Previous Budget Speeches




1980 - 81

G.Raja Ram

Speech of Sri G.Raja Ram
Minister for Finance
Presenting the Budget for 1980-81
To The Andhra Pradesh Legislature
on the 22nd February 1980.




I rise to present the Budget of Andhra Pradesh for the year 1980-81.

The year that has passed since I last presented the Budget has been a difficult and momentous one for the country as a whole as well as for our State. It has been momentous from the political point of view because of the elections that have taken place and the overwhelming verdict the people have given both in our State and in the country. The support we have received from the people is an endorsement both of our leadership and of our programmes and policies. We have consistently tried to evolve and implement policies and programmes to benefit the weaker sections of the people, while also strengthening the economy. That has earned us the confidence that we enjoy among the people. The Budget that I am presenting will seek to continue this trend and will incorporate policies and programmes that would benefit the weaker sections in accordance with the Twenty Point Programme.

Economic Situation

The year 1979-80 has been difficult from the point of view of the economic situation. The year commenced against a backdrop of significant economic progress during 1978-79. In the year 1978-79 the State income at constant prices has risen by 7.7 per cent over 1977-78. Agricultural production recorded a substantial increase with the foodgrains production reaching an all time record of 106.67 lakh tonnes. This level of production had surpassed the earlier record of 94.28 lakh tonnes achieved in 1975-76. However, during the year 1979-80 the seasonal conditions were generally unsatisfactory and many parts of the State experienced sever drought conditions. Though the position improved somewhat with the rains received in September, the overall agricultural production in 1979-80 was still affected by the earlier drought conditions and the erratic pattern of rainfall. In November 1979 there were heavy rains in the State, which affected, to some extent, the rice crop ready for harvest in the delta districts. As a result of these unfavourable seasonal conditions, a decline in agricultural production was expected in kharif 1979-80. To offset this decline to some extent, the State Government has taken measures to increase Rabi production. These measures include the raising of hybrid jowar crop an additional 1.10-lakh hectares and groundnut crop in an additional area of 1.09 lakh hectares. These measures, however, cannot fully offset the substantial decline observed in kharif season. The preliminary estimates of production of principal crops indicate that the foodgrains production during 1979-80 might be of the order of production in 1977-78 i.e., 90 lakh tonnes.

On the other hand, the overall industrial production in the State showed a substantial increase. The average index number of industrial production during 1979-80, with 1970 base, increased by 9.2 per cent compared to the previous year. The labour situation was more or less similar to the preceding year while the employment situation was, however, somewhat unsatisfactory. The price situation requires to be watched as there has been an increasing trend both in wholesale prices and Consumer Price Index—the increase in the wholesale prices for agricultural commodities being about 6.1 per cent during 1979 compared to the previous year and the increase in Consumer Price Index being about 8.8 per cent.

Public Distribution System:- The price increases in the State are only a reflection of larger national trends, perhaps accentuated to some extent by the adverse seasonal conditions in the State. Nevertheless we have also to take necessary and adequate measures to arrest this trend. A basic solution can only be increased production. But this must be augmented by strengthening the public distribution system. At present 22,183 fair price shops are functioning under the production-cum-distribution scheme. Essential commodities like Rice, Wheat, Sugar, Kerosene, Rapeseed Oil, Palmolein Oil, Palm Oil and manufactured articles like soaps and controlled cloth are being distributed through these shops. The public distribution system would have to be further strengthened in the context of the present trend of rising prices.

Financing of the Plan

Annual Plan 1979-80:- The total outlay on the Plan in the Budget for 1979-80 was Rs.450.02 crores. In the Revised Estimate for 1979-80 that I am presenting, this outlay is Rs.450.83 crores. While the figure is approximately the same, there is a significant difference in sectoral allocations between the original and the revised outlays. As the Hon’ble Members are aware, the National Development Council decided in February, 1979 on transferring certain Centrally Sponsored Schemes either completely to the State’s Sector or to a category to be financed hereafter on the basis of 50 per cent assistance from the Government of India. As a result of this, certain additional resources were available distribution to the States and the Council has decided that this should be done on the basis of population adjusted for per capita State Income. On the basis of this formula we became entitled to Central assistance of Rs.32.15 crores in 1979-80, but simultaneously a number of Centrally Sponsored Schemes had to be adjusted within the State Plan while for some other 50 per cent of the total outlay had to be found from within the State Plan. In the revised outlay for 1979-80 these adjustments have been carried out.

Subsequent to the presentation of the Budget for 1979-80 there was a deterioration in the State’s resources for the Plan because of various measures which I have mentioned in detail elsewhere in my speech, more particularly because of the cost of pay revision, liberalisation of pension, certain concessions to police personnel and medical doctors, making the workcharged establishment permanent and the extension of certain benefits to teaching staff in aided institutions. In addition, the receipts under Land Revenue which were anticipated in the original Budget to be Rs.40.66 crores had to be revised to Rs.20 crores because of the cyclone and of the drought conditions in large parts of the State consequent on which Land Revenue collections had to be suspended. Simultaneously there has been a certain buoyancy in receipts under Sales Tax and Excise and we have received additional Central assistance under the "Income Adjusted Total Population Formula" which I have mentioned above. It is, therefore, anticipated that we would be able to finance the revised Plan outlay without gap in resources.

Central Assistance for Cyclone Relief: - However, the Budget would show that there would be a deficit in the overall transactions in the current year of Rs.11.73 crores. This deficit is arising because of the expenditure on Cyclone relief. The Government of India approved a ceiling of Rs.61.22 crores for expenditure on cyclone relief and restoration works, consequent on the severe cyclonic storm of May, 1979. Against this, had to be set off the expenditure out of the margin money provided for natural calamities amounting to Rs.6.81 crores. The Government of India have also provided foodgrains under the Food-for-Work Programme to the extent of Rs.7.50 crores. The net cash expenditure would, therefore, come to Rs.46.91 crores. This amount of Rs.46.91 crores, the Government of India have agreed to finance on the basis of non-plan grant to the extent of three-fourths of the amount, i.e., Rs.35.18 crores, on the basis of the recommendations of the Seventh Finance Commission. We have requested the Government of India and the Prime Minister that as our financial position does not permit us to meet one-fourth of this expenditure over and above the margin money, the entire amount may be given as a grant. We have also submitted that there is a provision in the recommendation of the Seventh Finance Commission that where the natural calamity is of special severity, the Government of India may give assistance even in excess of three-fourths recommended by the Commission. For the time being, since full expenditure of Rs.61.22 crores has been reflected in the Budget and assistance has been taken into account only to the extent of Rs.42.68 crores, the difference of Rs.11.73 crores is arising as a deficit in the Budget. The Chief Minister has again taken up this matter with the Prime Minister and we hope that the Government of India will consider our request favourably in view of the fact that the Cyclonic storm of May, 1979 was a natural calamity of special severity. Against the ceiling of Rs.61.22 crores approved by the Government of India the expenditure provided in the Budget is Rs.63.11 crores which is Rs.1.89 crores in excess of the approved ceiling.

Advance Plan Assistance for Drought Relief:- As the Hon’ble Members are aware a Central Study Team visited the State during September, 1979 in connection with the drought conditions prevailing practically throughout the State. The State Government had issued orders of incurring an expenditure of the order of Rs.23.08 crores in July, 1979 itself to meet the drought situation. But the Government of India subsequently agreed to an expenditure of only Rs.22.05 crores on drought relief measures. Out of this, the State Government have to meet Rs.1.77 crores from the margin money of Rs.8.58 crores provided as per the recommendations of the Seventh Finance Commission. Excluding this, the balance of Rs.20.28 crores will be provided by the Government of India as advance Plan assistance.

Annual Plan 1980-81:- The Annual Plan discussions for the Plan 1980-81 could not take place with the Planning Commission, although the official level discussions and discussions in the subject matter Working Groups did take place. We have presented proposals to the Planning Commission envisaging a total outlay of Rs.543 crores. The various Working Groups recommended a total outlay of Rs.473 crores. The resources position, however, is somewhat certain. While we have been able to make up most of the deterioration in resources in the current year due to the various factors I have mentioned earlier, two major factors in regard to Central assistance have brought in an element of uncertainty in regard to the resources for the Plan 1980-81. Firstly, our share in Central taxes has gone down because of the receipts from Union excise duties going down.

The second aspect is with regard to Central assistance. In 1979-80, the original Central assistance including additional assistance for externally aided projects was Rs.112.57 crores compared to an assistance of Rs.215 crores that we had received in 1978-79. We urged before the Planning Commission at that time that we could not sustain a drop in Central assistance of that order and that the increase in the transfer of resources from the Centre to the States consequent on the recommendations of the Seventh Finance Commission was not such as to compensate us for this drop in Central assistance. The Planning Commission conceded that there was a shortfall in the overall resources transfer to our State and agreed to a special assistance of Rs.24 crores. They also agreed to an advance Plan assistance of Rs.20 crores making a total of Rs. 44 crores.

In regard to the year 1980-81, it has not yet been decided whether these two items would be repeated. In the official level discussions we have emphasized that it would be difficult for us if Central assistance of this order is not atleast repeated. In the Budget proposals we have assumed that this amount would be available in 1980-81 also. Even so there is a gap in resources of about Es.31 crores. In view of this uncertainty regarding resources position and in view of the fact that the discussions with the Planning Commission have not taken place, we have more or less repeated the current year’s outlay in 1980-81. The total outlay on the Plan, however, goes up from Rs.450 crores to Rs.462 crores, mostly because of an increase in the internal resources of the Road Transport Corporation which has pushed up its own Plan outlay. The Plan allocations for 1980-81 will have to be reviewed and decided after the final discussions take place with the Planning Commission.

The various allocations in the Plan and a brief review of the programmes in the Plan have been furnished separately to the Hon’ble Members and I shall, therefore, not try to cover all aspects in my speech. I shall select only the more important sectors for a brief mention here.

Out of the total outlay of Rs.462 crores, the major allocation is once again for Irrigation and Power, which together get Rs.295.82 crores, i.e., 64 per cent of the total outlay. Social Services in all get an allocation of Rs.62.85 crores, i.e., 13.6 per cent. Agriculture and allied services, including Co-operation have been allocated Rs.51.81 crores. The allocation for Transport and Communications is Rs.38.57 crores of which the Plan of the R.T.C., is Rs.28.47 crores. The total allocation for Industries and Minerals is Rs.11.73 crores.

Agricultural Production

As I have mentioned earlier, the Agricultural Production Programme in 1979-80 was affected by the adverse seasonal conditions. A comprehensive Contingency Plan was, therefore, implemented to bring larger areas under maghi jowar, groundnut and black gram in left over kharif areas as well as tank fed areas. Government have sanctioned an amount of Rs.570 lakhs under short term loans for purchase of inputs and Rs.200 lakhs for procurement and distribution of high yielding jowar, groundnut and pulses seeds. Rs.12 lakhs were also sanctioned by Government under Seed Exchange Programme for small and marginal farmers and Rs.15.75 lakhs as 50% subsidy on seed to the farmers, other than small and marginal, for purchase of hybrid jowar seed and other hybrid millet seeds. Under the Contingency Plan drawn up in the context of drought, a record quantity of 4,029 tonnes of groundnut seeds and 500 tonnes of hybrid jowar seeds was distributed and an additional area of 1.09 lakh hectares under groundnut, 1.10 lakh hectares under hybrid jowar and 54,000 hectares under green and black gram have been covered. By undertaking the above programmes it is expected, as I have mentioned earlier, that we shall be able to reach a production of about 90 lakh tonnes this year.

The Central Working Group has fixed a target of 103 lakh tonnes foodgrains production for this State for the year 1980-81. The high yielding variety programme is the main plank of the strategy for achieving the target along with other package of recommended practices. It is proposed to cover under high yielding varieties 27.88 lakh hectares under rice, 4.74 lakh hectares under jowar, 3.10 lakh hectares under bajra and 0.72 lakh hectares under maize. It is also proposed to distribute 4.90 lakh tonnes of nitrogenous fertilizers, 1.95 lakh tonnes of phosphates and 0.60 lakh tonnes of potash.

It is proposed to step up production of oil seeds and pulses through production and distribution of quality seeds, demonstrations and extension of cultivation to new irrigated areas and also to rice fallows.

Animal Husbandry

The outlay under Plan is Rs.111.51 lakhs during 1980-81 which is Rs.20 lakhs higher than that provided in 1979-80.

A beginning has been made in the introduction of frozen semen as the main technology for upgrading cattle. Two laboratories, one at Vizag and another at Nandyal have been started for processing of bull and buffalo semen. 68 candidates has so far been trained in the administration of artificial insemination in villages, 1,500 unemployed educated persons have been trained to take up dairying and 442 persons for taking up poultry farming. These persons are being provided subsidy by Government and finances are being mobilised from Banks for setting up these units. To meet the demand for vaccine to protect the animals and birds against contagious diseases, which has increased phenomenally, Government are starting a second vaccine production unit at Samalkot which will go into production in 1980-81.

The Dairy Development Corporation has been making rapid progress and the installed capacity of 13.75 lakh litres per day this year is estimated to go up to 17.60 litres per day in the coming year. Procurement of milk is estimated to go up from 1,784 lakh litres during this year to 1,900 lakh litres next year. The Corporation is arranging free supply of milk, daily to about 15,000 school children in Hyderabad and about 9,400 pre-school children at Vijayawada and Guntur and in various Balwadis.

Special Programmes for Rural Development

All these programmes are eligible for 50% Central Assistance under the revised pattern of Centrally Sponsored Schemes.

Small Farmers Development Agency: - The Small Farmers Development Agency Programmes are being implemented in 137 blocks with an annual outlay of Rs.2.50 lakhs per block. These are intended to benefit Small and Marginal Farmers and Agricultural Labourers.

Drought Prone Areas Programme :- The Drought Prone Areas Programme is being implemented in the State in 76 blocks covering 53 taluks of 7 districts. In the current year assistance is being provided at the rate of Rs.15 lakhs per block. The programme benefits the small farmers, marginal farmers and agricultural labourers and provides for the infrastructural development of the areas. The total outlay of Rs.1,140 lakhs for this scheme in 1980-81 will be shared by the State and the Centre equally. The programmes cover various sectors like Agriculture, Animal Husbandry, Fisheries, Forestry etc.

Integrated Rural Development:- The Integrated Rural Development Programmes are being implemented in 190 blocks in the S.F.D.A., D.P.A.P., C.A.D.A, Areas and in certain other blocks. During the year 1979-80 through these programmes 48,140 families including 19,000 belonging to Scheduled Castes and Scheduled Tribes derived a variety of benefits. Under these programmes, 3,649 new wells were constructed, 3,895 pumpsets were supplied, 7,043 dairy animals were distributed, 3,538 sheep units were supplied and 4,258 pairs of bullocks were provided up to November, 1979. The provision in 1980-81 will be Rs.1,336 lakhs to be shared equally by the State and the Central Governments.


As usual, Irrigation gets high priority due to Andhra Pradesh being predominantly an agricultural State. Investment in this Sector, has been substantially stepped up from Es.129.86 crores in the Budget Estimate of the current year to Rs.136.50 crores during the next year. Approximately two thirds of this investment is required for the spill over commitments in Nagarjunasagar, Sriramsagar and Godavari Barrage Projects.

An allotment of Rs.45 crores on Nagarjunasagar, Rs.35 crores on Sriramsagar Project, Rs.8.50 crores for Godavari Barrage, Rs.43.15 crores for other Major and Medium Irrigation Projects and Rs.4.85 crores for Flood Control and Drainage Programmes has been made for the year 1980-81. As a result of these investments, irrigation potential is expected to increase by 3.14 lakh hectares during 1980-81 through Major and Medium Irrigation Projects. Under P.W.D. Minor Irrigation, an additional potential of 7,640 hectares will be created in the coming year. Adequate provisions have also been made for continuing the Singur Project and the Yeleru Reservoir Scheme which, apart from stabilising the ayacut under the respective projects, would help supply drinking water for the twin cities and for the Visakhapatnam Steel Plant respectively.

Command Area Development

Simultaneously with the completion of the projects and the canals under Nagarjunasagar, Sriramsagar and Tungabhadra (High Level Canal Stage-II) projects, Government have taken action for the utilisation of the irrigation potential created under these projects. Besides the major projects referred to above, areas under Rajolibanda diversion scheme, Kurnool-Cuddapah Canal and Low Level Canal of the Tungabhadra Project have also been taken up. The total cultivable area under the above projects is 14 lakh hectares. Irrigation potential created so far is about 9 lakh hectares against which 6 lakh hectares have so far been developed. Government have taken special steps for providing credit facilities for ineligible and un-willing farmers and have extended guarantee to the extent of Rs.4 crores to finance the above category of farmers. For the successful implementation of the command area development programme, a draft comprehensive command area development legislation has been prepared and sent to Government of India for concurrence which is awaited. Under the Nagarjunasagar Project, a programme for rehabilitation of existing W.B.M. Roads has been taken up and of the 631 Kms roads, work on 200 Kms has been completed by March, 1979. For roads under the Nagarjunasagar Project the provision made for the coming year is Rs.262.80 lakhs.


Power continues to get the highest allocation in the Plan. The allocation for Power in 1980-81 is Rs.159.32 crores. In 1979-80 the original allocation was Rs.173 crores but this has been revised to Rs.151.83 crores due to shortfall in resources of the Andhra Pradesh State Electricity Board and a shortfall of Rs.10 crores under Srisailam Project. The revised provision for 1979-80 is Rs.119 crores for Andhra Pradesh State Electricity Board and Rs.29.83 crores for Srisailam. For 1980-81, the provisions are Rs.135.32 crores for Andhra Pradesh State Electricity Board, Rs.22 crores for Srisailam and Rs.2 crores for Balimela.

During 1979-80, the first unit of 210 M.W. of Vijayawada Thermal Station (Stage-I) was synchronised with the grid on 1-11-1979. The first unit of the 100 M.W. of Nagarjunasagar Pumped Storage Scheme (Stage-I) is in advanced stage of installation and is expected to be commissioned by March/April, 1980. The second unit at Vijayawada Thermal Scheme (Stage-I) is expected to be on trial by March, 1980.

Although electricity generated in the State increased during 1979 by 9.5 per cent, it fell short of the original programme due to the low water levels in the reservoirs, due to the failure of the monsoon and due to the unsatisfactory performance of two of the thermal units. Simultaneously, however, the demand increased, partly due to the drought conditions experienced by the State in Kharif 1979 which increased the demand for electricity from the agricultural sector. Consequently, a cut of 30 per cent had to be imposed on the H.T. consumers. However, supply to agricultural loads being of utmost importance, highest priority is being given to this sector.

During the coming year, with the commissioning of the second and third units of the Nagarjunasagar Pumped Storage Scheme generating an additional 200 M.W. the likely installed capacity at the end of 1980-81 would be 2,398 M.W. Under Rural Electrification, the targets are for electrification of 1,650 villages and energisation of 48,000 pumpsets.


Andhra Pradesh has been making rapid strides in the field of industrialisation. The number of large and medium units has increased to 285 with a total investment of Rs.1,050 crores and with an employment of 2.5 lakh persons. The Fertilizer Factory at Ramagundam, which has recently commenced production of urea, is the first local based fertilizer unit in Asia. Two large Paper mills, Bhadrachalam Paper Board and Sree Rayalaseema Paper Mills have gone into production recently. As the Hon’ble Members are aware, over 200 letters of intent involving an outlay of Rs.5,200 crores are currently under active implementation in our State. The most important of these projects are the Integrated Steel Project at Visakhapatnam and the Nagarjuna Fertilizers and Chemicals Plant at Kakinada.

The Andhra Pradesh Industrial Development Corporation has continued to make progress during the year. It has promoted/assisted 194 units in the large and medium scale sector with a total investment of Rs.733 crores, as compared to 180 units with an investment of Rs.655 crores during the last year. The employment potential has also increased from 1,75,000 persons last year to 1,83,000 persons this year. The investment in identified backward areas has also increased from Rs.359 crores last year to Rs.408 crores this year.

In keeping with the stress on rural industrialisation the District Industries Centres have been increased from 11 last year to 14 this year. The Andhra Pradesh Khadi and Village Industries Board has extended its scheme for adoption of villages to 750 more villages in addition to 359 villages already adopted.

Special Employment Programmes:- The society for employment in twin-cities (SETWIN) has undertaken a large number of training-cum-production projects. It has recently taken up the Bus Service Scheme in the twin-cities which has contributed to solve the transport problem in the Twin-cities to a great extent. The twin objects of the Special Employment Scheme aim at improving the skills of the educated unemployed persons belonging to weaker sections and providing them enhanced employment opportunities. Seven training programmes are currently under implementation as part of this scheme through which unskilled educated unemployed are trained in skills which are in shortage or in high demand categories. Nearly 5,000 unemployed candidates have so far been provided with these training opportunities. Further, twelve more programmes under the Special Employment Schemes are under implementation to provide self-employment opportunities for the literate unemployed candidates belonging to weaker sections. Nearly 15,000 candidates have been given training, margin money and all other institutional and infrastructure help in establishing themselves in these self-employment opportunities.

Handlooms:- There a large number of dormant weavers co-operative societies. It is proposed to reactivate them by providing necessary technical and financial inputs through intensive mobilisation of credit limits from the District Co-operative Central Banks and extension staff of the Directorate of Handlooms and Textiles. As the supply of raw materials like yarn, dyes and chemicals has not so far been organised to this sector it is proposed to entrust this activity to the Andhra Pradesh State Textile Development Corporation and APCO so that they could procure the textile requirements and supply them to the Society. The Andhra Pradesh State Textile Development Corporation is being instructed to concentrate on twin objectives of training the weavers in supplying raw-materials.


The allocation for the R.T.C. is being increased from Rs.16.51 crores in the Budget Estimate of the current year to Rs.28.47 crores in 1980-81. The step up is in keeping with the importance Government attached to provision of transport facilities, particularly in the rural areas. The Village Link Transport Service Scheme has been taken up in a big way and already 20,000 villages have been covered. It is proposed to cover 8,000 more villages during 1980-81 by bus and jeep services.


The Plan and Non-Plan provision for education has been increased from Rs.183.13 crores to 188.91 crores during the current year and Rs.198.55 crores next year.

The enrollment of children in the age group of 6-11 has increased from 49.25 lakhs in 1978-79 to 51.33 lakhs in 1979-80. It is expected to go up to 55.09 lakhs during 1980-81. The enrollment of children in the age group of 11-13 has gone up from 7.71 lakhs in 1978-79 to 8.36 lakhs in 1979-80. It is expected to go up to 9.65 lakhs during the next year.

During the current year 2,984 S.G.B.T. posts and 600 B.Ed., posts have been sanctioned involving an expenditure of Rs.210.43 lakhs.

A specially designed non-formal educational programme was put on ground during 1979-80 with the assistance of the Central Government to enroll the non-enrolled and drop out children of the age group 9-13. While 2,640 non-formal educational centres were opened this year it is proposed to open 1,320 new centres during 1980-81. 99,000 children are expected to be enrolled in these centres by the end of 19080-81. The expenditure on this scheme is Rs.73.26 lakhs to be shred by the Centre and the State equally.

Two degree and nine Junior colleges in the Government sector were sanctioned this year. Permission has also been given to start four degree and ten Junior Colleges by private institutions.

Besides increasing the Block grants of all Universities, development grants of Rs. 134.21 lakhs to Ngarjuna University and Rs. 174.95 lakhs to Kakatiya University have also been released so far.

Vocational Courses have been introduced this year at the Intermediate level in the fields of Engineering and Technology, Agriculture, Animal Husbandry, Home Science, Commerce and Business Management. The Government are actively considering introduction of vocational courses in Medical and a Health fields also.

With a view to developing the personality of the College students and instilling in them a sense of discipline and dignity of labour and also to promote national consciousness, Government have decided to introduce field work before awarding degrees to them . government hope to implement this scheme from the academic year 1980-81 in two colleges per district.

The Abhyudaya Pradhamika Vidya Samstha which has been set up to improve the standards of Elementary Education has been able to supply uniforms to 55,000 children and has covered two lakh children under the Mid-day Meals Programme. The Samstha has released an amount of Rs. 16 lakhs to 16 districts for construction of additional class rooms under the Food-for-Work Programme. It has also taken up the construction of 100 Kitchens in selected model schools at an estimated cost of Rs. 15 lakhs with the assistance of 6.75 lakhs from Care Organisation and Rs. 8.25 lakhs from the State Government. It proposes to construct 200 more Kitchens.

About 2,07,000 illiterate adults in the age group of 15-35 would become literate by the end of November, 1980. An amount of Rs. 116.46 lakhs has been provided in the Plan for taking up Adult Education schemes.

Two Residential Schools have been sanctioned during the course of the year one at Upper Sileru in Visakhapatnam District mainly for the Scheduled Tribes boys and the other for girls at Vikarabad in Rangareddy District.

Government have decided to pay salaries through Banks to the staff in fully aided teaching institutions in the State subject to the managements entering into separate agreements with its employees and Government. In respect of those institutions which are receiving aid partly, it has been decided to appoint a Committee to examine the modalities of payment keeping in view the Karnataka and Kerala pattern of direct payment to the staff and subject to the condition that no additional financial burden is borne by the government as a consequence.

Medical and Public Health

` Medical— The plan provision has been increased from Rs. 91.29 lakhs in Budget Estimate 1979-80 to Rs. 180.29 lakhs for 1980-81. The increase is due to provision being made for medical buildings under construction and for occupying and staffing such buildings as are completed.

The hospital at King Koti which started functioning will ultimately have 750 beds and will be integrated with the proposed Institute of Medical Sciences to be started in the premises of the Nizam’s Institute of Orthopaedics and Super Specialities.

Public Health—There is a large increase in Plan outlay under this head from Rs. 184.91 lakhs in Budget Estimate 1879-80 to Rs. 598.25 lakhs during next year. This is due to a large number of Centrally Sponsored Schemes being transferred to the State sector as a result of the National Development Council’s decision.

The government of India, in collaboration with the World Bank and the Swedish International Development Agency have sponsored a family welfare programme called the Second India Population Project. This programme will be implemented in the districts of Chittoor, Anantapur and Cuddapah from April , 1980 for a period of 5 years with a total outlay of Rs. 21.66 crores. The commitment to the government of Andhra Pradesh is only the expenditure that would normally be incurred in these three districts as part of the regular Plan allocations. The project aims at intensifying the implementation of the family welfare programmes in these three districts by providing within five years the infrastructure facilities needed including upgrading of identified taluk hospitals and Primary Health Centres.

Urban Water Supply and Drainage Schemes

An amount of Rs. 1,023 lakhs in the Revised Estimate for the current year and Rs. 985 lakhs in the Budget Estimate for next year have been provided for undertaking these schemes.

Out of the above outlay of Rs. 985 lakhs, a sum of Rs. 390 lakhs is provided for the Manjira Water Supply Phase-II and remodeling of the Hyderabad Water Supply distribution system. The Manjira Phase-II is programmed to be completed by the end of 1980-81. An amount of Rs. 200 lakhs is also provided for meeting the expenditu;re on Manjira Phase-III, namely the Singur Projecat. A provision of Rs. 345 lakhs has also been made in; the 1980-81 Plan for Water Supply Schemes in Municipalities inclusive of the Life Insurance Corporation’s loan of Rs. 211 lakhs.

Rural Water Supply Programmes

Government attach the greatest importance to providing drinking water facilities in the rural areas. Our efforts have been directed towards covering 63,802 villages and hamlets in the State with open wells, borewells and protected water supply schemes. In the year 1979-80, 5,650 borewells were drilled as part of this programme. 750 protected water supply schemes out of 895 taken up were completed. We are receiving assistance from the government of India also in respect of the borewells and the protected water supply schemes. 63 mini-protected water supply schemes and 36 protected water supply schemes were completed as part of the assistance programme from the Centre.

To provide drinking water to flouride affected villages in 6 districts of the State we are implementing a special scheme with assistance from the government of Netherlands at a cost of Rs. 11.55 crores. This scheme is expected to be completed by the end of 1981-82.

For the year 1980-81 , Rs. 995 lakhs have been provided for rural water supply.

Housing Programmes

Government have launched the Weaker Sections Housing Programme in a big way. In the rural areas nearly 2.50 lakh low cost houses have been put up by the beneficiaries on a self-help basis with State Government’s assistance under the "Sites and Service" Programme. Essential civic amenities are being provided in these colonies. The Electricity Board has started a programme to provide one bulb for each house for 50,000 houses in selected colonies. The Weaker Sections Housing Programme has been linked up with an economic support programme of "One Milch Animal for One Family" so as to enable the house owners to raise their income level and consequently their living standards along with possession of a house. A massive programme to provide permanent houses has been taken up for those who can afford to repay soft loans from agencies like the Housing and Urban Development Corporation and the General Insurance Corporation. Under this scheme, 10,000 houses in the rural areas and 20,000 houses in the Urban areas are under construction. Government have made efforts to get substantial loans sanctioned by the HUDCO which is the premier agency for financing housing in the Country . while Government had mobilised an assistance of Rs. 23.75 crores from HUDCO during the entire period 1971 to 1979 , in the current year alone we have been able to secure Rs. 17 crores from them. The human yearning for a shelter of one’s own is being mobililsed on an unprecedented scale and the entire district administration is geared to extend technical and organisational support for the programme. Government intend to sustain the tempo of the programme so as to eventually cover the 12 lakh households to whom house-sites have so far been distributed in the State. Government have also taken up a programme to provide permanent houses to the people living within the cyclone prone areas of up to 20 KM. from the sea and have constituted the Andhra Pradesh State Housing Corporation to take up this programme. This Corporation has taken up construction of 11,000 houses with loan assistance from the HUDCO.

A number of schemes for the accelerated development of Scheduled Tribes have been taken up but a major impediment in the implementation of these measures is the lack of residential accommodation for the staff posted to these areas. To over-come this, the Housing Board will take up construction of 3,434 quarters for Government employees in the headquarters of Taluks, Smithies and Primary Health Centres in the scheduled areas.

Weaker Sections Programmes

As the Hon’ble Members are aware the Government are already implementing the twenty Point Programme which lays stress on the uplift of the weaker sections of the society in general and of the Scheduled Castes, Scheduled Tribes and Backward Classes in particular.

The State Government have registered a Society for providing better coaching for the candidates belonging to weaker sections for the All India Services Examinations.

The Andhra Pradesh Scheduled Castes Co-operative Finance Corporation has extended financial assistance to over 2 lakh persons involving a total amount of Rs. 31.47 crores. The government of India have commenced participation in the activities of the Corporation and it is hoped to get substantial contribution from them so that we shall be able to cover a still larger section of the Scheduled Castes families.

Wherever the Government lands are available they are being allotted for construction of houses and wherever necessary private lands are being acquired by the Collectors. As at the end of December, 1979, 50,600 acres of private lands have been acquired for providing house-sites besides assigning 21,384 acres of government lands. The number of families benefited are 11,49.741 and the amount spent up to 1978-79 was Rs. 23.77 crores. Government propose to spend Rs. 11 crores each during 1979-80 and 1980-81 for acquisition of house-sites, provision of sites and services and for housing programmes.

The government have sanctioned the establishment of Special Mobile Courts in the districts of East Godavari, West Godavari, Mahaboobnagar, Cuddapah and Chittoor for quicker trial of offences committed against the Scheduled Castes and Scheduled Tribes coming within the purview of the Indian Penal Code and the protection of Civil Rights Act, 1955. To strengthen the machinery for implementing the Protection of Civil Rights Act , 1955 government have earmarked Rs. 16.02 lakhs to be shared by the State and the Central Governments.

The rates of post-matric residential scholarships and cosmetics and food charges to the boarders in the government hostels have been

Enhanced for both Scheduled Castes and Tribes and Backward Classes. The rates of scholarships applicable to the Scheduled Castes have been made applicable to the students of the Harijan Christian Community also. These measures involve an additional commitment of Rs. 5.25 crores per annum. It is proposed to open more government hostels and also construct more hostel buildings in the coming year. In particular, emphasis has been laid on the construction of hostels for girl students.

Tribal Welfare is ensured through the Integrated Tribal Development Agencies through special allocations and also by the special thrust given to the general sector programmes through the sub-plan approach . further , 17 pockets of tribal concentration outside the sub-plan area have been identified for development under the Modified Area Development approach, which has enabled receipt of substantial special central assistance this year. A similar programme has been launched for the development of Konda Reddis, a tribal group , in the current year with special central assistance. A third scheme for development of another tribe viz., Kolam, is in the offing.

With a view to ensure that funds provided for the Welfare of Backward Communities and Welfare of Other Economically Poor Communities are spent exclusively for the respective categories, government have ordered opening of separate Heads of Accounts from the financial year 1980-81

Mobilisation of Institutional Finances

Co-operative Credit-- The short-term credit for agriculture advanced by the Co-operative Central Banks in the State amounted to Rs. 66.11 crores during Kharif 1979 and they have programmed to advance another Rs. 30 crores during Rabi 1979-80 . thus , the anticipated achievement for 1979-80 works out to about Rs. 96.11 crores at against Rs. 75.14 crores disbursed during 1978-79. For 1980-81 it is proposed to step this up to Rs. 130 crores.

Against a target of Rs. 55 crores laid down by the Reserve Bank of India towards long-term credit for 1979-80 , the Agricultural Development Banks in Andhra Pradesh have so far provided loans of the order of nearly Rs. 34 crores. The Andhra Pradesh Central Co-operative Agricultural Development Bank has been requested to achieve the target by the end of the year. These long-term credits provide for development of ground water resources with mechanised agricultural implements and for schemes like land development , dairy development, sheep rearing, horticulture, common area development and various types of agricultural programmes. An important component of this assistance goes to the Andhra Pradesh State Electricity Board for energisation of pumpsets. During the year 1979-80, 55% of the long-term credit disbursed went to small farmers, Scheduled Castes and Scheduled Tribes. Through this assistance 6,045 dug wells and 1,245 tube-wells and bore-wells were brought into existence and 4,803 oil engines and 1,769 electric motors were financed. 2,620 old wells were developed while 261 tractors were provided to farmers.

The programme for long-term loaning for the year 1980-81 will be of the order of rs.60 crores of which Rs. 50 crores will be under the Agricultural Refinance Development Credit schemes and Rs. 10 crores will be for normal programmes. In the programme for the year 1980-81 minor irrigation, land development and farm mechanisation will continue to receive priority.

Commercial Banks- We have been utilising institutional finances in a big way to supplement our budgetary efforts under the Plan. The second round of District Credit Plans for period 1980-82 which are now under finalisation envisage a credit outlay; of Rs. 546 crores for the year 1980. To mobilise institutional finances, adequate outlays have been made in the Annual Plan for area development and individual beneficiary oriented programmes like the S.F.D.A., D.P.A.P. and the I.R.D. and towards the share capital requirements of the Corporation set up to implement developmental programmes for the welfare of the Scheduled Castes, Scheduled Tribes, Backward Classes and Women and Children.

To ensure provision of credit to the rural poor, we have carefully studied the requirements of bank offices in the Rural and Semi-Urban areas of our State and have placed them before the Reserve Bank of India for a sanction of lilcenses. In pursuance of their new branch expansion policy and in response to the proposals made by us, the Reserve Bank of India have agreed recently to lilcence 219 new bank offices in the 14 deficit districts of our State to be opened in the coming year. We have, however, been pressing the Reserve Bank of India to licence 259 bank offices more—110 in these 14 deficit districts, based on the actual needs of these districts.

During the year 1979-80, one more Regional Rural Bank viz., Sri Anantha Grameena Bank at Anantapur was inaugurated on 1-11-1979, thus bringing the total number of Grmeena Banks have been doing very well, their Credit-Deposit ratio being well above 100% and one of them achieving a Credit-Deposit ratio of 307.25%. we shall be shortly approaching the government of India with proposals for opening of a few more Grameena Banks in our State. With the opening of the new Rural Bank at Anantapur and the large scale sanctioning of Bank branches In the rural and semi-urban areas of the State, the credit gap in these areas will be bridged to a very substantial extent benefiting especially the weaker sections of our people.

In the wake of the severe cyclone that struck Andhra Pradesh in May, 1979 the State Government mobilised the services of the banking system in a big way to render assistance to the cyclone victims and help them in their speedy rehabilitation. Through the Commercial and Co-operative Banks, mobilised credit to the extent of about Rs. 51 crores in the areas affected by cyclone, providing loans to the victims of cyclone who badly-needed loans for raising and rejuvenation of crops, purchase of cattle and Milch animals and for rehabilitation of fishermen and artisans.

Land Ceilings

Out of 4,44,218 declarations received under the Land Ceilings Act, the Tribunals have disposed of 4,43,735 cases as on 1-1-1980. An extent of 11.08 lakh acres has been determined as surplus and 6.12 lakh acres out of this is covered by legal hurdles. The land available for taking possession is 4.96 lakh acres. An extent of 3.72 lakh acres has been taken over and out of this 2.57 lakh acres have been distributed to 1.71 lakh beneficiaries.

Urban Ceilings

This scheme is in operation in Hyderabad, Vijayawada, Visakhapatnam, Guntur and Warangal. Out of 27,045 declarations received so far, 15,377 declarations have been enquired into while enquiries are in progress in the rest. In 1,325 cases an extent of 694 hectares has been determined as surplus out of which an extent of 54 hectares already vested with government in 9 cases under Section 10 (3) of the Act in the Hyderabad agglomeration. The surplus land acquired is proposed to be distributed to government Departments, Housing Board, Corporations etc.

Benefits to Employees

During 1979-80 a number of benefits were extended to government Employees and other Employees.

As the Hon’ble Members are aware , the revision of pay scales and retirement benefits as recommended by the Pay Revision Commissioner have been accepted by government. These are expected to cost Rs. 31 crores per annum.

Subsequent to the issue of the above orders certain modifications have been made in the fitment formula adopted for fixing the pay in the revised scales. Government have also sanctioned House Rent Allowance at 4 per cent of pay in lieu of Compensatory Allowance to the employees working in Taluk Headquarters etc. The government have also agreed to sanction an ex-grate payment of Rs. 50 per employee. These further reliefs are estimated to cost Rs. 7 crores.

Besides this, government have extended certain benefits to Police personnel which are expected to cost Rs. 5 crores per annum.

Certain benefits have also been extended to Medical doctors, government have also decided to make Work-charged Establishment permanent subject to certain conditions and to convert certain categories of Contingent posts to Class IV posts. Certain benefits have been extended to Teaching and Non-Teaching staff of Aided Institutions. Orders have also been issued on Special Pays as recommended by the Pay Revision Commissioner. The total cost of all these measures is estimated to be about Rs. 7 crores.

During 1979-80 and dose of D.A. was sanctioned with effect from 1-11-1979 which; would cost Rs. 7 crores in a full year .

Upgradation of Standards of Administration

The Seventh Finance Commission has recommended a grant of Rs. 19.60 crores for upgradation of standards of administration during the five year period 1979-84 under Judiciary, Police, Jails, Revenue, and Tribal Administration. The government of India have so far accorded administrative sanction for an amount of Rs. 182.60 lakhs consisting of Police Housing (Rs. 150 lakhs), opening of courts (Rs. 8.66 lakhs) , amenities in jails (Rs. 13.94 lakhs) and tribal buildings (Rs. 10 lakhs ). In the 1980-81 Budget we have provided Rs. 507 lakhs consisting of Rs. 325 lakhs for Police Housing , Rs. 20 lakhs for Judiciary, Rs. 35 lakhs for Jails and Rs. 127 lakhs for Revenue Buildings and Residential Buildings and Allowances in Tribal areas.

In order to render our accounting system more efficient we have been computerizing the monthly accounts of the State. The computerisation of accounts will have several advantages. Not only will it enable better control of expenditure and of the ways and means position but would also enable better formulation of the Budget. It will help build up a Data Bank which will enable systematic studies of the trends in both receipts and expenditure. We hope to improve it with; experience.

Having explained broadly the various programmes of the government under different heads, I would now explain the financial position of the State as revealed from the Budget presented to the House for 1980-81.

Accounts 1978-79

The revenue surplus during the year was Rs. 117.13 crores as against the anticipated surplus of Rs. 69.20 crores in the Revised Estimate for that year. This substantial improvement is mainly attributable to the continued buoyancy in our tax revenues particularly under Sales Tax, State Excise, Mines and Minerals and increase in grant-in-aid from government of India.

Revised Estimate 1979-80

The Revised Estimate for 1979-80 indicates a surplus of Rs. 56.47 crores on revenue account compared to Rs. 107.19 crores in the Budget Estimate. The deterioration is mainly attributable to fall in anticipated collections under Land Revenue and more expenditure on revenue account under elections, interest payments, revision of scales of pay, retirement benefits etc. The year is expected to close with a minus balance of Rs. 22.73 crores compared to Rs. 74.86 crores anticipated in; the current year’s Budget. This is mainly due to assuming utilisation of cash reserves available to the State Government.

Budget Estimate 1980-81

The Revenue surplus for next year is expected to be of the order of Rs. 97.27 crores against Rs. 56.47 crores in the Revised Estimate 1979-80. This improvement is mainly attributable to increased receipts on; revenue account under tax revenues and also due to provision in the Revised Estimate 1979-80 for expenditure on drought relief measure schemes which does not find place in the Budget Estimate for 1980-81. The next year’s estimates assume a total Central assistance of Rs. 185.72 crores for financing the Plan. The net effect of the transactions in the year is expected to result in a deficit of Rs. 30.90 crores and the overall deficit taking into account the negative opening balance of Rs. 22.73 crores at the beginning of the year , is expected to be Rs. 53.63 crores .

The deficit has to be covered by collection; of arrears of revenues and economies in non-plan expenditure and further mobilisation of additional resources.


At the time I presented the Budget last year I concluded my speech by drawing attention to the fact that ultimately development was a function of the resources available and that considerable effort at raising resources would have to be put in by us. During the year 1979-80 resource mobilisation was undertaken by the State Electricity Board and the Road Transport Corporation by revision of tariffs and fares. This was partly necessary to cover the increasing costs of operations and it has also , partly enabled these undertakings to step up their Plan outlays next year by over rs.16 crores in; the case of the Electricity Board and over Rs. 12 crores in the case of the Road Transport Corporation . Resource mobilisation by the State itself was however modest since only; three measures were undertaken—one in regard to revision of Motor Vehicle Taxes, certain measures under Sales-Tax and certain measures under State Excise. These measures however, are not commensurate with the increasing demands on the resources of the State. As the Hon’ble Members are aware, we have been able to step up the Plan outlays considerably from year to year from 1974 onwards. We have been able to do this while meeting increasing non-Plan commitments, particularly an regard to emoluments of employees and also maintaining a fairly comfortable reserves position.

It is however necessary that the financial base of the State is widened and strengthened by raising additional resources if such situation is to continue. Measures of taxation can be rationalised, as it is proposed to be done in the case of Land Revenue and taxes can be rendered more progressive, so that their impact on the weaker sections is less and only those who are relatively more fortunately placed in society contribute their mite to the developmental effort in the State. But the fact remains that while pursuing these objectives, the basic objective of raising additional resources would have to be kept in view. Simultaneously, we must no doubt ensure that the resources so raised are utilised in an efficient manner and with a view to seeing that the largest benefit is derived by the weakest sections of the society. I may assure the Hon’ble Members that in the formulation and implementation of our developmental plans this will be our constant endeavor and I appeal to them for their co-operation in this tremendous task, so necessary for laying the foundation of the progress and prosperity of our State.

Sir, with these words, I commend the Budget for approval by this House.


Jai Hind