken real interest in these schemes and have willingly supplied labour and made contributions in other ways towards the schemes. The Prime Minister of India attaches great importance to these schemes and considers that the people could be reached through them more effectively than through normal administratively machinery and that they could be used as' local centres' for the implementation of the plan. Their success has attracted attention even in other parts of Asia. Concerned as they are with the rural population, they institute a significant part of the plan; the schemes not only add to agricultural production and the amenities of rural life but will in course of time transform the very spirit of the people; their age-long inertia and helplessness will give way to self-help and self-reliance.

Local Development Works

15. These are financed partly from Central grant and partly from contributions realised either from the people of the locality or the local body concerned. These works cover most of the development or nation building services such as Education, Public Health and Rural Sanitation, Rural Water-supply, Agriculture, improvements to livestock, Communications, etc. An expenditure of about Rs. 14 lakhs was incurred to the end of March 1955, while the expenditure in the current year is estimated at Rs. 4 lakhs.

Accounts 1953-1954(Second six months)

16. I shall now review the accounts of 1953-54 ( second six months) and the Revised Estimates for 1954-55 before taking up the Budget for 1955-56. Accounts, 1953-54 ( Second six months): -the revenue for 1953-54 ( second six months) was Rs. 1,129.89 lakhs and the Expenditure on Revenue Accounts Rs. 1,243.77 lakhs, leaving a deficit of Rs. 113.88 lakhs. The expenditure during the half-year on development schemes included in the Five-Year Plan was Rs. 177.07 lakhs. The capital expenditure amounted to Rs. 368.73 lakhs excluding the transactions relating to State Trading Schemes, while under loans and advances, the gross disbursements amounted to Rs. 144.29 lakhs and the recoveries of loans given in previous years to Rs. 138.83 lakhs, leaving the net disbursements at a small sum of Rs. 5.96 lakhs.

During the half-year, a loan of Rs. 375 lakhs was taken from the Union Government and a sum of Rs. 245.49 lakhs was credits as this Government's share of the proceeds of the loan raised by the Government of the Composite ( Madras) State in July 1953. Besides, there were credits due to advance payments by Madras and Travancore and Cochin Government's for the rice supplied to them. As a result of all these credits, there was a large closing balance of Rs. 800.34 lakhs even after meeting the revenue deficit and capital expenditure.

Revised Estimate 1954-55

17. I shall now pass on to the Revised Estimate for 1954-55.

Revised estimate, 1954-55:- The revised estimate, 1954-55, anticipated a revenue of Rs. 2,138.62 lakhs and an expenditure of Rs. 2, 487.44 lakhs. The revenue deficit according to these figures was Rs. 348.82 lakhs against the deficit of Rs. 299.18 lakhs anticipated at the time of framing the budget for 1954-55. The increase in the deficit was due mainly to expenditure on the General Elections held in the State during February-March 1955 and N.E.S. Schemes for which there was no provision in the Budget. The provision in the Revised Estimate, 1954-55, for development schemes included in the Five-Year Plan was Rs. 410.63 lakhs which exceeds the revenue deficit considerably.

The capital expenditure as shown in the revised estimate, 1954-55, was Rs. 1, 203.59 lakhs. The main heads under which provision was made are Irrigation ( Rs. 388.22 lakhs), Agriculture ( Rs. 46.77 lakhs), Buildings ( Rs. 172.42 lakhs), and Electricity ( Rs. 500 lakhs). The gross disbursements under loans and advances were expected to be Rs. 489.88 lakhs and the recoveries of advances made in previous years Rs. 250.37 lakhs, leaving the net disbursements at Rs. 239.51 lakhs.

Credit was taken in the Revised Estimate, 1954-55, for a total loan of Rs. 1, 410.69 lakhs, of which Rs. 250 lakhs represented the allotment to this State out of the proceeds of the National Plan Loan floated by the Union Government in 1954.

A loan of Rs. 600 lakhs was taken from the Special Development Fund for Plan Schemes and the balance of Rs. 560.69 lakhs was for various purpose such as G.M.F. Schemes, Chemical manures, Handloom Industry, etc. After providing for capital expenditure and net disbursements under loans and advances and for repayment of loans to the Union Government, the enclosing balance of the year was expected to be Rs. 159.70 lakhs.

In the Interim Budget presented to Parliament in March last, the revised estimates for 1954-55 were given. The year has since come to a close and the Accountant-General has furnished preliminary actuals for the year. These do not include certain inter-Governmental and inter-departmental adjustments, which will be made only in the final accounts of the year. Figures for all the adjustments have not yet become available. Figures for certain adjustments have, however, been obtained from the Accountant-General to the extent available with him and after making these adjustments, the revenue deficit for 1954-55 is likely to be of the order of Rs. 450 lakhs, all of which will be accounted for by expenditure on development schemes in the Five-Year Plan.

There is an increase of about Rs. 100 lakhs over the deficit anticipated according to the Revised Estimate, 1954-55 ( Rs. 3,48.82 lakhs). This is due to shortfall under revenue partly offset by saving in expenditure. The shortfall in revenue occurs mainly under Land Revenue, Stamps and Agriculture, under grants from the Government of India for G.M.F. And N.E.S. Schemes and local development works and under the grant from the Handloom Cess Fund for the development of Handloom Industry. The saving in expenditure is due mainly to the transfer of the provision for repayment of loans to the Central Government from the Revenue Account to the Debt Sections in accordance with the instructions of the Government of India, and to lapses in the provision made in the Revised Estimate for election expenses, N.E.S. Schemes and local development works, and for development of handloom industry.

The figures mentioned above are not final, as the Accountant-General has not yet carried out all the book adjustments.

Budget Estimate, 1955-56.

Revenue Account 1955-56

18.The figures of Revenue and Expenditure are:-

  Rs. Lakhs
Revenue 2,198.03
Expenditure 2,564.34
Dificit 366.31
As compared with the Revised Estimate for 1954-55, the Budget for 1955-56 shows an increase of Rs. 59.41 lakhs under Revenue and an increase of Rs. 76.90 lakhs under Expenditure.

Increases in Revenue occur mainly under Union Excise Duties ( Rs. 9.83 lakhs), Stamps ( Rs. 6.54 lakhs), Irrigation ( Rs. 7.99 lakhs), Industries ( Rs. 7.82 lakhs) due to larger receipts anticipated from the sale of products of the Andhra Paper Mills, Rajahmundry and from the sale of Khadhi, Electricity ( Rs. 27.80 lakhs) due to sale of power to be generated by Machkund Scheme and enhancement of tariffs and Miscellaneous ( Rs. 19.26 lakhs) due to increase in Central grant for National Extension Service Schemes and Local Development Works. On the other hand, there is a decrease in this Government's share of Income-tax receipts ( Rs. 21.80 lakhs).

Under Expenditure, the increase is due to provision for additional survey parties ( Rs. 19.70 lakhs), for rural Water-Supply Schemes under the National Water-supply Scheme in rural areas, larger expenditure under the National Filarial Scheme and for various new schemes, the more important of which are mentioned in the following paragraph. These measures are partly offset by decreases due to retrenchment in the Civil Supplies staff on account of complete decontrol of rice and certain other factors.

New Schemes

19. I shall mention the important new schemes for which provision has been made in the Budget for 1955-56. Under Education, a sum of Rs. 29.37 lakhs has been provided for implementing some of the major recommendations of the Secondary Education Commissions, the amount representing this Government's shares of the expenditure. A sum of Rs. 11 lakhs has been provided for grants to industry Sri Venkateshwara University towards its maintenance and development. For the Andhra University, a provision of Rs. 1.20 lakhs has been made for the development of research in nuclear physics and certain other items. It is proposed to acquire land for expansion of the Government Headquarters Hospital, Kakinada and for the construction of a new building for the Government Hospital at Chirala. A token provision of Rs. 100 each has been made for the schemes. Provision has been made for the opening of a Veterinary College ( Rs. 1.30 lakhs). The Government have decided to establish a separate Stationary Store for Andhra and have provided a sum of Rs. 13.90 lakhs for the purpose. A complete list of new schemes for which provision has been made in the Budget are given in Appendices I to III of the Budget Memorandum.

20. Against the Revenue deficit of Rs. 3,66.31 lakhs anticipated in the Budget Estimate, 1955-56, the provision included for development schemes is Rs. 4, 86.49 lakhs of which a sum of Rs. 4, 64.61 lakhs represents provision for schemes included in the Five-Year Plan.

New Taxation Proposals

21. The anticipated Revenue deficit is large. The expenditure on social services like education, public health, etc, which is debited to revenue will further increase on account of new schemes to be taken up under the Second Five-Year Plan. It is imparative therefore to augment the revenue resources of the State. The Government have therefore decided to introduce certain additional taxation measures. It is proposed to levy an additional single point tax of 1 anna 6 pies in the rupee on the sales of fine and super fine mill cloth. An additional revenue of about Rs. 40 lakhs per annum is expected from this measures. If it is introduced from the first October next, an additional revenue of Rs. 20 lakhs will be realised in the current year. It is proposed also to levy an additional single point tax on the sales of precious stones which may yield Rs. 2 lakhs in a fully year. It is also proposed to impose ryotwari rates of assessment on inams and if legislation for the purpose is enacted before the next kist season, an additional revenue of Rs. 40 lakhs may be derived in the current year.

Another measure proposed to be introduced is the enhancement of water rates by 25% and the wet assessment in cases where a consolidated rate of assessment including water rates has been fixed, by 18.75%. This measures is also expected to bring in additional revenue of Rs. 40 lakhs a year. The total additional revenue in the current year from these taxation measures may come to Rs. 100 lakhs. In a full year they are expected to yield about Rs. 135 lakhs.

Capital Expenditure

22. A sum of Rs. 1,413.17 lakhs has been provided in the Budget Estimate, 1955-56 for capital expenditure as shown below:-

  Rs. Lakhs
Compensation landholders, etc., on the abolition of Zamindari System


Irrigation Schemes


Dificit Capital outlay on improvement of Public Health


Capital outlay on schemes of agricultural improvements and research


Capital outlay on Industrial Development


Capital outlay on Civil Works


Electricity Schemes


Other items




The Budget estimate,1955-56 includes provision for the following important Irrigation and Electricity Schemes:-
Irrigation :
  Rs. Lakhs
Irrigation :
Irrigation - Nandhikonda Project (Token provision)


Tungabhara project




Works in Scarcity affected areas


Special Minor Irrigation Programme


Upper Pennar Project


Rallapadu Project


Bhairavanithippa Project 10.01
Other items




Electricity :
  Rs. Lakhs
Electricity :








Schemes for increasing employment opportunities




As mentioned earlier, formal sanction of the Nandhikonda Project is expected shortly but preliminary work has already begun. Only a token provision of Rs. 10 lakhs has been made in the Budget, as it has not been possible to estimate the probable expenditure in the current year. When that is available, the House will be approched again for a Supplementary Grant.

Provision has been made for certain new schemes under capital heads also. A sum of Rs. 16.30 lakhs has been provided for the purchase of machinery for the Andhra paper Mills, Rajamandry. Under Buildings, provision has been made for the construction of buildings for office and resdential accommodation of National Cadet Corps Units ( Rs. 4.00 lakhs), construction of permanent buildings for the Engineering College, Kakinada ( Rs. 18.00 lakhs), construction of additional buildings, provision of electric installations, etc, for the General Hospital, Kurnool (Rs. 6.00 lakhs), construction of a building for the District Collector's Office, Srikakulam ( Rs. 8.00 lakhs), construction of additional blocks and other buildings necessary for up grading the sub-jail at Nellore into a District Jail ( Rs. 5.30 lakhs), construction of quarters for the Special Armed Reserve ( Rs. 5.09 lakhs) and construction of quarters for Government servants of the various departments at Kurnool ( Rs. 5.85 lakhs). Under electricity, provision has been made for the extension of supply of power to 23 villages in Bhandar and Gudivada taluks and to ceratin vilages in West Godavari district ( Rs. 4.80 lakhs).

Loans and Advances

23. There is a decrease of Rs. 69.04 lakhs as compared with the Revised Estimate, 1954-55 under' Loans and Advances ( net disburesement)' due mainly to larger recoveries in respect of loans given in previous years and smaller disbursements under loans to handloom weavers' cooperative societies, partly off-set by larger provision for urban water-supply Schemes. The following are the main items for which provision has been made:-

  Rs. Lakhs
1 Advances to cultivators


2 Loans for purchase of chemical manures


3 Loans Municipalities for water supply and drainage Schemes and for other purposes


4 Short term loans to Andhra Co-operative Central Land Mortgage Bank


5 Advances to Weavers' Co-operatives Societies


6 Loans to Co-operatives Buildings Societies


7 Loans under National Extension Services and Community Development Projects and Blocks 49.72
8 Other items 17.96
  Total 479.06
It has been assumed that a total loan of Rs. 17.45 crores will be given by the Government of India in the ensuing year for the following purposes:-
  Rs. Lakhs
1 Loan from the Special Development Fund


2 Grow-More Food Schemes


3 Handloom Industries


4 Chemical Manures


5 Community Development Projects and Blocks and National Extension Services Schemes


6 Power Schemes for increasing employment Opportunities


7 Irrigation Works in Scarcity Areas 132.00
8 Urban Water-Supply Schemes 75.00
9 Gosthani Water-Supply Schemes (Visakhapatnam) 70.00
10 Special Minor Irrigation Programme 50.00
11 Other Capital Expenditures and Debt Head transactions 184.34
  Total 1745.00
On the disbursements side, provision has been made for the repayment of the loan taken from the Government of India for the purchase of chemical manures (Rs. 205 lakhs), installments of principal of loans repayable on the equated payment system ( Rs. 78.12 lakhs) and for this Government's share of the repayment of the Madras 3% loan, 1955 ( Rs. 44.37 lakhs).

Opening and Closing balances

24. On the basis of the figures given above for loans to be taken from the Central Government, capital expenditure, loans and advances, loans to be repaid to the Government of India, etc, the ways and means position will be as follows:-
  Rs. Lakhs
a Opening Balance


b Revenue Deficit


c Capital Expenditure


d Loans from the Union Government


e Repayment of Loans to the Union Government


f Loans and Advances by the State Government (net disbursments)


g Other debt, deposits, etc., Heads(net)


h Closing Balance(a)+(d)-(b)-(c)-(e)-(f)-(g)


If additional taxation measures are introduced as indicated in paragraph 21, its overdraft shown above may be reduced by about Rs. 1 crore, but the opening balance is likely to be less on account of deterioration of the position in 1954-55. A reliable estimate of the closing balance can be given only after the final actuals for 1954-55 become available.


25. The most important feature of the Second Plan is that it has to be built from the village upward. The Central objectives of the Second Plan are in increased employment and production with the object of doubling real income within the shortest period. Our aim is to bring about social change through spread of the cooperative movement in its varying forms and inculcation of the spirit of self-help and mutual help. Instructions have been issued to ensure that build-up of village and district plans becomes a live process, concerned not only with local amenities but also with production, employment and promotion of the welfare of the back ward classes. During the last three months, there has been tremendous activity in our 17, 000 villages and towns in the preparation of the second Five-Year Plan based on the needs of the people. The preparation of the Plan at all levels-village, taluka, town and district--has been completed. Heads of Departments have also prepared plans for the subjects with which they are concerned. All these plans are now under examination and the State Plan-which will be an integration of these various plans--will soon be prepared in draft form. Ours is one of several States in the country and each State is drawing up its own plan. What is envisaged is a national effort intended to promote the most effective and balanced utilisation of the country's resources so as to increase rapidly the level of production and thus of national income. The Government of India have therefore to view the economy as a unity, assess the resources of the country as a whole and allocate them between the Various States and the Centre in a manner calculated to bring about co-ordinate and uniform development throughout the country. It will, therefore, be necessary to have discussions with the Planning Commissions and representatives of the various Central Ministers to finalise the Plan. While we can no doubt expect a certain measure of Central assistance for our Plan projects, particularly in regard to irrigation, power, and other investment projects, development of social services like education, medical relief, etc, will have to be regulated largely with reference to the revenues we can ourselves rice for maintaining such expanded services. After the Plan takes some shape, the House will have an opportunity of discussing it. For the successful implementation of a plan, the active co-operation and assistance of the people is essential. I appeal to you as the elected representatives of the people and, through you, to the people of the State themselves, to lend their whole-hearted co-operation to the government in their efforts.