Previous Budget Speeches


Budget Speech

Speech of
Sri.N.Ramchandra Reddy,
Minister for Finance and Commercial Taxes

presenting the Budget for 1974-75
to the Andhra Pradesh Legislature
on 18 th March, 1974.



I rise to present the Budget of Andhra Pradesh for the year 1974-75.

As Hon’ble Members are aware, the Legislature is meeting only for a brief period in view of the ensuing By-elections to the State Legislature, in April, 1974. I am , therefore, now seeking only a "Vote-on-Account" for a period of 4 months, so that the administration is placed in sufficient funds till such time that we are able to meet again for detailed consideration of Budget later during the year.

Before I attempt to set out the policy objectives to which this Government is committed and spell out the broad programmes under major sectors for development, I think, it behoves on me to present the state of the economy in retrospect and the prospects before us in the coming year. The year 1972-73 was bad year for the economy of the State since as a result of serious drought conditions there was a net decline in the State income. However, with the seasonal conditions being good and with the gradual restoration of normalcy in 1973-74 the stage was set for a significant revival. The production of food-grains in Kharif-1973 is estimated to have touched the highest level so far of about 57 lakh tonnes. Rabi prospects, except in isolated tracts of Srikakulam, Visakhapatnam and Warangal districts are also promising. It is expected that in the current year, the production of food-grains will touch a record level of over 80 lakh tonnes.

This encouraging performance is, however, not shared by the secondary sector, where the picture is not so reassuring. The Index number of Industrial production (Base: 1960-100) which was 303 in 1971-72 and 281 in 1972-73 slumped to 262 thus neutralizing to some extent the increase in State Income as a result of a high level of agricultural production. The steep fall in the availability of agricultural raw-materials to agro-based industries as well as the serious power shortages experienced during the year are the main casual factors for the declaration in the manufacturing sector. However, the rise in State Income in 1973-74 (provisional ) was 5.9% over 1972-73.

While on the subject of the state of the economy, I cannot ignore making a reference to the sharp increases in prices in the recent past, though the major instruments for controlling price inflation are not with the State Government and the spiralling prices are part of a national, in fact, world-wide phenomenon. While the rise in the consumer price index was somewhat less for Andhra Pradesh compared to All-India, being 244 for Andhra Pradesh for the month ending December, 1973 compared to 260 for All-India, I would agree that this in itself is no reason for consolation or complacence. The State Government have therefore initiated a series of measures to arrest this disturbing trend to which I shall refer to at some length. As a first step to sustain a viable public distribution system, vigorous efforts have been made to procure paddy and rice so that the State is ensured of an adequate buffer at its disposal. A scheme of Producers and Millers Levy has therefore been introduced with a procurement target of l6 lakh tonnes for the year against which a quantity of l5.10 lakh tonnes of rice has already been procured. Government are well aware that the significant gains made by way of increased food-grains production can be nullified by an inefficient and unresponsive distribution system more so in a period of rising prices when a scarcity psychosis is created . Therefore the public distribution machinery both in its regulatory and enforcement aspects has been strengthened.. Government have authorized the Collectors to open 13,320 Fair Price Shops all over the State so as to ensure proper distribution of controlled commodities on the card system. For this, the Government have also issued the Andhra Pradesh Scheduled Commodities (Regulation of Distribution by Card System) Order, 1973. There has been all-round strengthening of the Civil Supplies staff, more particularly, the Enforcement Wing headed by a Superintendent of Police (Vigilance Cell). The check posts at the State Borders have also been strengthened. To effectively counter anti-social activities by way of hoarding, black-marketing etc., Collectors and Superintendents of Police have been instructed to invoke necessary legal provisions under the various control orders and also under the Defence of India Rules and Maintenance of Internal Security Act so that a few unscrupulous do not prey upon the misery of thousands of people.

While I am fully aware of the social and economic effects of the unabated pressure on prices as a result of the imbalance between current flows of supply and demand, unless we analyse the reasons therefore from the long-term point of view and take immediate corrective action. I am afraid, the remedy will elude us. The stagnation of the economy and the present upsurge in prices is attributable in the final analysis to a continued low level of investment, particularly, in the 4th Plan period and consequently an inadequate rate of growth. Our economic policy will, therefore, have to be re-shaped in such a way that the levels of investment are stepped up with accent on such productive investments which, while yielding quick results also subserve our basic Plan objective of growth with justice.

The main reasons for the declining developmental outlays have been the recurrent natural calamities and the growing debt servicing liability of the State Government. Added to this, there has been a progressive contraction of Central assistance to the State Plan. The combined effect of these factors has been a constriction of the resource base of the State. It is in this context of enlarging the resource base of the State that, I shall have to refer to the recommendations of the 6th Finance Commission.

Sixth Finance Commission

Hon’ble Members, I am sure, are already aware of the recommendations of the 6th Finance Commission, a summary of which was placed on the Table of the House in the last Session of the Legislature. Out of the submissions made by us to the 6th Finance Commission was that the Grants-in-Aid under Art:275, of the Constitution should not be treated as a residuary form of assistance but approach should be one of rendering assistance to backward States, where the standards of basic social services and administration were below the minimum desirable level. We had also urged before the Commission that the combined effect of previous public investments, which were largely in the Irrigation and Power sector, and the pre-4th Plan pattern of Central Assistance was that the State accumulated a heavy debt burden which impaired the growth potential of the State in no small measure. We therefore sought for a scheme of debt relief, which, while reducing the debt burden of the State would be enable it to utilize public savings in the form of subscriptions to Open Market Loans for the various developmental programmes of the State. I am glad to say that both these submissions carried conviction with the 6th Finance Commission. Under the Award of the 6th Finance Commission which has been accepted by the Government of India, the total transfer of financial resources to the State on account of devolution of taxes and grants-in-aid under Art-275 (1), of the Constitution would be Rs.776.01 crores as against Rs.412.79 crores under the Award of the 5th Finance Commission. In addition to this, under the scheme of Debt Relief, the Finance Commission has also recommended consolidation of outstanding loans as on: 31-3-74, and a revision of terms of repayment as a result of which the estimated relief to the State would be to the tune of Rs.191.2 crores, over the 5th Plan period.

In the wake of the Award of the 6th Finance Commission enhanced provisions have been made in the coming year’s budget towards maintenance of (a) Irrigation Works; (b) Roads & Buildings; and (c) Hospital necessaries. Maintenance provision for irrigation works has been made at Rs.6 per acre. In respect of roads under the control of the State Government, full provision has been made in Budget Estimate : ;1974-75, on the basis of the formula adopted by the Finance Commission. Maintenance provision for the upkeep of buildings has also been enhanced. Hon’ble Members would also be glad to know that the old yardsticks in respect of provision for drugs, diet and other hospital necessaries have been revised and an additional provision of about Rs.2.5 crores has been made in Budget Estimate 1974-75 for these items.

Annual Plan: 1974-75.

Hon’ble Members are aware that the 5th Five Year Plan is to commence with the year 1974-75. I have mentioned earlier how the 4th Five-Year Plan period was, for our State, unfortunately one of relative economic stagnation. I have also mentioned how one of the contributory factors for this was the fact that the investments in the Plan could not be stepped up to the extent necessary. The increase in outlay in the 4th Plan over the 3rd Plan was only 19% for our State, while it was 62% for all States and it was as high as 117% in the case of some States. We have large spill-over commitments, particularly in the sectors of Irrigation and Power which have to be fulfilled both if past investments are to yield results and if the essential infrastructure is to be built up in the State. The minimum outlay required for these purposes had to be given the highest priority. On the other hand, we have also to give greater attention to the problems of accelerated development of the backward areas in our State and of the weaker sections of the community and the Minimum Needs Programme is designed to achieve these purposes. Our Draft 5th Five Year Plan proposals which envisaged an outlay of Rs.1,277 crores, were formulated, keeping these considerations in mind. These proposals had been discussed with the Planning Commission and the outlay on the State 5th five-year Plan tentatively fixed at Rs.1,105 crores. A final view in regard to the outlay on the State’s 5th Five-Year Plan can be had only after the formula for the distribution of Central assistance to States is settled by the National Development Council. However, an outlay of this order would require a considerable effort at resource mobilization by the State during the 5th Plan period.

The total outlay on the State’s Annual Plan: 1974-75 comes to Rs.136.94 crores. However, since this includes, inter alia, certain items that had hitherto been treated as Non-Plan, the outlay on State Plan on a comparable basis would come to Rs.128.39 crores, as against Rs.81.28 crores in the revised annual Plan: 1973-74. This step-up has been possible entirely due to an increase in the State’s resources for the Plan partly as a result of the Finance Commission’s Award and partly due to our raising additional resources. While, thus, there has been a step up in the State’s resources for the Plan, the Central assistance of Rs.53.15 crores assumed is even less than that originally agreed to for the Annual Plan: ;1973-74. If a proper beginning has to be made in regard to the 5th Five-Year Plan, it is necessary that the level of Central assistance is considerably stepped up.

In view of our large spill-over commitments under Irrigation and Power, we have allocated 61% of the total outlay for these two sectors, Irrigation being 25% and Power 36%. The allocation for Agriculture and allied services has been stepped up from Rs.11.52 crores to Rs.15.35 crores. A special provision of Rs.1 crore has also been made for meeting the State’s commitments for D.P.A.P.& S.F.D.A./M.F.A.L. Programmes. Besides this, additional Central assistance is expected for these programmes. The allocation for Industries has been doubled from Rs.2.21 crores in the current year to Rs.4.4 crores. Similarly, allocation for Social Services has gone up from Rs.14.86 crores to Rs.20.43 crores. The Social Services allocation includes provision under the Minimum Needs Programme of Rs.135 lakhs for Primary Education, Rs.100 lakhs under Public Health and Rs.150 lakhs for the acquisition of House Sites for Harijans, Girijans and other Backward Classes. It considering the allocations in the Plan, it has to be borne in mind that in a number of cases the commitments at the end of the current year would be provided for as committed expenditure , so what is now provided in the Annual Plan: 1974-75, would be fully available for the new schemes. In addition to the outlays provided in the State Plan which I have briefly indicated, we have provided for nearly Rs.16 crores under Centrally-sponsored Schemes.

From the point of view of the economy of the State, it is an important that we attract investments to our State in the Central Sector and from financing institutions as it is to see that the investments in the State Plan itself go up. In fact, considering that many of the investments in the State Plan are by way of provision of infrastructure, we would not be deriving full benefits of these investments unless we simultaneously make efforts to see that investments from financing Institutions, in the Central Sector and in the Private Sector are also attracted in larger measure to our State. In the removal of regional disparities, these sectors have a vital role to play. WE therefore propose reviewing this aspect also from time to time hereafter. The first step, in this direction was taken by convening a meeting of the Members of the State Legislature and Parliament, representatives of Financial Institutions and others concerned on: 14/2/1974 at Hyderabad. As a direct sequel to this meeting and to facilitate proper coordination between the State Government and the various Financial Institutions including Commercial Banks and also for dovetailing short and long-term credit the State Government have constituted an Institutional Finance Cell in the Finance and Planning Department. It is also proposed to constitute separate Committees for looking into the problems of agricultural and industrial credit in greater detail.

However, in the full benefit of our Plan Schemes is to accrue to the people, it is necessary that the efficiency of their implementation is improved. A toning up of the normal administration is also important from the point of view of the Plan in as much as larger resources for the Plan resulting from better collection of revenues and economy in non-developmental expenditure can accrue from such streamlining. These matters were all discussed at the recent conference of District Collectors held from 1st to 3rd March, 1974,and it is the earnest desire of Government to take quick follow-up action on the various decisions arrived at this conference.

While on the subject of planned development of the State, I may take the opportunity to mention the changes brought about in the Planning Organization at the State Level. As Hon’ble Members are aware, a Planning Board at the State level and Planning and Development Committees for the different areas have been constituted as envisaged in the 6-Point Formula. One of the immediate tasks facing these bodies would be the identification of the problems of backward areas and the formulation of plans for the accelerated development of such areas. Such accelerated development will require not merely the earmarking of certain funds within the State Plan but the provision of substantial additional funds. It is hoped that such additional assistance from the Centre would be available soon as contemplated in the 6-Point Formula.

I shall now briefly review the programmes under certain major sectors of development.

Agriculture and Allied Programmes

Agriculture - Our basic objective in the Agriculture sector remains the same, which is diversifying agricultural production by emphasising intensive cropping of food crops and encouraging a deliberate shift to high value commercial crops.

As part of our strategy of improving agricultural productivity, we have been giving considerable importance to the High Yielding Varieties Programme. It is a matter of deep gratification to us that this program has made considerable head-way since its introduction a few years ago. The new High Yielding Varieties have made a significant impact on foodgrains production, particularly on rice in the State. It may be noted that while the area under High Yielding Varieties of paddy was less than 6 lakh hectares in 1972-73, the coverage in Khariff 1973, was as much as 13.6 lakh hectares. It is expected that another 5 lakh hectares would be covered in Rabi 1973-74. It is therefore no surprise that in Khariff 1973, larger production of foodgrains was possible through higher productivity. In 1974-75, it is programmed to cover 22.14 lakh hectares under the High Yielding Varieties Program.

In the field of commercial crops, the strategy will be to concentrate on the more assured rain-fall areas and in the irrigated areas, particularly in Rabi. In 1973-74, with the successful implementation of schemes for maximising production of groundnut , castor, sun-flower and oil seeds, the estimated additional production would be about 46,000 tonnes of oil seeds, which is expected to be further raised to 1.5 lakh tonnes in 1974-75. Significant strides have also been made in the development of cotton and sugarcane. In the current year a notable achievement has been the rapid development of MCU-5 cotton, which is an extra long staple variety in about 2.25 lakh acres under the Nagarjunasagar Project in the districts of Guntur and Prakasam. This area is sought to be gradually extended by another 5 lakh acres. Under the sugarcane development scheme, in the coming year, it is programmed to create an additional production potential of 6 lakh tonnes.

`Dealing with agricultural production, I cannot but mention the serious constraint of short supply of fertilizers in the coming year. I am aware that this is the result of the uncertainties surrounding import of fertilizers in the wake of the oil crisis and the difficulties faced by a large number of domestic fertilizer units in improving their capacity utilization. However, we have pressed the Government of India that within these constraints our allocation of fertilizers for 1974-75, should be based on our performance in 1973-74 under High Yielding Varieties and other programmes and the potential , we have for utilizing the fertilizers to the maximum benefit. In the short run, while we shall have to concern ourselves with streamlining the distribution system with a view to ensuring proper distribution of available supplies to the needy farmers, the ultimate solution lies in a re-orientation of our agricultural production strategy in such a manner as to optimise yields with the given quantity of fertilizers. Hon’ble Members are aware that a Cabinet Sub-Committee had been constituted to go into the question of fertilizer distribution and suitable action to devise a proper system will be taken based on the recommendation of this Committee. A change in our agricultural strategy would call for the adoption of improved agronomic techniques, better management of locally available inputs such as organic manures, improved seeds and also a rapid expansion of the area under irrigation. It is with a view to making optimum use of the irrigation potential, that a sum of Rs.175 lakhs has been allocated for command area development, for securing maximum production in the shortest time by adoption of an integrated area development approach.

Dairy Development

Continued priority is sought to be given to the Dairy Industry, not merely because this would increase milk supply, but also because of the impact it has on the economy of the small and marginal farmers, by way of generating larger employment opportunities and thus help augment their incomes. Notable achievements in the current year have been the sanction of a modern dairy at Visakhapatnam, at an estimated cost of about Rs.63 lakhs, in theCo-operative sector. The feeder balancing dairy at Sangam Jagarlamudi to be set up with the assistance of the Indian Dairy Corporation has been sanctioned at an estimated cost of Rs.168 lakhs. This dairy would be able to exploit the entire milk potential in Krishna, Guntur and Ongole areas.

Yet another important landmark in the development of the Dairy Industry of the State has been the establishment of the Andhra Pradesh Dairy Development Corporation which will soon be taking over the major dairy units in the State. In the coming year, it is proposed to establish new dairies at Khammam and Tadepalligudem. Chilling centres are also proposed to be set up at Nalgonda and Mallepally and more in West Godavari District. Two Cooling Centres are also proposed to be established in Kurnool District. A milk factory is also expected to come up in the backward region of Rayalaseema. As part of the measures to improve the nutritional standards of the less fortunate, a Miltone plant is also being established at the Central Dairy, Hyderabad for manufacture and distribution of vegetable toned milk based on groundnut with a capacity of about 3,000 litters per day.

Fisheries:- By virtue of the long coastline, we are well placed to exploit the potentialities of deep-sea fishing. Investment in the fishing Industry also helps ameliorate the economic conditions of one of the weaker sections of the population , viz., fishermen. In order to be able to avail credit from various financial institutions for purposes of investment in this industry, the State Government have decided to set up a Fisheries Corporation and preliminary work on this is in progress. The Government hope that such a Corporation would, on the one hand, enable larger investments in this important industry and, on the other, be of greater service to the economically backward community of fishermen by making available to them larger numbers of mechanised boats, nets, cold storage facilities, better prices, and markets for fish products etc.


Andhra Pradesh being predominantly an agricultural State, the economy of the State has not yet acquired the degree of diversity which would ensure its speedy and balanced growth and create sufficient employment potential, particularly for the educated sections of the people. The State Government have, therefore, been making determined efforts to speed up the process of industrialisation in the State, specially in the relatively backward areas.

Two important factors which have hampered the process of industrialization of the State are lack of adequate incentives for the entrepreneurs and inadequate infrastructure facilities. At the instance of the State Government, the Government of India have recently declared several areas in the State as industrially backward and as being eligible for a Central subsidy of 15% on capital investment in industries in these areas. At the same time, the State Government have formed the Andhra Pradesh Industrial Infrastructure Corporation with the specific object of developing the industrial infrastructure facilities in the State, particularly in the backward areas. These two steps together, I am sure, would help accelerate the pace of industrialization of the State. The State Government have also decided to set up Co-ordinating Committees at the District and State levels in order to ensure that the completion of the various procedural formalities and provision of services for new industries are done quickly without the prospective entrepreneurs having go to from one department to another.

Government also propose bringing in an integrated Act for the State in place of the two State Aid to Industries Acts now in force in the two regions.

As Hon’ble Members are aware, there is an Industrial Trust Fund originally created in the former Hyderabad State which is intended to be utilized for the development of Industries in the Telangana Region. During 1974-75, a special allocation of Rs.85 lakhs is being made from the cash balance of the Fund to be utilized for the promotion of industries in the Telangana area over and above the normal Plan allocations.

The promotion Corporations of the State Government, particularly the A.P.I.D.C., A.P.S.S.I.D.C., and A.P.S.F.C., have been doing useful work. Hon’ble Members are aware that two of A.P.I.D.C’s joint sectors ventures, namely the Mini Steel Plant at Kothagudem and Plywood Factory at Rampachodavaram in the agency area of East Godavari District were inaugurated recently.

The State Government have been making efforts to attract as many Central Projects as possible to our State. Land acquisition for Vizag Steel Plant is progressing satisfactorily and it is expected that civil construction work would start during 1974-75, providing employment to the local people there. The Government of India have already issued letters of intent for a Fertilizer Plant at Kakinada and a Cement Factory at Tadpatri, Anantapur District , in the private sector. The Cement Corporation of India would be setting up Cement Plants in the public sector at Tandur.. Adilabad and Yerraguntala during the 5th Five-Year Plan. It is expected that the work on all these projects would commence during 1974-75.

In the context of the serious energy crisis facing the country, an immediate and significant step-up of coal production has become a national necessity. It is therefore, proposed to take up the expansion program of Singareni Collieries at an estimated cost of Rs.60 crores over the 5th Plan period, so that the existing level of production of l5 million tonnes of coal is taken to 12 million tonnes at the end of the 5th Plan. During the next year an amount of Rs.1 crore is provided towards the State Government’s investment in Singareni Collieries. The expansion program is expected to create an additional employment potential of 35,000.


The problems of handloom weavers have been engaging the special attention of the Government. In order to formulate concrete proposals for improving the conditions of the handloom weavers in the State, Government have decided to set up a special committee with officials and representatives of the handloom industry. Government have also decided to make available sufficient funds to settle all genuine claims in respect of rebate on handloom cloth up to the end of March 1974. The proposals for drawing up a scheme for making available yarn at reasonable prices to the handloom sector from the spinning mills in the co-operative and private sectors are also engaging the attention of the Government. Orders have also been issued permitting the allotment of powerlooms to the private sector so that the quota of 12,400 powerlooms for the State is fully utilized. Hon’ble Members would be glad to know that the Government of India have issued licences for setting up four cooperative spinning mills of l25,000 spindles each in the State.


In any strategy for the economic development of our State, irrigation would occupy a very high priority in view of its decisive influence on agricultural production. The current shortage of fertilizers has added urgency to the task of speedy completion of spill-over irrigation projects as well as ensuring maximum utilization of the irrigation potential already created. The outlay under the irrigation sector, excluding flood control and Drainage, has been raised to Rs.27.5 crores as against Rs.15.39 crores in Revised Estimate, 1973-74. Accelerated completion of major spill-over projects such as Nagarjunsagar, Pochampad, Tungabhadra High Level Canal and Vamsadhara, completion of spill-over medium projects within the Plan and execution of select medium irrigation projects in chronically drought-affected and backward areas with a view to correcting regional imbalances have been the underlying strategy in this sector.

In respect of Nagarjunsagar Project, the plan provision for 1974-75, is Rs.5 crores . Besides this the Planning Commission have agreed to provide additional Central assistance of Rs.10 crores outside the Plan, with which an additional irrigation potential of 61,200 hectares could be created by June, 1975.

Work on the Pochampad Project, is also progressing briskly. Main Canal excavation has been completed upto mile 42/4 and irrigation potential of l58,500 acres created. The lining work of the canal has been awarded to the Andhra Pradesh State Construction Corporation, a State Government Undertaking, and the works are under execution. Further, works on excavation of Main Canal and distributaries are in progress. A provision of Rs.14 crores has been made in Budget Estimate: 1974-75, which is the required allocation under the World Bank Program. It is programmed to create irrigation potential for 1.5 lakh acres by July, 1975.

The financial outlay on the Godavari Barrage is also being stepped up. At present the work on the Ralli Arm is under execution. A total amount of Rs.342.67 lakhs would have been spent on the project by the end of 1973-74. The allocation made for the coming year is Rs.210 lakhs.

An amount of Rs.240 lakhs has been allocated for works under Tungabhadra High Level Canal, Stage-II, in the coming year. It is programmed to complete the Guntakal Branch Canal. The work of widening the High Level Main Canal on the Mylavaram Dam and K.C.Canal will be continued in the coming year and an additional potential of 17,000 acres is expected to be created under the Guntakal Branch Canal.

It is proposed to spend Rs.80 lakhs on the construction of Baraage on Vamsadhara Project which is one of the major spill-over projects. The Planning Commission have agreed to examine the question of rephasing the project with a view to securing the full benefits within the shortest possible time and a report in this regard has been submitted to them.

A sum of Rs.60 lakhs has also been allocated for taking up repairs to Nizamsagar Project. It is proposed to restore partially the capacity of the reservoir to regain about 6 T.M.C., of lost storage so that not only the ayacut so far developed is protected but an extent of 35,000 acres which is now undeveloped is benefited. The work relating to the raising of the height of spill-way gates has been taken up and this is expected to be completed in the coming year.

It is proposed to accelerate the pace of work on continuing medium schemes for which an amount of Rs.230 lakhs has been allocated. A major part of this provision will be spent on the Tandava Reservoir, Vottigadda,, Gajuladinne, Swarna and Ukachettivagu Projects as these will give benefit in the Plan period itself.

The allocation under Minor Irrigation Schemes is Rs.210 lakhs. This amount is proposed to be utilized to push through spill-over works capable of yielding immediate benefit in the next year. With the indicated outlay, it is estimated that an additional potential of 38.000 acres will be created during 1974-75, besides stabilising supply to an extent of 24,000 acres. We also propose taking up on a priority basis during the first quarter of 1974-75, those Minor Irrigation works which can be completed by June, 1974.


The sharp deterioration in the power situation in the current year has brought to the fore the immediate need to create additional generating capacity and to improve the operational efficiency of existing units. The serious shortfall in capacity creation had an adverse effect on production in general and industrial production in particular. The failure on monsoons in 1972-73, and the consequent reduction in Hydro-generation further aggravated the power crisis. We are well aware that power is an essential item of infrastructure necessary both for agriculture and industry and that the development of power is vital for the diversification of the economy and the prosperity of the State. High priority is therefore being given for power generation in the next year.

Hon’ble Members would have noticed that the outlay on the Power Sector has been raised from Rs.34.16 crores in Revised Estimate 1973-74 to Rs.46.50 crores in the next year. Highest priority has been given for the speedy completion of on-going projects like Lower Sileru and Kothagudem, Stage-III.

The pace of work in the Lower Sileru Project is proposed to be further accelerated. This project envisages installation of 4 units of 110 M.W.., each. The first unit is likely to be commissioned by June, 1975. A sum of Rs.14 crores is being provided for this project in the ensuing year.

It is our intention to phase the work on the Srisailam Project so as to be able to commission the 1st unit by June, 1977. We have therefore increased the allocation for Srisailam to Rs.11 crores in 1974-75.

Regarding new projects, an outlay of Rs.4 crores has been proposed for Kothagudem, Stage-IV. In addition to this, the minimum provision necessary for the Vijayawada Thermal Scheme has also been provided for.

Regarding Rural Electrification Program, the performance in 1973-74, has been encouraging. As against the target of 13,000 pumpsets to be energized, the achievement has been over 16,000 to the end of December, 1973. In the coming year, a provision of Rs.4.5 crores has been made for the Rural Electrification Programmes, which includes the programmes of the Rural Electrification Corporation. At the instance of the Planning Commission a comprehensive program for electrifying agricultural pump-sets presently running on diesel is being drawn up.


The allocation for education under the Plan is Rs.400 lakhs of which Rs.135 lakhs is for Primary Education under the Minimum Needs Program.

In the primary education sector, it is proposed to create additional facilities for achieving 100% enrolment of boys and 80% for girls of the age group 6-11 years by the end of the 5th Plan. This would mean enrolment of 12.04 lakhs of additional children and the appointment of 31,000 additional secondary grade teachers.

In order to improve enrolment and attendance of children particularly girls and those coming from the weaker sections, it is proposed to pay book grants to 60,000 children at Rs.5/- per child and also attendance scholarships to 10,000 girls at Rs.40 per child. As part of the measures designed to improve the quality of primary and secondary education, an amount of Rs.19.20 lakhs is provided in the next year’s Budget for construction of 640 class rooms on the basis of matching grants. It is also proposed to establish new Ashram Schools in the Tribal Development Blocks in the State for which necessary provision is made in Budget Estimate 1974-75. To meet the increasing demand for trained teachers and also to impart in-service training to the existing teachers, it is proposed to revive the school teacher training institutions and also organize in-service training courses to primary school teachers. Towards this, a sum of Rs.38.9 lakhs has been provided in the next year’s Budget. It is also proposed to improve select primary schools for which a sum of Rs.40 lakhs is allocated.

In the filed of secondary education, an amount of Rs.17.8 lakhs is provided for opening 40 new high schools at places not served by any high schools within a radius of 5 miles and for opening additional sections in the existing schools.

An amount of Rs.18 lakhs is earmarked for starting 7 Junior Colleges and also towards additional staff and equipment in the existing colleges. Provision is also made for providing terminal job courses in select intermediate colleges.

An amount of Rs.23 lakhs is provided for development of Telugu Language and allied activities in the coming year. In this connection, I am sure, Hon’ble Members are aware of the decision of the Government to switchover to Telugu as the official language at Taluk level throughout the State with effect from the Ugadi day i.e., from 24th March, 1974.

Hon’ble Members are well aware of the proposal to establish a Central University at Hyderabad in pursuance of the 6-Point Formula to augment the existing educational facilities in the capital. A working group appointed by the Ministry of Education headed by Dr.George Jacob, Chairman of the University Grants Commission has already visited the State to have preliminary discussions in regard to the establishment of Central University. It is our earnest hope that the University will start functioning from the next academic year.

Another important fact which I would like to mention is that the introduction of a comprehensive Education Bill which would cover all facets of educational administration is under consideration of Government.

Employment Programmes

To relieve unemployment among the educated, Government initiated during the year the "Half-a-Million Jobs Program" for which a sum of rs.5.5 crores has been sanctioned. Out of this, a sum of Rs.3.5 crores has been set apart from schemes in the Industries Sector and Rs.2 crores for schemes in the non-Industries Sector.

The Planning Commission, have approved 48 schemes under this program covering the above outlay of Rs.5.5 crores. Of these, 24 are self-employment schemes , 23 are stipendiary training schemes and one is a subsidised employment scheme. The total employment potential including indirect employment under the self-employment program in the Industries Sector is about 50,000. Under the non-Industries Sector 5 self-employment schemes for Medical Graduates, Dental Graduates, Graduates in Indian Medicine and Homeopathy, Veterinary and Agricultural Graduates covering 850 posts have been approved. Under this program as against the margin money given by the Government commercial banks advance loans. In addition, they are also paid stipends.

The training schemes relate to farm consultancy, plant protection, appointment of teachers, paid secretaries in co-operative societies, basic health workers, nurses and midwives and wardens in hostels etc. Against the employment potential of 12,758 jobs in this sector, so far 10,200 persons have been provided with jobs.

Under the Industries Sector, schemes covering an employment potential of approximately 31,340 have been approved . These schemes cover establishment of self-employment estates etc. Margin money is given by the department against which banks sanction loans.

Rural Water Supply and Urban Development

Provision of drinking water facilities to rural areas suffering from scarcity, health hazards and special problems such as iron and flourides etc., continues to be the guiding objective in this sector. At the same time, it is also being ensured that village with inadequate supply of drinking water are covered especially Harijan Cheries etc.

The programme of rural water supply comprises two broad groups of schemes, namely, (a) rural water supply, involving sinking of simple open wells or bore wells and (b) protected water supply, involving the supply of water through a more elaborate system of over-head tanks and pipes. Since the construction of simple wells has proved to be costly and time consuming , especially in the rocky and difficult areas, it has been proposed to tackle this problem by sinking bore wells with the help of rigs. The rigs supplied by U.N.I.C.E.F. have been augmented by the purchase of 24 rigs by the State. In addition to this the rigs with the State Agro-Industries Corporation have been pressed into service. In the current year a sum of about Rs.116 lakhs is allocated for the Rural Water Supply Programme to alleviate the drinking water scarcity. The allocation is being stepped up to Rs.160 lakhs in the coming year.

In-so-far as protected water supply schemes are concerned, there are being executed with financial assistance from the Life Insurance Corporation of India. The Life Insurance Corporation of India have advanced a sum of Rs.189.94 lakhs being the first installment towards implementation of 229 protected water supply schemes, estimated to cost about Rs.7.61 crores.

As the Hon’ble Ministers are aware, the need for strengthening the organizational set up for urban development has been recognised and the Andhra Pradesh Urban Areas (Development) Bill 1974, has been introduced which is now under consideration of the Joint Select Committee of the Legislature. Provision has been made in the Plan for the development of necessary infrastructure in the urban areas under Urban Water Supply and Urban Development. The provision made for Urban Water Supply and Drainage is Rs.4 crores. A provision of Rs.35 lakhs has been made for the Twin Cities improvement and Rs.50 lakhs for Environmental Improvement Schemes in Hyderabad, Visakhapatnam and Vijayawada.

Welfare of Weaker Sections

The State approach towards the problems of weaker sections would be not only to accelerate the ameliorative programmes undertaken in the previous 5 – year Plans, but also to take up a package of measures, in terms of education, economic uplift, better living conditions and social services. The minimum needs programme in the 5th Plan largely benefit the weaker sections of the population.

A significant event in the current year was the abolition of the scheme of Government aid to hostels run by private managements through subsidy and the opening of 766 new Government hostels in lieu of the subsidized private hostels. There has also been an upward revision of the food charges in Government hostels. In the coming year provision is made for an additional number of 6,000 boarders.

Government have been conscious of the need for expanding the economic uplift programmes which have a direct bearing on the well-being of the weaker sections. To make full use of the institutional finances available for such schemes of economic uplift, Government have set up the Andhra Pradesh Scheduled Castes Finance Corporation to undertake specific programmes for the benefit of the Scheduled Castes specially in the field of Agriculture, Animal Husbandry, Small Scale, Village and Cottage Industries with an initial share capital of Rs.38.15 lakhs contributed by the State. The Corporation is expected to draw finances from the Commercial Banks, Life Insurance Corporation of India and other financial institutions and multiply its resources and utilize them for the accelerated economic uplift of the Scheduled Castes. During 1974-75, a further sum of Rs.30 lakhs is likely to be allocated towards Government share capital contribution to the Corporation.

The Government are also considering the setting up of a similar Corporation for the backward classes.

As part of our ameliorative measures for the economic uplift of the weaker sections, Government have established the Andhra Pradesh Leather Industries Development Corporation, with an initial share capital of Rs. 1 crore. The main objects of this Corporation are to establish, develop, finance, protect and promote tanning and leather industries in the State on modern and scientific lines. The existing leather units under the control of Government are proposed to be transferred to this Corporation. It is the hope of Government that Tanning and Leather Industries in our State will thrive under the management and supervision of this Corporation and that the economic condition of those weaker sections engaged in these industries would thereby improve.

Government have undertaken a fresh assessment of the availability of banjar lands in the various districts and have decided to embark upon a crash programme for the assignment of such lands by appointing special staff, wherever necessary.

In the coming year, Government also intend taking up crash scheme for the provision of house sites to the weaker sections, particularly to Scheduled Castes, Scheduled Tribes and Backward Classes for which a sum of Rs.150 lakhs is being provided for in the Budget Estimate 1974-75. In this connection, I may inform Hon’ble Members that the 1st phase of construction of houses by the Andhra Pradesh Scheduled Castes and Tribes Cooperative Housing Societies Federation, is nearing completion by utilizing fully a sum of Rs.10 crores provided by the Life Insurance Corporation of India and the Federation has to embark upon the 2nd phase in the current year.

I am happy to say that the response to the employment oriented Co-operatives organized with Government assistance to ameliorate the socio-economic standards of living of the poorer sections by creating self-employment potential has been encouraging . In the coming year a sum of Rs.14.5 lakhs is being allocated for providing assistance to Rikshaw Puller’s Co-operative Societies, Printing Co-operative Societies and other employment production oriented Co-operatives

Land Reforms

Hon’ble Members are well aware of the comprehensive revised Ceiling Law on agricultural holdings viz., The Andhra Pradesh Land Reforms (Ceiling on Agricultural Holdings) Act, 1973, which was gazetted on: 1-1-1973, after securing the assent of the President of India. Certain amendments to the Act have recently been passed by both Houses of the State Legislature and the Amendment Bill has been sent to the Government of India for securing the President’s assent. It is proposed to take-up implementation of the Act as soon as the Principal Act and the Amendment Act are got included in the 9th Schedule to the Constitution of India.

New Budgetary Structure

Before I proceed to present briefly the financial transactions for the year, I would like to inform the House of certain significant developments in the Budgetary structure. The winds of change have not spared the traditional budget. Hon’ble Members would agree that the need for some far reaching reforms in Budgetary procedures had been felt for a very long time. The present Budget with its organization-cum-object basis of classification lays almost exclusively emphasis on the ultimate objects of expenditure, such as Pay of Officers, Contingencies, etc., rather than on the purposed which such expenditure seeks to sub-serve. In the result, a meaningful appreciation of allocation of resources among competing programmes and activities under different functions of Government is rendered extremely difficult, if not impossible. This is because Budget and Accounts were conceived of as instruments for the control of spending only and were not designed to assist in planning and decision making. Another major defect of the conventional budget was its inadequacy to meet the needs of decision makers at various levels of Government for effective management of programme operations. To remove these deficiencies the Government of India appointed a Team of Officers to conduct a comprehensive review of the Heads of Accounts and Heads of Development adopted for Plan purposes, keeping in view the requirements of performance Budgeting and an economic classification of the Budget. On the basis of the recommendations of the Team of Officers, the Controller and Auditor-General of India has prescribed the revised accounting classification with effect from 1-4-1974. The Budget Estimates for 1974-75 are based on this new classification, the main features of which are (a) a clear and comprehensive identification of the objectives of Government, (b) correlation of the Plan Heads of Development adopted by the Planning Commission for Plan purposes and the major and minor heads of account adopted in the Budget. The need for a link document to correlate the plan and Budget is therefore obviated, (c) accounts classification has ceased to be organization oriented and the classification is now based on the purpose for which the amount is spent and only incidentally on the object on which it is spent.

Consequent upon the revised accounting classification a revision of the structure of demands for grants has also become necessary. The significant feature of the revised structure of demands for grants is that the total provision relating to a distinct service or administration is included in one demand thereby enabling a full-and true appreciation of resource allocation for a particular service. The revised demand structure has also been approved by the Estimates Committee and the detailed demands for grants presented to the House is in this form. The present practice of provisions relating to a service being dispersed under various sections, such as Revenue, Capital, and Loans is dispensed with.

In this connection, I would like to gratefully acknowledge the unstinted and continued co-operation of the Accountant-General of Andhra Pradesh and his able deputies incharge of the implementation of the revised accounting classification, without which the change over to the new system could not have been so smooth and swift.

Accounts: 1972-73

The accounts disclose a modest revenue surplus of Rs.4.26 crores as against the anticipated revenue deficit of Rs.48.09 crores. This is mainly because of a steep fall in revenue expenditure as a result of the disturbed conditions in large areas of the State and the consequent set back in the implementation of schemes. The outstanding over-draft of Rs.72.72 crores with the Reserve Bank of India as on: 31/3/1972, was also repaid during the year and the year ended with a marginal cash balance of Rs.76.82 lakhs.

Revised Estimate: 1973-74

In the current year as against the anticipated budgetary revenue deficit of ;Rs.44.80, crores, the deficit is now expected to be only Rs.4.78 crores. This is mainly as a result of continued buoyancy receipts and a reduction in revenue expenditure through the enforcement of a series of economy measures by the Government in September 1973. There are no significant variations in respect of capital expenditure. Though at the time of framing the Budget Estimates for 1973-74, it was expected to close the year without running into an overall deficit, a deficit now appears imminent. There are at least two main reasons for this. Firstly, drought relief operations had to be continued in the current year also on a fairly large scale which was not fully anticipated and provided for in the Budget. Secondly, leave salary and pay advance sanctioned by the Government to the employees who were on strike during the agitation period were also not provided for in the Budget. The year is, therefore, now expected to close with a negative cash balance of Rs.15.82 crores. If revenue collections prove to be better than anticipated, to this extent, there will be improvement in the closing balance position.

Budget Estimate : 1974-75

I expect that the buoyant trends in revenue receipts noticed this year would continue. Revenue receipts are therefore placed at Rs.448.79 crores next year as against Rs.410.54 crores in Revised Estimate 1973-74. Proceeds from Tax revenues are estimated at Rs.229.95 crores as against Rs.213.25 crores in Revised Estimate: l1973-74. Larger credit has also been taken under Grants-in-aid and contributions (Rs.131.33 crores) as against the Revised Estimate of rs.107.14 crores. This is mainly because of a larger transfer of resources from the Government of India as a result of the Award of the 6th Finance Commission. The Budgeted revenue expenditure for next year is Rs.434.08 crores as against the revised figure of Rs.415.31 crores in the current year. The larger revenue expenditure is on account of la variety of reasons, the more important of which are (I) full provision for ad-hoc Dearness Allowance sanctioned by the Government in January 1974, (ii) larger Plan Revenue Expenditure; and (iii) enhanced maintenance provisions made particularly in the Irrigation, Communications and Medical and Health sectors. The net effect of the transactions on revenue account is expected to be a revenue surplus of Rs.14.7 crores. Consistent with the policy frame enunciated by me earlier, Capital Expenditure on Plan Account next year is estimated at Rs.62.56 crores as againstRs.41.77 crores in the Revised Estimate 1973-74. I earnestly hope that this significant step up in investment outlay would result in a larger flow of benefits to the people at large and the weaker sections in particular.

The net effect of the combined transactions in the coming year is expected to result in an overall deficit of Rs.17.2 crores. I expect, the deficit to be covered by (I) larger collections of revenue both on current and arrear accounts by streamlining the collection machinery, (ii) larger Central Assistance, and (iii) additional resource mobilization.

As Hon’ble Members are aware certain measures for raising additional resources had been approved by the House during the last session. As part of that effort, it is now proposed to bring in Legislation in this session to amend the Indian Stamp Act, 1899 to provide for rationalization of stamp duties chargeable on certain instruments like Conveyances, Bottomry Bonds etc. Through this measure, it is proposed to round off the existing duties in respect of such instruments with slight increases in certain cases. The proposed revision of rates of Stamp Duty in respect of certain uploads will also affect the rates of certain other articles and therefore consequential revision is also being effected. This tax measure is expected to yield additional revenue of Rs.1.2 crores.


In conclusion, before I formally move the House for its approval of the Budget Proposals, I may in all humility submit that the Budget is no talisman for all our social and economic problems. No doubt, it is a powerful instrument in the fiscal armoury of any Government, which if judiciously operated can lead us to our goal of growth with social justice. How soon we can reach our destination depends entirely upon the co-operation of you all and the united endeavors of our people, both of which I expect in full measure.

Sir, with these words, I commend the Budget to the House for its approval