GOVERNMENT OF ANDHRA PRADESH

BUDGET SPEECH
1962 - 63

K. Brahmananda Reddy
MINISTER FOR FINANCE

Speech of Sri K.Brahmananda Reddi, Finance Minister,
presenting the Budget for 1962-63
to the Andhra Pradesh Legislature
on the 22nd June 1962.

Introduction

Sir,

I rise to present the Budget of the State of Andhra Pradesh for the year 1962-63.

The Hon’ble Ministers will recall that an interim Budget was presented to this House in March 1962, along with the request for a `vote on account’ for a sum of Rs.68.45 crores to enable the Government to carry on the administration till the final Budget was passed by the Legislature. The Budget which I am now presenting deals with the receipts and expenditure of the Government for the full year, 1962-63, and includes the transactions already covered by the `vote on account’.

As usual, the Budget has been framed against the background of the economic situation in the country generally and in the State in particular, and our commitments and aspirations as reflected in the Third Five-Year Plan.

So far as the economic situation is concerned, I am separately circulating a document containing necessary economic data and a review of the principal indicators of economic trends in the State, industrial output, employment, etc. during the year 1961. A perusal of this document will reveal that except for some deterioration in the field of agricultural production, due to unfavourable seasonal conditions in certain parts of the State, the economic situation was, by and large, satisfactory.

There was a fall in acreage as well as production in almost all the principal agricultural commodities. On the other hand, most of the industries registered significant increase in production. The annual average wholesale prices of important agricultural commodities generally showed a mixed trend. Labour situation in 1961 was slightly worse than in 1960 in the sense that the strikes, though less in number, involved more workers and were of longer duration. There was, however, a marked improvement in the employment opportunities and placements actually effected.

Planning and Development

The expenditure target set out in the Second Five-Year Plan of Andhra Pradesh was of the order of Rs.175 crores, against which the actual outlay was nearly Rs.189 crores. Our taxation effort during the Second Plan period was quite satisfactory. The response to our public loans was also encouraging. We were able to fulfill all the principal objectives of the Second Plan in the sense that there was a definite improvement in the level of agricultural and industrial production besides the provision of increased opportunities for employment both for the educated classes in the urban areas and the labour in industries, as well as, rural areas. The experience gained during the first two Plans enabled the State Government to strive for a much larger Third Five-Year Plan. Our Third Five-Year Plan envisages a total outlay of Rs.305 crores broadly allocated under the following heads:-

The allocation of funds under various heads in the State’s Third Five-Year Plan follows, more or less, the principles adopted in the National Plan under the State Sector, the pride of place being naturally assigned to Agricultural and Irrigation Schemes, the next item being development of Power.

Financial Resources:- As regards financial resources required for the Third Plan, was fixed at Rs.48 crores and was later revised to Rs.48.54 crores. In addition, an amount of Rs.3.00 crores was allotted for certain special development schemes for the Telangana area, recommended by the Andhra Pradesh Regional Committee. But in pursuance of the advice given by the Planning Commission and in consideration of the financial resources available for implementing the Plan, it was decided to include the schemes also in the Plan within the ceiling of Rs.48.54 crores. The Plan was accordingly revised and a sum of Rs.26.77 crores was allotted for Andhra region and the balance of Rs.21.77 crores for Telangana region.

The Annual Plan for 1962-63 contemplates a total outlay of Rs.49.97 crores of which Rs.16.00 crores will be on Revenue Account and the balance of Rs.33.97 crores will be on Capital Account including loans and advances. The allocation of this outlay under principal heads of development is as follows

In addition, a sum of Rs.3.33 crores will be spent on centrally sponsored schemes under the following heads of development.

Progress of the Plan

Among the Budget papers which have been circulated, the Hon’ble Members will find a note indicating the progress made in the various fields during the first year of the Third Five-Year Plan, i.e., 1961-62. I shall content myself with mentioning the salient features of our achievements in the different fields.

Agriculture:- An area of 28.92 lakh acres was covered under the programme for control of pests and diseases and 700 hand-operated sprayers and dusters and 1.56 lakhs seedlings were distributed during the year. The quantity of rural compost produced was 94.98 lakh tons as against the target of 100.43 lakh tons. The soil conservation programme was extended to 27,149 acres while 52,000 acres were brought under consolidation of holdings. Loans under the New Well Subsidy Scheme were advanced for sinking 5,995 wells.

Animal Husbandry:- Besides opening 10 stationary and 17 rural veterinary dispensaries, the Department was also able to establish 3 cattle-cum-dairy farms and 6 training centres for imparting training to farmers. The Integrated Milk Supply Scheme for Hyderabad and Secunderabad towns also made considerable headway.

Forests:- The progress of work on the laying of the Zoological Park in Hyderabad was satisfactory. The Department was also able to lay 52 miles of forest roads during the year while teakwood, casuarina, matchwood and eucalyptus plantations and red sanders were raised over an area of 5,088 acres against the original target of 4,983 acres.

Fisheries:- Besides training the departmental officers and fishermen, the Department’s programme for construction of 30 mechanised boats was completed during the year. The expanded nutrition programme was also introduced in 8 Blocks. In order to encourage pisciculture, the Department distributed 26.88 lakh fingerlings, 7.11 lakh fry and 14.23 lakh fish seeds.

Co-operation:- Seven hundred and sixty two new village co-operative societies were started during the year thus raising the total number of societies in the State to 15,676 with a membership of 17.75 lakhs. Short term and medium term credit facilities extended to the members were of the order of Rs.20.33 crores.

Community Development:- The Community Development Programme has already been extended to 24,417 villages comprising an area of 83,415 square miles and a population of 237 lakhs. The total number of Blocks so far established is 378, as follows:-

Power:- The schemes for generation of electric power have suffered a serious setback due to difficulties in the sanction and timely release of foreign exchange required for importing machinery and delays in the technical clearance of the schemes by the Central Water and Power Commission. The Plan for power development provides for the completion of 7 schemes---4 continuing schemes and 3 new schemes -- designed to increase the installed generating capacity by about 460 MW. Of the 4 continuing schemes, the Tungabhadra Hydro-Electric Scheme and Tungabhadra Nellore Hydro-Thermal Scheme for which necessary foreign exchange has been released are likely to be commissioned in 1963 or 1964 but no substantial progress could be made on the Upper Sileru Hydro-Electric Scheme mainly because of certain objection raised by the Orissa Government. It is expected that these difficulties will be overcome within the next few months.

The Telangana Hydro-Thermal Scheme is also being delayed for want of technical clearance from the Central Water and Power Commission and import license. As regards the 3 new schemes, the work on Srisailam Hydro-Electric Scheme has been suspended pending the report of the Gulhati Commission while the Ramagundam Thermal Extension Scheme and the Kothagudem Thermal Scheme are expected to be completed and commissioned by 1965 and 1966, respectively.

In the circumstances, therefore, the first year of the Third Plan was devoted to work on transmission and distribution lines, rural electrification and Telangana Hydro-Thermal Scheme, besides from preliminary works relating to Tungabhadra Hydro-Electric Scheme 2nd stage, Srisailam Hydro-Electric Scheme and Kothagudem Thermal Scheme. The preliminary survey of Upper Sileru--Nagarjunasagar 220 K.V. lines was completed. Orders were placed for the erection of Hampi-Gooty-Cuddapah 132 K.V. line and additional boilers at Ramagundam Power House. The survey of the 198 mile long Tadepalli Hyderabad line was completed and erection work started. Progress was also made on the erection of 60 mile long Hyderabad-Siddipet 66 K.V. line. During the year, electricity was extended to 395 villages in Andhra and 306 villages in Telangana.

As a result of the power shortage, heavy industries have been asked to cut down their demand during the peak load hours as the Board is unable to release supply to new industrial, agricultural and other consumers are freely as desired. In order to meet the situation, the Government of India have been requested to expedite sanction of foreign exchange, import licenses etc., for approved schemes so that there is no delay in their execution. The Government of India have also been requested to sanction the installation of additional thermal units at Kothagudem and Ramagundam over and above the Plan schemes. These will, however, take a few years. Meanwhile, the following steps have been taken to meet the immediate situation.

(a) Rationing has been introduced in the Telangana area of the State.

(b) All the available diesel sets have been pressed into service. The old system stations at Vijayawada and Visakhapatnam are being run to capacity and their output is being fed into the grid.

(c) The periodical overhaul of the generating plant is postponed and every available set is being utilised.

(d) The annual overhaul and inspection of boilers has been staggered so that all the boilers are available for service during the period when the output from the hydro stations is low.

(e) The industrial loads are staggered wherever possible.

(f) Arrangements have made with the Government of Madras:

(i) to discontinue supply being given by this State to Madras from Chittoor, from 10th June 1962; and

(ii) for the supply of 2,000 K.W. power by Madras to this State.

(g) The Government of India were requested to sanction foreign exchange for the purchase of two 11-MW gas-turbo generators which can be erected and commissioned within a short time. They have accepted the request.

Industries:- The Industrial Development Corporation and the Mining Corporation are making steady progress and I shall presently give some ideal of their achievements so far. The expansion programme of the Andhra Paper Mills could not proceed according to the original schedule due to exchange difficulties and delay in the preparation and finalisation of drawings, etc., for the factory building. Machinery worth about Rs.1 crore has, however, been received partly last year and partly in the current year and the rest of the items are also expected to be received during the course of the year. Special steps are being taken for expediting the construction of buildings and installation of machinery so that the factory may go into production by the middle of next year. It has also been decided that the Andhra Paper Mills, which are at present being managed as a departmental undertaking, should be converted into a joint stock company with a Board of Directors consisting of officials and non-officials. The scheme also contemplates private participation in the new company on a minority basis.

Small Scale Industries also made considerable headway. The Department was able to complete the construction of 16 factory buildings at the Cuddapah Industrial Estate and 18 buildings each at the Industrial Estates at Sanathnagar and Chandulal Baradari. A separate Corporation was set up for the promotion and development of small scale industries, to which Government have subscribed a sum of Rs.20 lakhs towards share capital and Rs.35 lakhs as loan.

The programme for development of Handloom Industry included admission of 620 new members and 1,552 new looms, opening of 2 Inter-State Marketing Depots, construction of 535 houses and supply of 10 carding machinery, frame looms, warping machinery, etc., besides distributing a sum of Rs.33 lakhs towards rebate.

In spite of initial difficulties in some cases, the Co-operative Sugar Factories also made steady progress during the year and Government also contributed a further sum of Rs.15 lakhs towards share capital of these factories.

Education:- Important achievements in the field of education include:

(i) introduction of compulsory primary education,

(ii) opening and upgrading of a large number of elementary and secondary schools,

(iii) appointment of nearly 5,000 new teachers, and

(iv) provision of mid-day meals for school-going children.

Mid-day meals are being provided under two separate schemes. One is the "UNICEF MILK DISTRIBUTION SCHEME" which will operate in the Rayalaseema and Nellore districts covering about 1,52,000 primary school children. The other scheme will be implemented in collaboration with the organisation called "CARE" and will cover about 1,50,000 children in the Telangana districts and 50,000 children in 60 selected Panchayat Samithis in the Circar districts of Andhra.

As regards University education, one Government College of Arts and Science was opened at Chittoor, besides establishing a Tagore Chair in the Osmania University. U.G.C. pay scales were extended to teachers of all Government and aided colleges.

In the case of Technical Education, the accent under the Third Plan is mainly on consolidation of what was done during the Second Plan. However, it was possible to open two Girls’ Polytechnics at Hyderabad and Kakinada and one more Polytechnic at Srikakulam.

A Sainik School has also been started at Korukonda.

Health:- The programme to provide larger hospital accommodation and improvement of the services in hospitals was carried out successfully. An infectious diseases hospital was started with 24 beds. The bed strength of the M.G.M., Hospital, Warangal was increased from 80 to 150 and the bed strength of Gandhi Hospital, Secunderabad was increased fro 400 to 450. The bed strength of the district headquarters hospitals was also increased from 1,128 to 1,476 and that of Taluk headquarters hospitals from 276 to 509. During the year, 17 Primary Health Centres were opened. 4 Dental clinics and 9 Family Planning clinics were also opened besides establishing 3 Leprosy Subsidiary Centres. Under the National Malaria Eradication Programme, 16 Hypo Units and 4 Hyper Units in Andhra and 8.5 Hypo Units and 3 Hyper Units in Telangana were continued. 34 Rural Family Planning clinics were opened against the target of 54 clinics. Five Ayurvedic dispensaries--2 in Andhra and 3 in Telangana and 4 Unani dispensaries--two each in Andhra and Telangana were started and ad hoc grants were sanctioned to various institutions functioning under the Homeopathy, Naturopathy, Ayurvedic and Unani systems. The bed strength in the maternity ward of the Nizamia Hospital, Hyderabad was increased by 20. Pre-professional courses in Ayurveda and Unani were started in the Government Ayurvedic College and the Nizamia Tibbi College.

Housing:- Under the Low Income Group Housing Scheme of Co-operative Sector, 312 houses were completed and 787 houses were in difficult stages of construction. The Housing Board has also implemented the Low Income Group Housing and the Slum Clearance Schemes in the twin cities of Hyderabad and Secunderabad. 267 houses under Low Income Group Housing Scheme and 38 single room tenements under Slum Clearance Scheme are under construction. In the Government sector also, loans were given for the construction of 68 houses under the Low Income Group Housing Scheme.

Labour Welfare:- Under the Labour Welfare schemes, three Welfare Organisers were deputed for training in the short-term course for organisers of Community Welfare Centres at the Tata Institute of Social Services, Bombay. The construction of building for the Institute of Industrial Safety and Productivity has been completed. Six Employment Market Information Centres--4 in Andhra and 2 in Telangana were started. Besides, one University Employment Bureau, 5 Vocational Guidance Units, 7 Employment Information and Assistance Bureaux were also established. 450 additional students were admitted into the various Industrial Training Institutes during the year. Under the Employees’ State Insurance Scheme, 4 dispensaries were opened and 6 ambulance cars were purchased for use in the Employees’ State Insurance dispensaries besides upgrading 2 of the existing E.S.I., dispensaries.

Water Supply:- In order to provide clean drinking water facilities and drainage systems in the urban areas, a sum of Rs.110.84 lakhs was spent during the year. Among the Schemes taken up under this programme, the Manjeera Water Supply Scheme and Tadipudi Water Supply Scheme are the two important schemes intended for improving the water supply position in the industrial cities of Hyderabad and Visakhapatnam, respectively.

Social Welfare:- The programme of Social Welfare mainly consists of activities designed for the educational, social and economic uplift of Scheduled Castes, Scheduled Tribes, Vimuktajatis and other Backward Classes and also includes a few general welfare measures for all communities. The programme for Scheduled Castes envisages provision of educational facilities, by way of opening hostels, grant of scholarships, monetary aid for books and stationery to students, provision of mid-day meals to school-going children, drinking water wells, sanitary amenities, community halls, measures for removal of untouchability, etc. There is also a centrally sponsored scheme for the improvement of working conditions of persons engaged in unclean occupations including eradication of the practice of carrying night soils as head loads.

Scheduled Tribes lead a distinctly different and segregated life and the problem of their uplift, therefore, needs special attention and proper planning of programmes covering all aspects of their life, such as, education, public health, communications, agriculture, etc. A number of schemes dealing with all these aspects are already in operation and are making steady progress. Government has also set up a non-official Committee to enquire into the living conditions of tribals in plain areas and its report is now under consideration.

The scheme for the welfare of Vimuktajatis includes supply of ploughs, bullocks and carts, sinkingof drinking water wells, construction of houses, maintenance of special schools, women welfare centres, scholarships, boarding grants, etc. There are similar schemes for other backward classes.

It has been suggested in several quarters that the Social Welfare work entrusted to the Zilla Parishads may be taken over by Government. The matter is receiving consideration.

Third Finance Commission

As a result of the Award of the Third Finance Commission, the revenue estimates for 1962-63 are expected to improve by about Rs.6.5 crores as compared to the Budget Estimates for 1961-62. Of this, Rs.50 lakhs are earmarked for improvement of maintenance standards of roads which nearly half of the remaining amount has already been utilised for meeting the additional liability on account of revision of salaries. The rest of the additional income is required for meeting the increased cost of servicing of debt and the normal growth of expenditure. Nor portion of the additional income accruing to the State as a result of the Award of the Third Finance Commission can thus be said to be available for development activities.

Accounts for 1960-61

Receipts on revenue account and revenue expenditure for the year 1960-61 were Rs.85.29 crores and Rs.84.98 crores, respectively, thus resulting in a revenue surplus of Rs.31 lakhs. Capital outlay for the year amounted to Rs.32.10 crores, while public debt rose by Rs.33.47 crores. The transactions under deposits, advances and other debt heads registered a net outgoing of Rs.1.70 crores.

Revised Estimates for 1961-72

Revenue Receipts:- The original Estimates for 1961-62 provided for a total revenue of Rs.85.13 crores against which the Revised Estimate has now been placed at Rs.87.54 crores. The increase of Rs.2.41 crores under revenue receipts has mainly occurred under State’s share of income tax (Rs.98 lakhs), sales tax (Rs.110 lakhs), industries (Rs.48 lakhs), forests (Rs.37 lakhs), motor vehicle tax (Rs.25 lakhs), and Central grants (Rs.197 lakhs), counter-balanced by decreased under land revenue (Rs.41 lakhs), stamps (Rs.159 lakhs), and other miscellaneous heads (Rs.74 lakhs). The fall under stamps revenue was due to adjustment of arrears of the share of local bodies which had accumulated over a period of years.

Revenue Expenditure:- The Budget Estimates for 1961-62 had placed the total revenue expenditure at Rs.87.63 crores. The Revised Estimate is Rs.93.31 crores. There is thus an increase of Rs.5.68 crores. Principal items responsible for this increase in expenditure are, revision of pay scales as a consequence of merger of dearness allowance with pay, liberalisation of pension rules and increased grants to Zilla Parishads and Panchayat Samithis for balancing the budgets of schools under their management. Government also sanctioned substantial amounts for providing adequate and timely relief, in various forms, to the people affected by adverse seasonal conditions.

Revenue deficit:- The Revised Estimates for 1961-62 reveal a revenue deficit of Rs.5.77 crores as against Rs.2.50 crores contemplated in the original Estimates.

Capital Expenditure:- Capital Expenditure for the year amounted to Rs.31.49 crores.

Public Debt

The outstanding permanent public debt at the beginning of the year was Rs.205.18 crores. During the year, the Government floated an open market loan of Rs.10.00 crores which was over-subscribed to the extent of about Rs.1.00 crore. State’s share in small savings brought in about Rs.1.50 crores, while Central loans for plan schemes and other development purposes were of the order of Rs.42.63 crores. A sum of Rs.16.22 crores was utilised for discharging the liability on account of Central loans and other loans which fell due for repayment during the year. Public debt liability rose by Rs.38.91 crores at the end of March, 1962.

Deposits, etc.

The transactions under floating debt, deposits, loans and advances and other debt heads resulted in a net outgoing of Rs.10.30 crores.

Cash Balance

The year had opened with a balance of Rs.1.50 crores and was expected to close with a minus balance of Rs.7.15 crores.

Budget Estimates for 1962-63

Revenue Receipts:- I now turn to the Budget proposals for 1962-63.

The Budget Estimates for 1962-63 envisage a total revenue of Rs. 115.47 crores as against the Revised Estimate of Rs.87.54 crores, made up of:-

Changes in classification, which are responsible for a variation of Rs.12.03 crores next year, mainly consist of the transfer of the working expenses of commercial and quasi-commercial departments of Government, such as, Electricity and Irrigation Schemes, to the expenditure side. In the past, working expenses were shown as reduction of gross earnings.

Revenue Expenditure:- The Budget provides for an expenditure of Rs.113.72 crores on Revenue Account as against Rs.93.31 crores in 1961-62 which is broadly classified under the following heads:-

The increase in the ordinary revenue expenditure has occurred primarily under debt services (Rs.97 lakhs), salaries due to revision (Rs.240 lakhs), interim relief to Village Officials (Rs.71 lakhs), Medical (Rs.23 lakhs), Public Works (Rs.21 lakhs), Land Revenue (Rs.36 lakhs), recoupment of advances sanctioned in 1961-62 from the Contingency Fund (Rs.31 lakhs) and normal growth of expenditure under other heads (Rs.103 lakhs).

The variations under plan expenditure do not call for any special remarks.

The Budget provides for increased grants for the following purposes as compared to Budget Estimates 1961-62:-

Rs. lakhs

(1) Maintenance of roads 50

(2) Construction of roads in sugarcane areas 10

(3) Grants to Zilla Parishads and Panchayat

Samithis under Secondary and Primary

Education 300

The following special grants have also been repeated in the Budget for 1962-63:

Rs. lakhs

(1) Loans to Panchayat Samithis 9.00

(2) Grant-in-aid to Hyderabad Municipal

Corporation 10.00

(3) Relief of unemployment in the twin cities

of Hyderabad and Secunderabad 10.00

(4) Compensation to Municipalities for loss

of income due to abolition of tolls 16.00

(5) Office Buildings for Zilla Parishads 16.00

(6) Exemption of students belonging to

Scheduled Castes, Scheduled Tribes,

etc., who enjoy full fee concession

from payment of special fees for

games, etc. 5.00

(7) Grants to the Sahitya, Sangeet Natak

and Lalita Kala Akademis 2.25

(8) Grant to Sports Council 2.00

Adequate grants have been provided for welfare activities for Scheduled Castes and other Backward Classes, both under the Plan and non-Plan budgets, as shown below:-

The increase in the Revised Estimates as compared to the Budget Estimates under the Plan heads was due to the diversion of non-recurring savings from other Plan heads. It is expected that it would be possible to make some increase in the current year's Plan provisions also by diverting savings from other heads towards the latter part of the year.

Adequate provisions have also been made in the Budget for giving financial assistance to the Zilla Parishads and Panchayat Samithis in order to enable these democratic institutions to meet their growing needs. These are distributed under different heads as follows:-

A number of steps have already been taken in recent years for extending financial assistance to students, particularly those belonging to Scheduled Castes and Backward Classes as well as boys and girls of economically backward families.

It is now proposed that the Government should accept full responsibility for financing the higher education of brilliant boys and girls the income of whose parents does not exceed Rs.300 per mensem and who secure distinction in the P.U.C. and other equivalent examinations. I am sure this will go a long way in developing the inherent talent of our brilliant boys and girls.

Rural Water Supply Scheme:- The National Water Supply Scheme which was operated during the Second Plan period has since been given up by the Government of India and funds for Drinking water Supply in rural areas are now provided under the Local Development Works Scheme. In the current year there is a grant of Rs.41 lakhs for this State which is proposed to be utilised wholly for drinking water supply schemes only. In addition, Rs.40 lakhs will be made available from out of the Equalisation Grant, and another Rs.10 lakhs from the Community Development budget. Government have also allotted Rs.10 lakhs for grants to Village Panchayats for providing drinking water facilities. During 1962-63, therefore, it will be possible to undertake schemes to the extent of Rs.1.01 crores.

Steps are also being taken to enhance the total plan provision of Rs.18.26 crores for minor irrigation by Rs.8 to 10 crores by internal adjustments in the Plan, since minor irrigation works are well-diffused all over the State and are particularly useful for areas which are not served by protected irrigation facilities.

Tube Wells:- It is also proposed to examine the possibilities of providing Tubewells, capable of irrigating 150 to 250 acres of land by utilising underground water sources, particularly in the drought-affected areas.

Irrigation Wells:- The Budget provides a sum of Rs.48 lakhs for granting subsidy for irrigation wells at the rate of Rs.750 per well. It is proposed to formulate a draft plan for providing one irrigation well for every family in the dry and drought-affected areas. Preference will, however, be given to small farmers and care will be taken to see that no family gets more than one such well and that the scheme is first introduced only in the areas nor covered by any existing irrigation scheme or schemes which are likely to be undertaken in the near future.

Revenue Surplus:- The estimates after taking credit for an additional revenue of Rs.5 crores from new taxes reveal a surplus of Rs.1.75 crores which will be utilised for meeting the deficit on Capital Account.

Capital Outlay

Capital outlay on the Plan and Non-Plan Schemes next year will be Rs.29.81 crores.

Hon’ble Members will be interested to know the principal items of capital programme. These are:-

Instructions have also been issued to increase the outlay on the following three projects in order that the work may be accelerated:

Loans and Advances

Disbursements on account of Loans and Advances under various heads are expected to be of the order of Rs.15.92 crores, the principal items of which are:

Public Debt

It is proposed to raise an open market loan of Rs.10 crores this year. Our share of small savings will yield about Rs.3 crores while Central loan assistance for Plan Schemes etc., will be of the order of Rs.32.11 crores. After providing Rs.14.90 crores for the repayment of various loans, the net addition to permanent public debt would be Rs.30.21 crores thereby raising the outstanding debt to Rs.274.30 crores on the 31st of March 1963.

Debt, Deposits, etc.

The receipts and disbursements under loans and advances deposits and other debt head transactions are expected to result in a net outgoing of Rs.1.31crores.

Cash Balance

The year is likely to close with a balance of (-) Rs.6.31 crores as against the opening balance of (-) Rs.7.15 crores.

Industrial Development Corporation

The Andhra Pradesh Industrial Development Corporation Ltd., was set up by the State Government last year with an authorised capital of Rs.3 crores and an issued capital of Rs. one crore, for promoting rapid industrialisation of the State through financial aid to industry in the form of loans, guarantees, etc., participation in share capital of private industry and direct promotion of selected industries, if necessary, by acting as a holding company for specific projects.

The Corporation has taken in hand ten selected industries for investigation with a view to direct promotion. The total estimated cost of these ten projects comes to about Rs.19.65 crores. The Corporation has already obtained licenses for two industries, namely, Gas Cylinders and Ball Bearings. Four more licenses in respect of electric motors, glass products and high tension and low tension insulators are expected to be received shortly. The other cases are still under process. There is also a proposal to establish a small-scale iron and steel plant in Andhra Pradesh. A Technical Committee constituted by the Government of India is examining the feasibility of this project.

So far, the Corporation has received 16 applications from industrial concerns for financial assistance by way of:

Mining Corporation

The Andhra Pradesh Mining Corporation has been set up as a wholly State-owned undertaking for the systematic prospecting and exploitation of various minerals in the State and also for the promotion of mineral based industries in collaboration with the private sector wherever possible.

The Corporation started regular functioning about a year ago. It is at present engaged in the exploitation of the iron-ore reserves in Krishna district for export through the State Trading Corporation of India. Mining operations in this area commenced in the last week of December, 1961, and so far over 1,00,000 tons of iron-ore have been raised and about 35,000 tons of ore valued at about Rs.17 lakhs have been exported from Kakinada and Masulipatnam ports. The Corporation has also schemes for the exploitation of other iron-ore deposits, manganese ore, limestone, marble, clay, barytes and several other minerals, and for the prospecting and detailed investigations of valuable minerals like asbestos, copper and graphite.

On the processing side, the Corporation is considering schemes for setting up Lime Calcination Plant, Clay Washing Plant, Marble Processing Plant and other medium scale industries based on the mineral resources of the State.

The authorised capital of the Corporation is Rs.50 lakhs. The State Government have so far subscribed Rs.13.3 lakhs and another Rs.6.7 lakhs is proposed to be provided in the next few months. Apart from this, the programme of work drawn up by the Corporation requires a further capital of about Rs.45 lakhs of which a sum of Rs.20 lakhs would be required in the current year itself. It is expected to meet these requirement out of savings form other schemes.

The turnover on the minerals produced by the Corporation during the current year is expected to be about Rs.75 lakhs, and this is likely to increase in the succeeding years as the operations of the Corporation expand.

State Financial Corporation

During the year 1961-62, the State Financial Corporation sanctioned loans aggregating Rs.98.83 lakhs to 105 industrial concerns in the State and also liberalised its terms of assistance to Small Scale units established in the Industrial Estates, in the matter of margin and the period of loans.

The Corporation has raised its lending rate from 61/2% to 7% per annum subject to a rebate of 1/2% on installments and interest paid on due dates.

The income of the Corporation, after providing for working expenses, etc., is still insufficient for paying the minimum guaranteed dividend and Government will have to pay a subsidy of Rs.2.25 lakhs for the year 1961-62.

Allwyn Metal Works

The Hyderabad Allwyn Metal Works Limited, Hyderabad, decided to issue 8,60,655 New Equity Share of Rs.10 each to enable them to implement their expansion programme. The Company offered 4,24,585 New Equity Shares to the Government as right shares on their existing holdings of 1,69,834 equity shares of Rs.10 each. In order to maintain our present percentage shareholding in order to maintain our present percentage shareholding in the company it was decided to subscribe to the right shares offered by the Company and accordingly we have purchased 4,24,585 New Equity Share of Rs.10 each at a cost of Rs.42,45,850.

State Life Insurance Fund

The business of the State Life Insurance Fund has been expanding rapidly as a result of the extension of its scope to the employees in Andhra area. At the end of March, 1962 the number of policies already in force was 48,320 while the total volume of business amounted to Rs.5.31 crores. A vigorous drive has been started to see that all eligible Government servants get themselves insured with the Fund as quickly as possible and it is expected that the volume of business will eventually exceed Rs.10 crores.

Old Age Pensions

The Old Age Pension Scheme which was introduced in November, 1961 contemplated grant of life pensions to old destitute persons of 70 years and above and also to those who are totally incapacitated to earn their livelihood at rates ranging from Rs/15 to Rs.25 per mensem according to the areas to which they belong. It is now proposed to reduce the age limit to 65 years.

Non-Gazetted Officers’ Demands

The Pay Scales for Non-Gazetted Officers were revised in 1958 and again last year when the dearness allowance was merged with the basic pay. These two revisions together with the expenditure on financial assistance to local bodies and aided institutions for revising their salaries, and the additional burden on account of interim relief to the Village Officials, have cost the Exchequer to the extent of about Rs.8 crores per annum. Even so, it is being represented by Non-Gazetted staff that prices of important foodgrains and other commodities have been rising and that rates of dearness allowances should be modestly increased at least to staff getting below Rs.150. The financial position and our commitments and programmes on the development side are such that it is well nigh impossible to make any such concession now. However, Government may consider in the coming years.

Time and again it is said on the floor of Legislature and outside that some real anomalies have crept in, in the two revisions of pay scales. While Government think that there may be only somesuch cases, still to clear any misunderstanding the Government have decided to appoint the Secretary, Planning, and the Secretary, Finance to look into the alleged anomalies in the pay scales arising out of the revision of salaries sanctioned last year and it will be our endeavour, on their recommendations, to remove these anomalies as far as possible within the next few months.

To arrest the rise of prices and to provide important items of consumption like foodgrains etc., at cheaper rates than in the open market, the Government have thought it worthwhile to organise Employees’ Consumer Co-operative Stores at important towns. The scheme is being worked out..

Ways and Means

As I have already mentioned earlier, the actually outlay on the Second Five-Year Plan was of the order of Rs.189 crores as against the original estimate of Rs.175 crores thus resulting in excess expenditure of Rs.14 crores. This has naturally caused considerable strain on the financial resources of the State with the result that on the 1st April, 1961, we had started with a substantial overdraft on the Reserve Bank of India.

The estimate of resources for the Plan Schemes in 1961-62 provided for a market loan of Rs.12 crores which was later reduced to Rs.10 crores. Actual collections amounted to about Rs.11 crores. There was thus a shortfall of Rs.1 crore under this head. The collections under small savings also did not materialise to the extent originally contemplated. Substantial amounts were also spent on relief of distress in the areas which suffered from adverse seasonal conditions which also incidentally led to suspension and remission of considerable amounts of land revenue. We could not raise any fresh taxes last year and the total amount which we could find for the Plan was just about Rs.10 crores which together with the Central assistance of Rs.31 crores made a total of Rs.41crores as against the Plan outlay of Rs.48 crores. There was , thus an overall shortfall of Rs.7 crores in the Plan resources last year which is reflected in the (minus) opening cash balance.

As regards 1962-63, we have to raise at least Rs.17 crores as our share of financial resources for the Plan. It is proposed to issue a public loan of Rs.10 crores. Another Rs.2 crores are expected to be found by collection of arrears of Land Revenue, Excise, Sales Tax and Taccavi loans and the balance of Rs.5 crores will have to be raised through fresh taxes. This will be just sufficient for executing the Plan of Rs.50 crores. At this rate, it will be difficult to fulfill the Plan target of Rs,305 crores. It is, therefore, imperative that we should spend at least Rs.55 crores in 1962-63, which will also provide the necessary room for accommodating higher outlay on Electricity schemes, Nagarjunasagar Project, Water Supply Schemes for the urban and rural areas and other essential projects. But the Planning Commission can be persuaded to agree to this increase in the Plan only if we can raise about Rs.2 to 21/2 crores of additional resources on our side. Let us hope that it will be possible to do so.

Rationalisation of Tax Structure

Sales tax:- A review of the administration of the existing Sales Tax Act has revealed that there is considerable room for improvement and rationalisation of the rate structure and simplification of procedures, etc. Government have, therefore, requested the Council of Applied Economic Research, New Delhi, to enquire into the working of the system of sales tax in the State, and make recommendations having in view the objective that the reforms suggested, while improving the current level of receipts from sales tax, should not affect the trade adversely. Dr.P.S. Lokanandhan, Director-General of the National Council of Applied Economic Research, New Delhi, has agreed to undertake this survey. Government will take final decisions in the matter after the report of Dr.Lokanadhan is received. This will, however, take sometime and may not yield any results till after the close of the year.

Land Revenue:- The existing rates of land revenue assessment, which were settled some 30 to 40 years ago, bear little or no relation to the productivity of the land, the value of land, or the price which the cultivators are getting for their produce. The Anantaram Committee expressed the view that there was no significant difference in the pitch of dry assessments in the Andhra and Telangana regions, that these assessments should be reviewed once in five years to coincide with the Five-Year Plans and that such review should be based on agro-econoimic factors and price fluctuations. The Committee also felt that progressive monetization, rapid development of internal transport, increasing commercialisation of agriculture and general change in the All-India Commodities Market, had tended to reduce the incidence of land revenue. The Taxation Enquiry Commission appointed by the Government of India and the Land Revenue Reforms Committee appointed by the Government of Madras in 1951 had also expressed similar views. The Anantharaman Committee also came to the conclusion that there was a great disparity in the pitch of wet assessments in the Andhra and Telangana areas of the State and that there was thus a need to have uniformity in the assessments in the entire State commensurate with the increase in price levels, irrigation and other facilities provided by the Government from time to time.

Apart from the land revenue collected on land, there are at present some special levies, like the special assessment on commercial crops and surcharge on dry assessments. There has been a complaint that lands are subjected to levy of multiple taxes by various special enactments, leading to confusion in the computation of the total land revenue a ryot has to pay, and that it would be fair and less complicated and easily intelligible to the ryot if the tax is levied in lumpsum by a single Act.

It has, therefore, been decided to abolish the special levies, like the special assessment on commercial crops and surcharge, and to increase the basic rates of assessment. A Bill to that effect has already been published and is being introduced in the current session of the Legislature. The Bill provides for assessments being increased having regard to the various types of land and the substantial concessions given by the abolition of the above special levies.

Motor Vehicles Tax:- At present there are three different Motor Vehicles Taxation Acts operating separately in the Andhra and Telangana regions and the areas recently transferred from Madras. The incidence of tax is also different under these three Acts. Government is, therefore, contemplating the introduction of an integrated legislation providing for uniform rates of taxes, procedures, etc., in all the districts of the State

Conslusion

I have tried to give a complete picture of our achievements, aspirations and difficulties. I do not claim that the success in all fields has ben altogether unmixed. But I can assure the Hon’ble Members that no efforts have been spared by the Government for securing the best possible advantages out of the first two Plans which have already been implemented and the Third Plan which is now on hand. Apart from the difficulties in the matter of strengthening and gearing up of the administrative machinery to cope with the new demands and shortage of equipment and foreign exchange, our main problem is that of finance. We are committed to raise a sum of Rs.105 crores during the Third Plan period as our contribution to the plan of Rs.305 crores. Of this sum of Rs.105 crores, open market loans, revenue surpluses etc., are expected to yield about Rs.60 crores. The rest has to be found by fresh taxes. The assistance we get by the Award of the Third Finance Commission will only reduce our other unavoidable commitments. As I mentioned on a previous occasion, we have already lost a year of the Third Plan period and unless Hon’ble Members approach this responsibility in a realistic manner, our many-sided development programmes which are the foundation for the progress of the community, will suffer. I earnestly seek sympathetic consideration and co-operation from all Hon’ble Members in the fulfillment of our obligations. The people of Andhra Pradesh have, in the past, always risen to the occasion and cheerfully contributed to the coffers of the State in the share of taxes and loans, and I am also confident that the additional levy in the shape of Land Revenue and other taxes which are proposed to be introduced in due course, and which are all fully justified on economic and other considerations, will be accepted by our people in the same spirit in which they have been co-operating with the Government in the past. Elsewhere, I have submitted that Government want to increase the outlay of the current year to Rs.55 crores to provide more funds for Nagarjunasagar, Srisailam, Pochampad, Tungabhadra High Level Canal, power , minor irrigation, urban and rural water supply, eradication of malaria., etc., which are vital. I am sure Hon’ble Members will enable the Government to meet these aspirations and before I close I pray to God that He may give us all, the strength and wisdom to face the situation courageously and fulfill our obligations to the people.