Previous Budget Speeches




1981 - 82

G.Raja Ram


Speech of Sri. G.Raja Ram
Minister for Finance
Presenting the Budget for 1981-82
To The Andhra Pradesh Legislature
on the 27 th February, 1981.



I rise to present the Budget of Andhra Pradesh for the year 1981-82.

The year that has passed since I last presented the Budget can best be described as a mixed one. It began with several economic problems posed by the severe drought in the previous year. In the case of our State, these problems continued because of large parts of the State being once again affected by drought. At the same time, it is ending on a note which must be said to be more encouraging than the one on which the previous year ended. The present Government, as soon as it took charge, was confronted with problems posed by the floods in Srikakulam District, drought conditions in Rayalaseema and Telangana, farmers issue and demands by the employees. As Hon'ble Members are aware, all these problems have been tackled expeditiously, sympathetically and with imagination. Despite these difficulties, the Plan was reviewed and raised upwards in the middle of the year and several measures have been taken after the present Government took charge, to further reorient our developmental programmes towards the welfare of the weaker sections and in keeping with the spirit and content of the Prime Minister's 20-point programme.

Economic Situation

The year 1979-80 was a difficult year for the country as a whole due to adverse seasonal conditions in many parts of the country and consequent decline in agricultural production. Production in some other sectors also showed decline during the year. Consequently there was a fall in the real national income in 1979-80 as well as the per capita income for the country as a whole. This trend was reflected in Andhra Pradesh also and the state income, at constant price, declined by 2.9 per cent compared to the preceding year, the major contributory factor again being a fall in agricultural production particularly foodgrains. The production of foodgrains during 1979-80 was 95.3 lakh tonnes against the record production of 106.7 lakh tonnes during the previous year. It would, however, be both pertinent and heartening to observe here, that despite the adverse seasonal conditions in that year and the level of production of foodgrains having sharply fallen, it was still higher than the level of production of any previous year except the record production of 1978-79. This would go to show that, as a result of the various developmental programmes taken up, the base of agricultural production has been so strengthened that the effects of adverse seasonal conditions can be mitigated at least to some extent. While seasonal conditions will undoubtedly continue to be an important factor, we can perhaps assume that the variations will take place hereafter around a higher trend level than hitherto.

The agricultural year 1980-81 began on a promising note with the monsoon setting in, in time and with the rains being widespread over the State except in the South. However, this trend did not continue later, particularly in Rayalaseema and parts of Telangana with the result that the south-west monsoon as a whole was deficit in Rayalaseema and although it was near normal in Telangana, there had been long dry spells in many parts of this region also with the result that the khariff crop was adversely affected in parts of almost all districts. Nevertheless, in view of the seasonal conditions being good in Coastal Andhra, notwithstanding devastating flash floods in the Vamsadhara in Srikakulam District, it is anticipated that the production of foodgrains in the current Khariff season will still be good and may be of the order of 72 lakh metric tonnes.

During the Rabi season, Rabi crops like Maghi and rabi jowar were not sown in normal extents on account of failure of rains in September and October months. Nagarjunasagar Project Left Canal was also closed for lining work. Further, as the tanks in Rayalaseema and Telangana Districts did not receive adequate supplies of water the area under second crop paddy under these sources would be considerably less than the normal extent. In order to compensate for the loss in production the Government have localised an additional area of 2.45 lakh acres in Krishna and Godavari Delta systems and it is expected that owing to this foodgrains production during Rabi season may be of the order of 30 lakh tonnes. Thus, for 1980-81 the estimated production of foodgrains may be over 100 lakh metric tonnes.

Similarly, industrial production has been picking up from the later half of 1980 as also the production of power. The labour situation also has shown a favourable trend. Similarly, the Index Number of Wholesale Prices has shown some decline after August 1980, and the rate of inflation has slowed down. Nevertheless, the price and employment situation requires to be carefully watched and timely action taken, both in terms of policies and specific programmes of action. Inflation is a national and even an international phenomena and the major policy instruments are not with the State Government. But a vital role can be played in this regard by the Public Distribution System. We have therefore been paying special attention to this aspect.

Public Distribution System

The fair price shops revived under the Government of India's production-cum-distribution of essential commodities scheme number 25,372 all over the State. Essential commodities like rice, wheat, sugar, edible oils and kerosene are supplied to the needy sections of society through these fair price shops. Other manufactured processed articles like soap, matches, cycle tubes and tyres, note books, nirodh, tea, coffee etc. are also being distributed through selected fair price shops. Controlled cloth is also distributed to the weaker sections through the public distribution system.

Employment Situation

In so far as employment is concerned, it has two aspects viz., educated unemployment which may be predominantly urban and the problem of unemployment in the rural areas. In so far as educated unemployment is concerned, the problem is one of creating specific job opportunities on the one hand and imparting new skills on the other. It is for this purpose that we have taken up the Special Employment Programme to augment and supplement the effort in the plan itself. During the current year it is expected that nearly 18,900 persons will be covered by various ongoing schemes. The provision for 1981-82 is Rs.3.50 crores. But it is expected that it would be possible to cover 28,000 beneficiaries next year with the continuing programmes and new programmes to be taken up.

The more difficult aspect of the problem is rural unemployment. The National Rural Employment Programme is an important step towards solving this problem and a total amount Rs.24 crores will be available for this programme in 1981-82. Rural Development Programmes, such as the I.R.D.P., also provide for increased employment opportunities in rural areas. Local planning will be required for integrating these various programmes so that employment can be guaranteed. The Employment Guarantee Scheme requires raising of certain earmarked resources. All these aspects are being examined and Government proposed to take up the Employment Guarantee Scheme in certain selected areas in the year 1981-82.

Concessions to Farmers

As Hon'ble Members are aware, the Government have given several concessions to the farmers both in respect of land revenue, Government loans, co-operative loans and in respect of minimum price for paddy and sugarcane. As there will be a separate occasion for a fuller discussion of these issues, I am not repeating them here. While the concessions in regard to Government loans and revenues, such as distrust taccavi and land revenue, will have a direct impact on the Budget, in so far as concessions regarding c-operative loans are concerned, the immediate action has to be taken by the co-operative institutions such as the Andhra Pradesh State Co-operative Bank and Andhra Pradesh Co-operative Central Agricultural Development Bank and only thereafter the exact magnitude of the assistance that Government have to give to these institutions would have to be determined. However as an immediate step, I have provided Rs.19 crores in the supplementary estimates for the current year as assistance to both these institutions. In 1981-82 I have for the time being, made only an ad hoc provision and the exact amount will have to be provided as soon as these institutions complete their re-scheduling of loans etc.

The basic solution to the problems of the farmers however is to evolve a policy frame and a set of institutions which will give an element of stability to their incomes. Support prices are one important step in this direction. A good marketing system is another necessary measure and that is why Government have now taken up the development of markets on a very large scale. The third element would have to be crop insurance which alone can ultimately give some sense of security to the farmer. Government have therefore accepted this in principle and proposed to introduce a pilot scheme for crop insurance covering paddy, jowar and groundnut.

Drought Relief

I shall not take the time of the Hon'ble Members discussing details in regard to the drought relief measures being undertaken as there will be a separate opportunity for a more detailed discussion of this important item.

As Hon'ble Members are aware, the Government have declared 131 taluks in 14 districts as drought affected. This declaration will enable the commercial and co-operative banks and other financial institutions, to extend certain concessions such as liberalised credit support to the affected farmers by way of sanction of fresh loans, rescheduling of loans etc. The Government have also ordered that the collection of land revenue, loans, cesses, special land tax, drainage cess and arrears etc., shall be suspended until further orders in the drought affected areas.

The State Government had indicated to the Government of India that an amount of Rs.121.33 crores would be required for various relief measures and for works to be taken up for generating employment in these areas. The Government of India have however indicated, based on the recommendations of Central Team, ceilings to the extent of Rs.23.33 crores. But the State Government have released a sum of Rs.27 crores for employment generation works and relief measures. The Government of India had similarly fixed ceilings of Rs.19.64 crores for drought relief works at the beginning of the year i.e., in the period April to June 1980. We expect that a Central Study Team will visit our state once again to fix similar ceilings for continuance of the drought relief schemes from April 1981 onwards. I may however assure the Members that

irrespective of this Government will ensure that the tempo of drought relief schemes is maintained uninterrupted during this critical period.

In regard to the floods in the Vamsadhara river in September 1980, the Government of India have indicated a ceiling of Rs.7.74 crores based on the recommendations of the Central Study Team. Our actual expenditure in this regard however is likely to be Rs.8.74 crores because, while in regard to the repairs and restoration works we are adhering to the ceilings indicated by the Government of India, in regard to the relief measures such as distribution of foodgrains, supply of plot etc., more had already been spent than the amounts indicated in the ceilings by Government of India.

Sixth Five Year Plan and Annual Plans 1980-81 and 1981-82

As the Hon'ble Members are aware the national Sixth Five Year Plan was discussed and approved by the National Development Council at its meeting held on 13 th and 14 th February, 1981. As part of this exercise we had also formulated proposals for the draft Sixth Plan 1980-85 for Andhra Pradesh in accordance with broad guidelines indicated by the Planning Commission and after discussion by various Working Groups setup at the State level. These draft proposals, which are presented to the Planning Commission and which have been separately circulated to the Hon'ble Members of the Legislature, envisaged a total outlay of Rs.4,100 crores. These were considered by the Official Working Groups setup by the Planning Commission and were subsequently discussed by our Chief Minister and me with the Deputy Chairman, Planning Commission on 10 th December, 1980. Taking into account the available resources, it was decided at this meeting, that the size of the states Sixth Five Year Plan should be fixed at 3,100 crores.

This consist of State's own resources of Rs.1,929.30 crores, Central assistance of Rs.905.70 crores on the basis of the modified Gadgil Formula, additional Market Borrowings of Rs.115 crores allocated to our State as one of the States whose per capita income is below the All India average, and additional resource mobilisation by us of Rs.150 crores. A unique feature of the Sixth Plan proposals is an increase of the percentage for social services from about 12% to 23%.

The draft proposals for the Sixth Five Year Plan submitted to the Planning Commission also included the outlay envisaged for the second year of the Plan i.e., 1981-82. In the discussions held with the Deputy Chairman, it was agreed that the outlay in 1981-82 would be Rs.531.41 crores taking into account the resources position. Despite considerable increases in Non-Plan Commitment such as Dearness Allowance, concessions regarding loans etc., there will be an improvement of the State's own resources for 1981-82 compared to 1980-81. However, the Central assistance envisaged for 1981-82 is only Rs.176.38 crores compared to Rs.200.20 crores this year. Even in 1980-81 the Central assistance originally agreed to was only Rs.173 crores, but additional Central assistance of Rs.27 crores was agreed to by the Planning Commission. At the time the outlay was raised to Rs.501 crores. The Central Assistance for next year is based on the State's share of Central assistance for the Sixth Five Year Plan. The Plan for 1980-81 also took credit for a drawal of reserves, originally of the order of Rs.15 crores. For 1981-82 it is difficult to envisage at this stage what corresponding credit can be taken. The outlay for the Plan 1981-82 had, therefore, to be fixed on the basis of the available resources taking all these factors into account.

The Budget includes an Annual Plan outlay of Rs.538.29 crores as against the outlay of Rs.531.41 crores agreed to at the discussions with the Planning Commission. This increase has become inevitable so as to ensure that the level of outlay of every Department is maintained in 1981-82 atleast at the level of 1980-81 and also to ensure that there is some step up in case of sectors like welfare of Scheduled Castes and other weaker sections. However, just as in the current year the Plan was reviewed during the course of the year and the outlay was raised so also we hope that during the course of next year we will be able to review and raise the outlay on the Plan now proposed, depending upon the growth of our own resources, additional mobilisation of resources and additional Central assistance.

Out of the total outlay of Rs.538.29 crores the allocation for Irrigation and Power is Rs. 295.53 crores which comes to about 55%. This is slightly higher than the percentage in the Sixth Plan as a whole but has become necessary because of inevitable commitment in these two sectors. If there is an upward revision of the Annual Plan we hope to see that the percentage allocation for other sectors will go up.

I shall now briefly mention some of the more important programmes included in the Plan Budget.


The total allocation for Agriculture and allied sectors is Rs.60.29 crores. In regard to agriculture, the main thrust has necessarily to be in providing the basic infrastructure and in-puts viz., irrigation on the one hand, and supply of fertilisers, improved seeds, pesticides etc. on the other. The large allocation for irrigation therefore is essential for providing a basic input for agriculture. As I have already mentioned, the progress achieved in our agricultural programmes can be measured by the fact that our level of production even in years in which the State is affected by adverse seasonal conditions, is higher than the levels of production that had been achieved in good years prior to the implementation of these programmes. The State has been allotted 3.90 lakh tonnes of N.P.K. for Khariff 1981 which is the highest allotment received so far. The target of foodgrains production for the year 1981-82 is 104 lakh tonnes. The main plank of our strategy is larger coverage with high yielding varieties with recommended package of practices. It is also proposed to introduce intensive Agricultural Extension Programmes under the Training and Visit System in the entire State under a World Bank Scheme. Two more farmers' training centres are also proposed to be established to impart training in latest Agricultural Technology.

Rural Development

Prior to 2-10-1980 a number of special Rural Development Programmes such as S.F.D.A., I.R.D.P., D.P.A.P., were implemented in the State with a view to increasing the flow of credit and assistance to the small and marginal farmers and agricultural labourers so as to enable them to create and own durable assets in agriculture, minor irrigation and take up subsidiary occupations like poultry, dairying, piggery etc., to supplement their income. From 2-10-1980 the Government of India have extended I.R.D.P., to all the blocks in the State numbering 329 with a uniform outlay of Rs.5 lakhs to each block for 1980-81 to be shared by the Centre and the State on 50:50 basis. The special programmes which were implemented prior to 2-10-1980 such as S.F.D.A., are now merged with I.R.D.P. The outlay will go up to Rs.6 lakhs for each block in 1981-92 and to Rs.8 lakhs in 1982-83 and will remain at that level till 1984-85. The allocation for Rural Development is Rs.15 crores of which Rs.5.70 crores is for D.P.A.P., and Rs.9.30 crores for I.R.D.P. These amounts are the State's share and as such equal amounts will be additionally available from the Government of India.

Animal Husbandry

It is proposed to improve the animal health coverage by strengthening the institutions at important growth centres. An additional unit for producing viral vaccines has been started at Samalkot and the existing biological production unit at Hyderabad is being improved. The Department is switching over to the frozen semen technology from the chilled liquid semen technology in order to ensure better implementation of the cattle development programme, it is estimated that by the end of March, 1981 about 1,000 field units out of the total 2,300 now using chilled semen will be supplied with frozen semen.

A farm to improve the Ongole breed is established at Ramathirtham in Prakasam District. It is also proposed to popularise and improve goat production under semi-intensive system through weaker sections without detriment to the forest plantation programmes.

Recent droughts have shown that fodder becomes a serious problem. As a long term programme to combat drought it is proposed to establish two more fodder banks to conserve forest hay in addition to the existing two banks. Establishment of a fodder pellatisation plant to supply forest hay and cultivated fodder fortified with further nutrients in pellatised form for easy and long distance transport at much cheaper cost is under the Government's consideration

An outlay of Rs.149.51 lakhs has been made in 1981-82.

Dairy Development

The Dairy Development Corporation has set up 76 dairy units of different capacities and 25 more are under various stages of construction. Procurement of milk by the Corporation went up to 1692 lakh litres a day during 1980-81 as against 1543 lakh litres during 1979-80. The annual turn over of the Corporation has increased from Rs.36 crores in 1979-80 to Rs.45 crores in 1980-81.

The Government have entered into an agreement with the Indian Dairy Corporation for implementing Operation Flood-II Programme in the State covering 16 districts. In the Programme it is envisaged that the Corporation will provide a sum of Rs.50 crores financial assistance for dairy development in the project area. With this financial assistance 7 major dairy processing units will be established by the end of the programme in 1986. The liquid milk processing capacity will be increased to 19 lakh litres a day as against the present level of 6 lakh litres a day. A tentative plan allocation of Rs.500 lakhs has been made in the Sixth Five Year Plan for Dairy Development Programmes in 7 districts not covered by Operation Flood-II Programme.

For 1981-82 a provision of Rs.100 lakhs has been made for Dairy Development.

National Rural Employment Programme

So far the State Government received 4,89,900 tonnes of foodgrains under Food For Work Programme and utilised these foodgrains for creation of durable assets like Roads, Minor Irrigation, Tanks and School Buildings. For 1980-81 the Government of India have evolved a new scheme called National Rural Employment Programme and allotted 1,05,000 metric tonnes of foodgrains plus Rs.7.39 crores towards material cost and Rs.2.36 crores towards 1 Kilogram wage component. It is proposed to utilise these resources for various works as provided in the drought affected districts where drought works are in progress. In 1981-82, a provision of Rs.12.00 crores has been made as State share for this programme which will be matched by an equal amount by the Government of India.


In 1980-81 it is expected that an irrigation potential of 2.04 lakh hectares under major and medium irrigation projects would be created by the end of June 1981. Of this, it is estimated that 1.51 lakh hectares will under Nagarjunasagar Project and 35,000 hectares under Sriramsagar Project.

The provision made in the Plan Budget 1981-82 for Irrigation is Rs.140 crores. Of this, the amount earmarked for Nagarjunasagar Project is Rs.42 crores, for Sriramsagar Project Rs.38 crores and for Godavari Barrage Project Rs.8.50 crores. The additional irrigation potential expected to be created by the end of June 1982 is 29,000 hectares under Nagarjunasagar project and 35,000 hectares under Sriramsagar Project.

In addition, during this period a further irrigation potential of 23,340 hectares is expected to be created under other major and medium irrigation schemes. Preliminary work will be taken up on three important schemes viz., Priyadarshini Jurala Project, Polavaram Project and Srisailam Right Bank Canal.

Minor Irrigation

Under Minor Irrigation and irrigation potential of 7,640 hectares is expected to be created by the end of June 1981. Investigation and exploration of ground water resources of the State have been intensified and this will be continued during the year 1981-82. The Andhra Pradesh State Irrigation Development Corporation has programmed to drill 405 tube wells costing Rs.537.83 lakhs during 1980-81 and create an irrigation potential of 12,324 hectares.

In 1981-82 the provision for minor irrigation is Rs.900 lakhs. This will be supplemented by the amounts available under Drought Prone

Area Programme and Drought Relief Works.

Command Area Development

The Command Area Development concept aims at reducing the gap between the creation of irrigation potential and its utitilisation.

In addition to the implementation of important programmes like systematic land development, intensive agricultural extension, provision of credit and construction of command area roads and integrated water management programme has been implemented in 105 majors during the Khariff season of 1980-81 covering an area of about 2 lakh acres in Nagarjunasagar Project, Sriramsagar and Tungabhadra Project Command areas. This system ensures that Irrigation is provided to the entire command area thereby eliminating excessive use of water in the upper reaches and also solving the tail end problems. To ensure equitable/dependable supply of water to all the farmers under an outlay, Warabandi Programme is taken up in 338 minors covering an area of about 95,000 hectares. With this the farmers are able to make full use of the available irrigation potential.

According to the revised programme formulated, ayacut roads in Nagarjunasagar Project over a stretch of 953 kms, has to be completed by 1984-85. So far 600 kms of road works have been taken up out of which 466 kms were completed by December 1980. It has been proposed to take up 77 kms of new road works during 1981-82. A similar road programme has also been taken up in Sriramsagar Project command area over a length of 460 kms and so far about 406 kms of roads have been completed till the end of December, 1980. It has been programmed to clear the balance length of 54 kms of roads during the subsequent years. The allotment proposed in 1981-82 for C.A.D. is Rs.750 lakhs.


In April 1980 the first unit of 100 MW of Nagarjunasagar Pumped Storage Scheme was commissioned and the second unit was commissioned in January 1981. The second unit of 210 MW in the Vijayawada Thermal Power Station has also been commissioned. It is thus a matter of great satisfaction that a huge block of 410 MW was added during a single year. With these additions the total installed capacity would be 2,298 MW and the grid could meet a maximum demand of 1,248 MW so far.

In 1980-81, 1200 villages of which 829 were under Rural Electrification Corporation programmes, and 500 hamlets were electrified and 36,000 pump-sets were energised. During 1981-82 another 445 MW installed capacity will be added with the commissioning of III and IV units of Nagarjunasagar Pumped Storage Scheme each with a capacity of 100 M.W. and I and II units of 110 MW each at Srisailam and the commissioning of a 25 MW unit at Donkarayi Power House and the installed capacity would rise to 2.743 MW. During 1981-82 the Board plans to electrify 1,600 villages and to energise 49,000 pump-sets.


The trend of faster industrialisation of the State is clearly discernible from the fact that 19 units with an investment of Rs.343.72 crores went into production during 1980. One of the important units that went into productions the Sponge Iron India Limited a Joint Venture of the Centre and the State Governments established with the assistance of U.N.D.P. During 1980, 107 Letters of Intent registrations were received for establishing Industries in the State covering a wide range in the fields of food, chemicals, engineering , electricals, electronics, minerals etc. The State has also received 11 Letters of Intent to set up major cement plants with the total capacity of 5.5 lakh metric tonnes, the total capital outlay in respect of these major cement units will be around Rs.485 crores. This is in addition to the 14 Letters o Intent received for the establishment of mini-cement plants with an approximate capital outlay of Rs.44.84 crores. An outlay of Rs.2317 lakhs has been made for Industries and Minerals for 1981-82.

The Andhra Pradesh Industrial Development Corporation took up 14 new projects for promotion. The Corporation has so far promoted/assisted 236 units in the large and medium scale sectors with a total investment of Rs.920 crores generating employment potential of 2 lakhs. Of the said Rs.920 crores the investment in the backward areas is of the order of Rs.520 crores. The volume of the average annual production of the units with which the Corporation is concerned is estimated at Rs.300 crores. The Corporation also undertook the rehabilitation of 11 sick units, involving a share capital investment of Rs.35.00 lakhs besides loan assistance to the extent of Rs.100 lakhs. A provision of Rs.450 lakhs has been made in Budget 1981-82 for investment in Andhra Pradesh Industrial Development Corporation.

The main promotional activities of Andhra Pradesh Industrial Infrastructure Corporation cover acquisition of land for industrial development, establishment of industrial estates and IDAs, construction of houses for industrial workers, etc. The Corporation has so far in the current year incurred an expenditure of Rs.126.76 lakhs on construction of sheds, laying of plots, roads, water supply, housing etc. The Government have since decided to set up District Industries Centres in the Eight Districts not covered so far. It is hoped that the District Industries Centres will give the small industries in particular the assistance and succor they require.

As Hon'ble Ministers are aware the crushing of sugarcane during 1979-80 was low throughout the country and also in our State. The position is expected to improve considerably in the current year. In addition to the existing Co-operative Sugar Factories six new Co-operative Sugar Factories of 1,250 TCD each are under various stages of construction.


The allocation for Handlooms in 1981-82 is Rs.300 lakhs and Rs.80 lakhs for Sericulture. The handloom industry witnessed alround development in the State during 1980-81. The process of consolidating the progress achieved in the coverage of weavers by co-operatives received further impetus. Admission of 6,000 new weavers into co-operatives is expected to be completed by the end of the current financial year. The production in Primary Weavers Co-operatives is estimated to go up from Rs.30 crores in 1979-80 to Rs.36 crores in 1980-81, Infrastructural facilities with an estimated cost of approximately Rs.330 lakhs for post-loom processing are nearing completion. Pre-loom facilities involving an investment of Rs.42.85 lakhs are expected to be completed before the end of the current financial year. Action is also under way to set up six more Co-operative Spinning Mills.


In elementary education, the strategy has been to increase enrollment in schools by increasing the facilities and offering certain incentives such as attendance, scholarships in the case of girls, book grants, mid-day meals etc. By the end of 1980-81 the enrollment of Classes I to V and Classes VI and VII is expected to be 52.35 lakhs and 8.60 lakhs respectively which accounts for 83 % and 33% of the corresponding age groups. It is necessary therefore to intensify these schemes to improve upon these percentages so that by the end of Sixth Plan period, we can reach 95.5% in the age group of 6 to 11 and 50% in the age group of 11 to 13. Special effort in this regard is required for enrollment of girls.

The other aspect of the strategy has been to aim at quality improvement on a selective basis. With this end in view, the Abhudaya Pradhamika Vidya Samstha was set up. Similarly, residential educational institutions also are expected to provide an opportunity for talented children in the rural areas. One more residential school was opened during the current year at Keesaragutta in Rangareddy District in addition to the existing six.

During 1980-81, 1380 additional Non-Formal Education Centres were opened at the rate of 60 centres in each of the 23 blocks in the districts with effect from 2-11-1980. The number of beneficiaries in these 1380 centres in 34,500. Under the National Adult Education Programme, there are 23 projects in all the Districts put together out of which 18 projects were funded by the Government of India and the remaining 5 projects by the State Government. Each Project, which is located at the selected block headquarters of the district has 300 centres and the number of beneficiaries in all the 6,900 centres taken together is 1,88,000.

Under the scheme of introduction of vocationalised courses at plus 2 level, vocational courses have been introduced in 48 Government Junior and Degree colleges and also in 23 private junior and degree colleges in 1980-81.

There is a constant demand for opening of Junior/Degree Colleges. During the current academic year the Government started eight Government Degree Colleges and twenty Government Junior Colleges. In addition to this, the Government permitted the starting of six private Degree Colleges, one private B.Ed. College and eighteen private Junior Colleges during the current academic year.

In accordance with a decision taken earlier the Government have admitted 11 private Degree Colleges, one Law College, 3 Post Graduate Centres, 15 Junior Colleges and certain unaided sections in 35 Degree Colleges to grant-in-aid from 1-4-1980 under the third phase.

For General Education a total provision of Rs.990 lakhs has been made in the Budget for 1981-82.

The Government propose stepping up the tempo of Youth Services and Sports. An allocation of Rs.50 lakhs for Youth Services and Rs.80 lakhs for Sports has been made in the Plan for 1981-82.

Training and Technical Education

Under the Craftsman Training Programme courses have been diversified during 1980-81 for imparting training in certain popular trades which are in great demand. New courses have been started under the Sub-plan exclusively for the benefit of Scheduled Castes and Scheduled Tribes. An additional Industrial Training Institute

was established during 1980-81 at Visakhapatnam with 472 seats to meet the man-power requirements of Visakhapatnam Steel Plant. Apart from this 160 additional seats have been introduced in other ITIs for the same purpose. "On-the-job" training programme is being arranged for ex-I.T.I. candidates and others in Industrial establishments to meet the man-power requirements of Visakhapatnam Steel Plant. Three new Polytechnics were established in 1980-81.

For Technical Education and Training an outlay of Rs.138.50 lakhs has been made for 1981-82.

Medical and Public Health

The allocation for Medical and Public Health is Rs.11 crores in 1981-82 of which about Rs.289 lakhs is for Medical schemes and the balance of Rs.811 lakhs for Public Health schemes. Under Public Health about Rs.439 lakhs will be for the normal public health Schemes which include various disease control schemes. These are supplemented To a large extent by Centrally Sponsored Schemes. About Rs.372 lakhs are meant for the Minimum Needs Programme. Under the M.N.P. Primary Health Centres are to be progressively upgraded and new Sub-Centres are to be opened. In the current year upgradation of 35 Primary Health Centres to 30 bedded hospitals and opening of 2000 new sub-centres are proposed. In 1981-82 it is proposed to construct staff quarters at 20 P.H.C.s. and upgrade more P.H.C.s. 4 new P.H.Cs. are proposed to be established in tribal blocks. Similarly, it is proposed to progressively improve the taluk hospitals by converting these into 30 bedded hospitals and increase the bed strength at district hospitals also.

In the Teaching Hospitals, it is proposed to further improve facilities particularly certain facilities for specialties. The Regional Eye Hospital at Kurnool is in progress. It is proposed to increase the number of beds at the Cancer Hospital at Hyderabad and add Cobalt Therapy Unit at Tirupati, Warangal and Kurnool.

Urban Water Supply

The provision for Urban Water Supply in 1981-82 is Rs.11.20 crores. This falls broadly under three categories. About Rs.411 lakhs is intended for water supply schemes in municipalities while Rs.326 lakhs are provided for Manjira and Hyderabad Water Works and Rs.300 lakhs for the Singur Project.

Rural Water Supply Schemes

During 1980-81 the Panchayat Raj Engineering Department covered 588 villages and hamlets in the State with open wells, bore-wells and Public Works Schemes. The Netherlands assisted scheme costing Rs.11.55 crores and covering 171 fluoride affected villages in the districts of Prakasam, Nalgonda etc., has made considerable progress. It is expected that the scheme would be completed by the end of 1981-82. During 1981-82 the Panchayat Raj Department is planning to execute 2,351 bore-wells, 100 open wells and 918 Mini/Major protected water supply schemes costing Rs.23.51 crores.

Urban Development

The allocation under Urban Development falls broadly under 3 categories viz., environmental improvement of slums, improvement of the twin cities and assistance to the various Urban Development Authorities. Environmental improvement of slums is a scheme to which the Government attached great importance. The allocation for this purpose made in 1981-82 is nearly Rs.300 lakhs. The amount provided for the improvement of the Twin Cities is Rs.134 Lakhs while the amount provided for assistance of the three Urban Development Authorities is about Rs.207 lakhs.

Weaker Sections Programmes

Programme intended to benefit the weaker sections broadly cover programmes for the Scheduled Castes and Scheduled Tribes, Backward Classes, Economically Backward Classes and other disabled categories such as physically disabled etc. From a functional point of view however, the weaker sections programmes can be broadly divided into three categories viz., (a) economic support programmes, (b) housing programmes which cover acquisition of house sites, sites and services programmes and construction of houses and (c) educational programmes, which cover scholarships and hostels. Economic support programmes are also financed by Co-operative Finance Corporations for Scheduled Castes, Backward Classes etc. The other important instrument for the economic development of the Scheduled Castes is the concept of a Special Component Plan.

Special Component Plan

Economic improvement of the Scheduled Castes is necessary for their eventual social emancipation. As part of this effort, the Prime Minister has stated that 50% of the Scheduled Caste families should be helped to cross the poverty line in the Sixth Plan period. All Collectors in the State have been instructed to assist at least 5,000 Scheduled Caste families in their districts to cross the poverty line during the year 1980-81 under various development schemes. Planned efforts are being made to mobilise the resources required to achieve this objective. Through the Special Component Plan to be implemented by the various departments it is proposed to assist around 43,000 Scheduled Caste families. The Andhra Pradesh Scheduled Castes Co-operative Finance Corporation is the agency that is charged with this responsibility with the close co-operation of the Rural Development Department, various technical and development departments of the State and the Commercial and Co-operative Banks.

Housing Programme

With a view to helping the people belonging to weaker sections to build their own hutments and houses, the Government launched the sites and services programme. In 1980-81 a provision of Rs.8 crores was made for land acquisition for weaker sections. During 1980-81, 16,593 families belonging to the weaker sections were provided with house sites. This effort will be continued on a similar scale in 1981-82 also.

The provision made for Housing in the Plan is supplemented by obtaining loans from the HUDCO. The total programme is therefore much larger than the actual plan provision of Rs.7 crores for this purpose.

Under Sites and Services Programme, assistance is being provided to construct low cost temporary structures on the sites distributed by the Government to the weaker sections. Under this scheme during 1980-81, 3.5 lakh low cost houses are under construction at a total cost of Rs.14 crores. Government have now decided to raise the assistance for construction of houses from the present level of Rs.400 to Rs.1,000 a house. The programme for 1981-82 will be drawn up taking this into account.

The Andhra Pradesh State Scheduled Castes and Tribes Co-operative Housing Societies Federation Limited has taken up permanent housing schemes in the classified urban areas and rural areas of the State with financial assistance from various financing agencies like General Insurance Corporation and Housing and Urban Development Corporation. So far 21,159 houses have been sanctioned in classified urban areas at an estimated cost of Rs.15.32 crores involving a loan component of Rs. 12.13 crores. Under the rural housing schemes, so far 31,258 rural houses have been sanctioned at an estimated cost of Rs.9.42 crores involving a loan component of Rs.4.79 crores.

Welfare of Scheduled Castes, Scheduled Tribes and Backward Classes

The total provision under this head in 1981-82 is Rs.17.26 crores of which Rs.949 lakhs is for Harijan Welfare, Rs.518 lakhs is for Backward Classes and Rs.259 lakhs is Scheduled Tribes.

Harijan Welfare

112 new hostels were opened during 1980-81 and boarding facilities were provided to an additional 24,000 Scheduled Caste students during 1980-81. 236 boys hostel buildings and 117 girls hostel buildings are at various stages of construction in the State.

Besides the State Plan provision, special central assistance is also available for economic development programmes for Scheduled Castes in core sectors like Animal Husbandry, Agriculture, Village and Khadi Industries. The Government of India have made an allocation of Rs.5.41 crores in 1980-81 and it is hoped that similar assistance will be available in 1981-82 also.

The Andhra Pradesh Scheduled Castes Co-operative Finance Corporation proposes to assist during 1981-82, 1,15,000 families to cross the poverty line as part of the Prime Minister's directive in this regard at an estimated financial outlay of Rs.90 crores.

Backward Classes Welfare

The concessions granted to the backward classes have been extended in 1980 for a further period of 10 years. Income generating schemes for the economic development of the backward classes are promoted by the Andhra Pradesh Backward Classes Co-operative Finance Corporation. Government propose to step up very substantially their contribution to the share capital of this Corporation in 1981-82 so that it could assist the artisans, occupational groups and others among the backward classes with viable schemes.

An allocation of Rs.517.80 lakhs has been made in 1981-82 for the welfare of Backward Classes.

Tribal Welfare

For the tribals, 24 new hostels with a strength of 50 each have been sanctioned in 1980-81. In 1981-82, there will be larger provisions for hostels and ashram schools. The tribal sub-plan covers a tribal population of 11.81 lakhs. While the sub-plan for 1980-81 envisaged an expenditure of Rs.27.90 crores to cover 22,750 tribal families under various economic upliftment schemes. During 1981-82, an outlay of Rs.41.65 crores is proposed to benefit 30,000 families.

With a view to facilitating filling up of a large number of reserved vacancies in the technical categories of various public and private sector undertakings, a Residential Industrial Training Centre was started with an investment of Rs,9.32 lakhs at Upper Sileru in Visakhapatnam District during 1980-81.

During 1980-81 the Andhra Pradesh Scheduled Tribes Co-operative Finance Corporation implemented programmed involving an outlay of Rs.161.53 lakhs to benefit about 6,000 tribal families. A more ambitious programme is envisaged for 1981-82.

Old Age Pensions

In the budget for 1980-81, an amount of Rs. 151 lakhs was provided under non-plan for old age pensions. During the year Government allotted an additional amount of Rs.65 lakh to cover 65,000 more cases. Government have also decided to sanction old age pensions at a uniform rate of Rs.30 per mensum irrespective of the place of residence with effect from 1-4-1981. The total coverage for 1981-82 will be 1.5 lakh pensioners involving an outlay of Rs.5 crores. Thus the coverage of beneficiaries would be more than doubled while providing for an increase in the rate of pension in most areas of the State.

Mobilisation of Institutional Finance

The State Government have been making concerted effort to mobilise institutional finances for the overall development of the State particularly in the priority sector by formulating and implementing credit plans. The second round of district credit plans which has been finalised for all the districts in the State envisages a credit mobilisation of Rs.933.71 crores during the period 1980-82 as against an achievement of Rs.845.04 crores over 5 years during 1974-79 through the first round of district credit plans.

Regional Rural Banks

Encouraged by the experience of the 4 Grameena Banks which are doing well both in regard to loaning and branch expansion, the State Government have recently proposed the opening of 5 new regional rural banks covering 10 districts of the State.

Advanced by Banks

There has been a marked increase in the overall loaning by the various banks. It may be mentioned that the Reserve Bank's stipulation that at least 40% of the loaning should be to the priority sector by 1985 was reached and even surpassed by the banks in Andhra Pradesh by 1980 itself.

Co-operative Credit

Short and medium term loaning in the co-operative sector is likely to cross the Rs.100 crore mark during 1980-81 as against Rs.75 crores during 1979-80. The Long Term Co-operative loaning for land development schemes is likely to reach the level of Rs.65 crores by the end of this year.

Benifits to Employees

As Hon'ble Members are aware Government have been extending various concessions to employees from time to time, the most substantial of these in recent times having been the implementation of the recommendations of Pay Revision Commissioner. Recently Government decided to extend certain further concessions to the employees. Government have already been sanctioning additional dearness allowance for every 8 point rise in the cost of living index. With regard to the date from which each increase of the rate of Dearness Allowance is to be given effect of the Government of India. During 1980-81 Government have increased the rates of dearness allowance four times i.e., up to November 1980 from 5% to 15% in the case of employees drawing pay up to Rs.500 p.m. and from 4% to 12% of pay in the case of employees drawing above Rs.500 p.m. The further increase in dearness allowance that is likely to take place in this financial year itself will not cost its full financial burden this year but will have to be estimated for the full year 1981-82. This alone is estimated to cost an extra Rs.30 crores next year. The benefit of House Rent Allowance at 4% of pay has been extended to the employees stationed at all Panchayat Samithi headquarters. Government have decided to convert all full time contingent posts which have been in existence for more than 5 years into regular posts in the last grade service with effect from 1-4-1981. Government have also decided in principle to give employees opportunities for advancement after 10 and 15 years of service in a scale. Government sanctioned an ex-gratia payment of Rs.100 to all employees. It is estimated that the total cost of all these benefits will be Rs.5.25 crores in a full year besides Rs.4.70 crores in 1980-81 for the ex-gratia payment.

Accounts 1979-80

The Revenue Surplus during the year was Rs.121.29 crores as against the surplus of Rs.56.47 crores in the Revised Estimate for that year. This substantial improvement is mainly due to the continued buoyancy in our tax revenues particularly under State Excise, Sales Tax, Taxes on Vehicles, Stamps and Registration Fees and increase in the State's share in Income Tax and Union Excise duties and grants-in-aid from Central Government.

Revised Estimate 1980-81

The Revised Estimate results in a surplus of Rs.88.17 crores on Revenue account compared to Rs.97.27 crores in Budget Estimate. The deterioration in Revenue surplus inspite of a substantial increase in Revenue receipts by Rs.130.42 crores is mainly due to providing for enhanced rates of dearness allowance, payment of arrears of pay to certain employees due to fixation in revised scales of pay, ex-gratia payment to employees and expenditure on drought and flood relief schemes. The year is expected to close with a cash balance of Rs.1.35 crores after taking into account drawal from the cash reserves of the State.

Budget Estimate 1981-82

The Revenue surplus of next year is estimated at Rs.80.62 crores against Rs.88.17 crores in Revised Estimate 1980-81. This slight deterioration compared to Revised Estimate 1980-81, inspite of a substantial increase in Revenue receipts and non-inclusion of provision for extra expenditure on natural calamities, is due to providing not only for a full year's expenditure towards increase in the rates of dearness allowance sanctioned this year but also for dearness allowance likely to be sanctioned based on the cost of living index, and making provision for interest payments on increased cumulative loans from Government of India etc., expenditure on Panchayat Raj Elections and increased provision for maintenance of roads. The next year's estimates assume a Central assistance of Rs.176.38 crores for financing the State Plan Schemes. The overall transactions of the year are expected to result in a minus cash balance of Rs.63.32 crores. The year is expected to close with a minus cash balance of Rs.61.97 crores after taking into account the plus cash balance of Rs.1.35 crores at the beginning of the year. This deficit has to be covered by collection of arrears of revenue, economy in expenditure and mobilisation of additional resources.


As the Hon'ble Members are aware the size of the State Plan has been growing from year to year and in 1980-81 crossed the Rs.500 crores mark for the first time. The Annual Plan outlay envisaged for the year 1981-82 is Rs.538.29 crores. This is the minimum outlay required in order to maintain the tempo of development. However, as the central assistance for the implementation of Plan programmes is not likely to rise correspondingly with the size of the plan, it will be necessary to raise additional resources in order to implement the Annual Plan and the Sixth Five Year Plan in full. The financing pattern of the annual plan 1981-82 takes additional resource mobilisation of Rs.15 crores into account.

As I mentioned at the very outset, the current year is closing on a note more encouraging and optimistic than the one on which the previous year closed. Despite the fact that serious problems still confront us, such as inflation at the national level and continued drought conditions at the State level, the economy has shown a certain strength and resilience which can give us confidence that these problems can be tackled so as to achieve our goal of growth with stability and social justice. The Sixth Plan which we have finalised both at the national and State level is based on this confidence and incorporates our commitment to the weaker sections. It will be our endeavour to justify the confidence that the people have reposed in us. The problems of the farmers and rural areas have been focused more sharply of late and as I have explained earlier, we have shown not only an awareness of these problems but also the ability and the will to tackle them. The Sixth Plan period can be one in which we can achieve a break-through in the diversification of the economy of our State and in its alround development. We have the natural resources and the human talent for this purpose. All the we require is concerted and co-operative effort. The Budget I have presented, incorporating as it does, the Plan for this year is a part of this overall effort and as such, I am sure it will receive the support of the Hon'ble Members.

Sir, with these words I commend the budget for approval of this House.