Previous Budget Speeches


Speech of

Sri. P.Mahendranath

Minister of Finance

Presenting the Budget for 1987-88

The Andhra Pradesh Legislative Assembly
on the 11th July , 1987.



I rise to present the Budget of Andhra Pradesh for the year 1987-88.

Hon’ble Members may kindly recall that I had the privilege of presenting a "Vote-on-Account" Budget seeking sanction of expenditure for a period of six months up to the end of September’87 at the brief Session of this House, in March 1987. I had, then explained the democratic socialist objective this Government have adopted and this Government’s commitment to the economic advancement and welfare of the poor, deprived and weaker sections of the Society, particularly the members of the Scheduled Tribes, The Scheduled Castes and Backward Classes, who have not received their due share from decades of planned development efforts. I had also indicated our resolve that the Annual Plan of l1987-88 as well as the Annual Plans for the coming years should bear the distinct impress of the Government’s commitment to tilt our development efforts in favour of these sections of our people, so as to help them become economically self-reliant and free from socio-economic dependence on a permanent basis. I had also indicated the broad contours of the major policy initiatives of this Government, highlighted the areas of high priority and briefly outlined the various programmes contained in the Budget.

The year 1986-87 was an year of unusual combination of adverse circumstances, being the third year of severe drought in succession, and at the same time the year of a flood of rate severity. Our farmers and agricultural labourers have been able to go through the crisis situations with fortitude and courage with the timely assistance and help provided by the Government. The two natural calamities have caused severe strains in the economy and on the exchequer. Agricultural production has suffered badly. Extensive damages occurred to the Kharif crops in 1986-87, on account of failure of the South-West monsoon and unprecedented floods in the river Godavari which submerged and damaged large tracts of crops. According to preliminary estimates, the out-put of foodgrains during Kharif 1986-87 was 59.55 lakh tonnes in comparison to 73.63 lakh tonnes during the corresponding Kharif 1985-86. There was failure of the North-East monsoon also as a result of which dry crops as well as wet crops, cultivated under minor irrigation sources, suffered. While the production of rice in Rabi 1986-87 is expected to be about 20 lakh tonnes as against 19 lakh tonnes in Rabi 1985-86, the production of other Rabi food-grains is likely to be only 8.5 lakh tonnes, being substantially lower than the production of 11 lakh tonnes in Rabi 1985-86. The level of rice production achieved in Rabi is a pointer to the success of massive second crop programme in the Krishna-Godavari delta. This was achieved inspite of the extensive damage suffered by the irrigation system. Much of the first crop in the delta was saved by the timely restoration of the system; and a high level of second crop localization was possible by systematic planning of water management to make use of the available water to irrigate maximum area. A massive programme of input subsidy to all the affected farmers regardless of the size of their holding was implemented. A sum of Rs.25 crore was spent on the scheme of 50% subsidy on inputs as against the normal Central pattern of 25% to 331/3% subsidy. This scheme has in no small measure contributed to the bumper harvest in the affected areas during the second crop season.

I would now like to briefly dwell on the relief works and rehabilitation measures undertaken during the drought and floods. We had submitted a Memorandum to the Central Government requesting for assistance of Rs.1.226 crores for rescue, relief and rehabilitation measures and for repairs and restoration of assets damaged during floods. The Government of India fixed, however, a very low ceiling of Rs.132.37 crores. Further, our repeated requests to provide Central assistance treating this as a calamity of rare severity was turned down. The State Government have so far released a sum of Rs.171.77 crores up to the cut-off date ie., 30th June, 1987. As against the ceiling of expenditure of Rs.132.37 crores extended by the Government of India, the expenditure by the end of the financial year was Rs.132.65 crores and schemes to the tune of Rs.39.12 crores were continuing. The Government of India have already extended the date for the completion of the schemes till the end of June, 1987. The total expenditure on account of the various relief and rehabilitation schemes is expected to match the release.

During the drought of last year, 587 Mandals of 14 district have suffered. In the Memorandum on drought submitted to the Government of India, we sought Central assistance of Rs.350.53 crores to undertake drought relief and employment generation schemes in the affected tracts. The ceilings of expenditure indicated by the Government of India for the period from October, 1986,to March , 1987, and for the first quarter of 1987-88 are Rs.23.19 crores and Rs.25.19 crores respectively. However, keeping in view the acute drought conditions prevailing, the State Government had taken up various relief schemes considerably in excess of this ceiling. By the end of March, 1987,an amount of Rs.35.09 crores was spent and the relief works were continued. In a supplementary Memorandum submitted to the Government of India, a request was made to provide additional Central assistance of Rs.27.20 crores for drinking water supply, gratuitous relief and special nutrition programme. This was negatived by the Government of India.

The successive drought spells had virtually emptied the storage in the hydel power reservoirs of the State and consequently the power supply position deteriorated. This has caused a temporary dislocation in the last two months mostly in production in major industries consuming power of 1,000 KVA., or more. The period and the quantum of the reduction in power supply has been contained to the best extent possible. The power cut was partly relaxed with effect from the 7th June, 1987, as soon as there was some improvement in power availability.

Hon’ble Members are aware of the drive launched by Government to tackle the acute problem of drinking water last year due to drought . In the first quarter of the current year which has just ended, Government have released a sum of Rs.7.5 crores for Rural Water Supply in addition to the Central ceiling of Rs.2.45 crores was released to Municipalities in the drought affected districts.

Since the Twin Cities water supply position threatened to cause serious anxiety during the summer of l987, a series of measures were taken to mitigate the hardship by not only regulating drinking water supply but also by augmenting availability through sinking 6" bore-wells, additions to the fleet of mobile tankers for transportation of water to vulnerable and unserved areas, providing static tanks etc. Even movement of water through rail tankers was also resorted to.

In the intermediate phase with a view to augmenting the city’s water supply, by bringing 60 million gallons of additional water to the city, Phase-III of the Manjira Water Supply Scheme has been sanctioned. In response to the comprehensive water supply and drainage scheme sent to the Government of India for World Bank assistance costing about Rs.250 crores, a World Bank team recently visited the State and had discussions. We are hopeful of early sanction of assistance.

In this context, I wish to draw the attention of the Hon’ble Members to the report and discussions on the long term solution to the drinking water problem of Hyderabad city. We wish to take an early decision on the most appropriate source of long-term supply of water to Hyderabad city after taking the views of the Hon’ble Members also into consideration.

It is essential to find permanent drinking waster sources to all villages in the State. Government are committed to providing a drinking water source to all problem villages by 1988-89. To achieve this, a provision of Rs.30 crores has been made representing a step-up of more than 75% from Rs.17 crores in 1986-87. It is proposed to provide drinking water sources to 3,880 villages this year.


Hon’ble Members are aware that the revised outlay of the Annual Plan 1986-87 was Rs.1,328 crores compared to the original budgeted outlay of Rs.1,210 crores. I had proposed in the Vote-on-Account Budget an outlay of Rs. 1,539.96 crores for the Annual Plan 1987-88. This is being marginally enhanced to R.s.1,540.28 crores. The sectoral outlays remain the same. I have made marginal adjustments in the outlay of certain Centrally Sponsored Schemes and made fresh provision for one and that mainly accounts for the deviations from the Annual Plan I had submitted during the Vote-on-Account. As I had mentioned in my earlier speech, during the Vote-on-Account Budget presentation, the Annual Plan has brought about a significant reorientation in the sectoral priorities. We lay great emphasis on the fast development of the basic infrastructure for the rapid economic growth of the State. Irrigation and Power promote the State’s agricultural and industrial growth and therefore, the highest priority has been given by a substantial step-up in their allocation. In keeping with this Government’s firm resolve to accelerate the pace of economic advancement and the welfare of the poor, deprived, and weaker sections of the Society, particularly the members of the Scheduled Tribes, the Scheduled Castes and Backward Classes, we have provided equal priority to Social Welfare Sector. Irrigation has been provided an outlay of Rs.512.50 crores and Power an outlay of Rs.265.35 crores. The outlay for Social Welfare ie., the Scheduled Castes, the Scheduled Tribes and Backward Classes, has been substantially increased to Rs.128.65 crores. A brief on the Plan, and programmes included therein, has been furnished separately to the Hon’ble Members in the Volume "Survey of Economic Trends and State Plan". I shall therefore, briefly dwell on the more important sectors.


With a view to providing integrated services to the members of Co-operatives at their door-steps in rural areas at one contact point, the A.P. Co-operative Societies Act, 1964, was amended to reorganize the existing co-operative credit structure. Under the revised scheme, the primary agricultural credit societies at primary level will provide not only short-term and medium term loans, but also long-term credit and marketing services. The reorganization of Short-term and Long-term Co-operative Credit Institutions has been completed. To eliminate bogus membership in co-operative societies, for the first time, photo identity cards were given to all members of co-operative societies. This will eventually facilitate elimination of non-bonafide members from co-operatives.

I am glad that the recent elections to primary agricultural co-operative societies have, by and large, gone off peacefully in the State. The co-operative elections are a reaffirmation of our faith in democratic processes, and establishment of institutions which are genuinely owned, controlled and maintained by the people and for the people.

The mounting incidence of overdues in agricultural credit co-operatives in Andhra Pradesh on account of repeated natural calamities is affecting fresh flow of credit for agricultural production and also the eligibility of co-operative credit institutions for providing credit for various economic amelioration programmes. In order to mitigate the hardship of the members of Agricultural Credit Co-operatives, Government sanctioned interest rebate for repayment on or before the due date of current co-operative loans by subsidizing interest to an extent of 5.5%, and a waiver of interest and penal interest on arrears of Co-operative loans in full, provided the principal overdue as on 30th June, 1986 is repaid in full on or before 30th June 1987.

As I mentioned in my speech, when presenting the Vote-on-Account Budget, various measures will be taken to reduce the historically inherited acute inequalities and exploitation afflicting rural areas. These include review during 1987-88, of the rates and implementation mechanisms of minimum wages for agricultural labourers , whose living conditions are poor and deplorable, in order to secure minimum living family wages for all agricultural labor families; ;protection and security to tenants; and vigorous implementation of ceilings on agricultural lands. These measures will form part of our march towards the transformation of traditional archaic and inequitous structures of land ownership and social relation so as to unleash the productive forces in the rural and enable the rural working men and women to become the main productive force in the village and in agriculture.

As part of our unrelenting and strong efforts towards eliminating the inequalities in the production and income distribution systems, prevailing also in the rural non-agricultural sectors, the scheme of comprehensive development of thousands of marine fishermen families will be pursued vigorously along with similar comprehensive and integrated development assistance for groups of traditional small herders and sheep breeders.


In recognition of the importance of assured irrigation as the key to the alround development of the State in general, and the backward and drought prone areas in particular, a massive step-up has been proposed in the outlay for major irrigation projects. A new thrust is being imparted and the project construction rapidly accelerated by removing resource constraints for identified major projects. With this pointed emphasis, benefits are planned to flow from several major projects like Telugu Ganga , Srisailam Left Bank Canal, Jurala and Tungabhadra Project High Level Canal Stage-II years ahead, to fulfill the aspirations of the people. An event of great significance to the people of Rayalaseema this year would be the drawing of Krishna waters from Srisailam to stabilize the K.C.Canal ayacut. This is dream come true for the people if Rayalaseema. With the completion of work on the Mittakandala deep cut and dropping of Krishna waters into Nippulavagu an extent of about 2.20 lakh acres under K.C.Canal ayacut would be stabilized promising the farmers assured yields.

The provisions for major and medium irrigation projects has been steeply increased from Rs.282.94 crores in 1986-87 to Rs.478.50 crores during 1987-88, a step-up of nearly 70 % to create immediately a potential of 39,7353 hectares. Rs.22.55 crores has been provided for minor irrigation including the provisions for Andhra Pradesh State Irrigation Development Corporation and Ground Water Department. Besides a sum of Rs.5 crores has been provided for Drainage and Flood Control Schemes and Rs.6 crores for Command Area Development. The total provision for this sector is Rs.512.50 crores.

The substantial step-up for the Telugu- Ganga Srisailam Left Bank Canal, Tungabhadra Project High Level Canal Stage-II and Jurala is indication of the Government’s deep concern for provision of irrigation facilities to drought prone tracts and drinking waster to fluoride affected villages. This will speed up their implementation. The provision for Yeluru Reservoir Project has been increased so as to release water to Vizag Steel Plant by June,1988. High priority is being attached to the completion of Singur Project with a view to augmenting the supply of drinking water to the Twin Cities besides stabilizing the irrigation facilities downstream. Partial storage to an extent of 1.8 TMC has already been achieved by this Project and this is proposed to be increased to 3 TMC by November,1987.

Government are committed to provide a permanent solution to the tailend problems in Nagarjunsagar Project. With this objective in view, a massive programme of supplementation schemes both by lift and gravity has been launched in the Nagarjunsagar Project Area. The provision made for this project would support the early completion of these schemes and provide durable relief to over one lakh acres in the tailend reaches. The unprecedented floods in Godavari in August, 1986, had caused extensive damages to the flood banks and the irrigation and drainage systems. Despite such crippling damages, the system has been restored in a record time so as to release adequate flows for the second crop in the entire Godavari delta. The reconstruction of the damaged portion of Dowlaiswaram arm of the anicut has already been completed and the phased replacement of all the four arms of the 130 years old anicut as a downstream protection work for the barrage is in progress. The provision for Sir Arthur Cotton Barrage Project is accordingly enhanced manifold over the provision in 1986-87. Government have also decided to replace the 100 year old Sunkesula anicut at the head of the K.C.Canal by construction of a new barrage and provision has been made for this purpose beginning with the current year.

The World Bank assistance of 271 million U.S. Dollars for Sriramsagar Project and Srisailam Right Branch Canal Project is expected to flow from the current year after completion of various formalities. Assistance from the European Economic Community, of nearly Rs.30 crores, is being availed of for the implementation of minor irrigation schemes in drought prone and tribal areas. Netherland’s assistance has been sought for in order to expedite some of the ongoing medium irrigation projects. An agreement was entered into with the World Bank on the 12 May, 1987, for a total loan assistance of Rs.68 crores for implementation of National Water Management Programme in selected blocks of Nagarjunsagar, Rajolibanda Diversion Scheme, Mylavaram, Nizamsagar and K.C.Canal.

As I mentioned in my Vote-on-Account budget speech, this year will mark the beginning of our drive for the exploitation of all usable groundwater resources in a few years. The stimulus given to Irrigation will help to reduce unemployment and under employment in the rural areas and benefit both small and marginal farmers working in their fields with their family labour and wage-employed agricultural labourers.

It is with a view to ensuring that Andhra Pradesh continues to enjoy the reputation of being a power surplus State conducive to the growth of modern industry that very high priority has been accorded to power sector. The outlay on power sector is proposed to be stepped up to Rs.265.35 crores from Rs.180.25 crores in 1986-87, constituting a nearly 50% increase to ensure stable and balanced development of power in the State.

Power cut had to be introduced for the industrial units during the current year due to the unprecedented drought of the last three years and the non-availability of power from the National Thermal Power Corporation’s generating units at Ramagundam at a critical juncture. Soon, the cut was reduced when the power availability improved to some extent.

The Plan outlay of the Electricity Board for the current year is Rs.250 crores as against Rs.170 crores last year. The installed capacity of 3,366 MW, at the end of 1985-86 increased to 3,595 MW, by the end of March, 1987. The energy generation similarly increased from 11,139 million units to 12,658 million units indicating growth of 13.6%. The work on stage-II of Vijayawada Thermal Power Station is progressing and this is being reviewed at regular intervals. Project reports of Muddanur Thermal Power Station for two units of 210 MW, in Cuddapah district and Stage-III of Vijayawada Thermal Power Station for one Unit of 500 MW., have been furnished to Government of India for their approval. A total of 24,690 villages and hamlets have so far been electrified representing electrification of 90% of the total villages in the State. 94,808 pump-sets have been energized last year, 1,777 Scheduled Caste localities in villages were electrified. 7,593 agricultural pump-sets belonging to Scheduled Castes were energized. The number of villages of Scheduled Tribes electrified was 742. The Electricity Board is presently supplying electricity for drinking water schemes and for street lighting in the minor panchayats free of cost. Small Scale Industries were exempted from service line charges.

In the year 1987-88 two units of 9 MW each would be commissioned at Pochampad. It is proposed to electrify 815 villages and 90,000 to 1,00,000 pump-sets. The Special Component Plan for Scheduled Castes in this sector is being allocated Rs.10 crores in the current year which would be utilized for electrifying 1,550 Scheduled Caste localities in rural areas, energising of 5,000 pump-sets, and releasing supply to 150 Industrial services and 9,850 other services. The Tribal Sub-plan provision in this sector is Rs.7 crores intended to electrify 700 villages and release 2,500 services to members of the Scheduled Tribes.

Non-conventional energy resources are also being developed in the State. Installation of family size bio-gas plants and community bio-gas plants would be continues under the National Project for Bio-gas Development. Similarly, the National Programme for Improved Chulhas would also be continued. Wind energy and solar energy programmes are also proposed to be undertaken. A sum of Rs.55 lakhs has been provided in the State Plan. Central assistance would be availed of to implement these programmes.


Industrialization is a major instrument for the development of the State, for providing employment, for improving the living standards of the people and for building up and expanding modern structures in the economy. To accelerate the pace of industrialization, the outlay on industries and commerce during the year: 1987-88, has been increased to Rs.56.19 crores. Of this, Rs.30.30 crores is proposed for medium and large scale industries and Rs.21.28 crores for village and small industries. Allocation for village and small scale industries has been increased. The outlays for the Special Component Plan for the Scheduled Castes and Tribal Sub-Plan in this sector have been given a boost. A comprehensive incentive scheme for the Scheduled Caste entrepreneurs has been evolved. It is also proposed to establish an Entrepreneurial Development Institute in the State. Our State possesses good factor endowments for development of modern industry. Fiscal incentives and infrastructure support, especially, of power, water and land, are being rationalized and improved to impart greater dynamism to industrial investment. A Committee has been set up to make recommendations on the implementation of gas based industries and Petro-chemical Project in Visakhapatnam, Krishna and Godavari areas. The Committee on infrastructure appointed by the State Development Board has submitted a perspective plan for development of industrial infrastructure in the State. This is under examination of Government.

The plastic industry is a new functional area catching up in Andhra Pradesh. The Central Government has cleared the proposal for setting up an Extension Centre of the Central Institute of Plastic Engineering and Tools at Hyderabad. This is being funded both by the State and Central Governments at a cost of about Rs.3 crores, to help develop plastic industry with particular reference to engineering plastics. I am also happy to inform that Central Government have decided to establish an Export Processing Zone at Visakhapatnam as requested by the State Government and have selected a site for the purpose. Early establishment of this Export Processing Zone would give a boost to export-oriented industries in the State.

In this sector, a large neglected category is that of traditional artisans. They largely belong to the Backward Classes. For the first time, the Government have taken up, as a major and specific objective, their development to enable them to become economically free and self-reliant. A substantial increase in the provision for them has been made.

Realizing the socio-economic importance of the Handloom Industry in the village economy and the large employment potential, a sum of Rs.12.20 crores has been allocated to the sector in 1987-88. 3,718 weaver members have already been assisted under work-shed-cum-housing scheme and it is proposed to assist 2,500 members during 1987-88. It is proposed to continue the scheme of supply of one janatha saree and a pair of janata dhoties to green card holders. It is expected that about 60 lakh card holders against 40 lakhs in the previous year, would avail themselves of this facility during this year.

Andhra Pradesh occupies the second position in the development of sericulture in the country. Sericulture has generated employment directly and indirectly to about 5 lakh persons in rural areas of the State. It is proposed to generate additional employment to about 1.25 lakh persons by the end of VII plan period. Special schemes for the benefit of the Scheduled Castes and the Scheduled Tribes to bring them above poverty line have been taken up in the sericulture programmes. So far, an extent of 8,250 acres was brought under mulberry by S.C.beneficiaries and 1.054 acres by the S.T. beneficiaries.

Under special employment schemes, an amount of Rs.3.95 crores has been proposed for 1987-88, with a physical target of 8,000 beneficiaries. In pursuance of the State Government’s commitment to improve the economic conditions of minorities, the allocation for the Andhra Pradesh State Minorities Finance Corporation Ltd., which provides financial help to minorities in the field of trade, agriculture and small scale and cottage industries, has been stepped up from Rs.80 lakhs to Rs.100 lakhs in 1987-88. The Corporation will multiply this amount through institutional finance. The studies on the socio-economic conditions and developmental programmes for the minorities for which provision has been made are expected to be undertaken this year, to help give a sounder basis for the future efforts for the economic advancement of the weaker sections among the minorities.


It is now well recognized that public sector enterprises perform a crucial role in the development process of the State. I am glad to draw the attention of the Hon’ble Members to the remarkable improvement in the performance and profitability of the State level public enterprises as a whole in Andhra Pradesh. During the year: 1984-85, all of them put together incurred a loss of Rs.47 crores. But during the year 1985-86, they made altogether a profit of Rs.74.44 crores. This was after setting off the losses made by the loss making Corporations from the profit made by the other Corporations. For the year as a whole, they had an impressive turnover of Rs.2,675 crores. The above profit of Rs.74.44 crores was made after paying interest to the tune of Rs.171.32 crores on term-loans and working capital and after providing for depreciation. If depreciation is also added back, they made a cash profit of Rs.200 crores. The number of loss making enterprises came down from 24 to 17.

The improvement in the performance recorded during 1985-86 also continued in 1986-87. When the accounts are finalized, it is hoped that for the year 1986-87 also the Corporations put together would have earned a profit comparable to that of 1985-86

The Government are taking a number of steps to further improve the performance of public enterprises. The Public Enterprises Management Board (PEMB) under the Chairmanship of the Chief Secretary, with expert and official members, reviews their performance at a regular intervals and also takes the intensive study of the loss making companies for appropriate rehabilitation and reconstruction. Internal auditing and computerization are being undertaken in selected enterprises to ensure monitoring and control.

In order to have appropriate man power planning and selection of competent professionals, Government have taken a decision to constitute a Public Enterprises Personnel Board (PEPB). It will assist the Public Enterprises in their man power planning and estimation and ensure necessary staff strength, in the various public enterprises with categories of skills commensurate with the requirements and level of activity. It will also avoid surplus man-power and will try to redeploy wherever it is present. Along with this, suitable schemes for personnel management, including recruitment policy, job rotation, promotion policy, training, career advancement, productivity based schemes etc., will be evolved. The Personnel Board will be a central nodal agency for personnel development in public enterprises and also for advertising the departments of State Government and others in man power planning in the Public Enterprises.


In my Vote-on-Account Speech I had dealt with the Social Welfare programmes for the

Scheduled Tribes, the Scheduled Castes, Backward Classes and Women and Children. Social Welfare is among the three top priority sectors ranking with Irrigation and Power. The outlay for the Scheduled Castes, the Scheduled Tribes and Backward Classes welfare, as I had mentioned earlier, has been increased from Rs.76.77 crores to Rs.128.65 crores. This sectoral outlay, together with the outlay earmarked by the various departments under the special component plan for the Scheduled Castes and the Tribal Sub-Plan, would provide a substantial fillip to the development of these weaker sections on all fronts.

In continuation of what I have elaborated in my last speech, I shall only briefly outline some of the major programmes under this sector. They are : a massive programme for construction of community irrigation wells, programme for rehabilitation of , pension to landless agricultural workers, maintenance of existing hostels and opening of new hostels, scholarships and stipends, supply of text-books, supply of dresses, residential schools, polytechnics and industrial training institutes, training programmes, construction of community halls, development of assigned surplus land, provision of margin money for economy support programmes., construction of hostel buildings for boys and girls, supply of college books etc.

The major programmes in the Scheduled Tribes sector include scholarships, maintenance of hostels and opening of new hostels, maintenance of residential schools and ashram schools, construction of buildings for schools and girls hostels, construction of industrial training institute buildings, economic development programmes, rehabilitation of members of Scheduled Tribes classified as primitive tribes and yanadis, financial assistance to Girijan Co-operative Corporation etc.

The Backward Classes sector also has received a substantial step up in the outlay from Rs.20.98 crores to Rs.34.25 crores. The programmes include, as in the case of the Scheduled Castes and the Scheduled Tribes, scholarships, stipends, maintenance of hostels, opening of new hostels, supply of text books, maintenance of residential schools, construction of residential school buildings, irrigation development , other economic development schemes, construction of hostel buildings etc.

The Weaker Section Housing Programme will continue to receive high priority.

Concerted efforts will be made in 1987-88 to speed up reservation for the Scheduled Castes, the Scheduled Tribes and Backward Classes and reduce the lag in their actual representation in the services with a view to eliminating the lag as early as possible.

There can be no doubt that what we are doing and proposing to do in this sector is a model for the country. But we are conscious that considering the backwardness and disabilities from which these sections suffer we have to do much more and shall continue our efforts with unremitting vigour until the socio-economic tasks in respect of the Scheduled Castes, the Scheduled Tribes and Backward Classes, are completed.


In order to give a fillip to the women and child welfare programmes , a new department of Women’s’ Development and Child Welfare has been created in the Secretariat and assigned the task of formulation of policies and effective monitoring, review and evaluation of programmes for their welfare, advancement and empowerment.

The Telugu Bala Mahila Pragathi Pranganam is intended to provide integrated service for development of women and children under one roof. This is an innovative concept of providing training-cum-employment-cum-production facilities for women. Eight n are under construction in the districts of Vizianagaram, West Godavari, Guntur, Anantapur, Nizamabad, Ranga Reddy, Adilabad and Chittoor and will be completed this year. Work on six Pranganams will commence in the current year in Karimnagar, Cuddapah, East Godavari , Nalgonda, Krishna and Visakhapatnam districts. An exclusive women’s court has been sanctioned in the city to try offences against women. I am happy to say that it is the First Women’s Court in the Country.


A special crash programme was launched during last year for completion of assignment of Government vacant lands both for agriculture and house-sites . As a result of the programme, an extent of Acs.1,95,233 of land was assigned to landless poor till 28th February, 1987. Similarly, an extent of Acs. 5,121 was assigned as house-sites to 97,107 applicants. Occupation in an extent of Acs. 2,509 covered by unobjectionable encroachments as house-sites was regularised. An extent of Acs.5,967 encroached tank-bed lands was granted on eksala lease.

An extent of Acs. 24,886 was assigned in agency areas up to the end of 31st March, 1987 out of an extent of Acs.45,744 surveyed land under the Telugu Girijana Magana Samaradhana.

This year also the crash programme is being continued and instructions have been issued to complete the work by 15th August, 1987. For the year 1987-88 Government have also fixed a target of assigning of 10,000 Acs. Of land declared surplus under the Land Ceiling Act.


The State average consumer price index for industrial workers recorded an increase of 7.9% between March, 1986 and March, 1987. However, the unique public distribution system which supplies rice at Rs.2 a K.G. to the poor in the rural and urban areas of the State was able to substantially mitigate the adverse effects of price rise among the poor. There was a record level distribution of 21.90 lakh tonnes of rice through the fair price shops during the year ending March, 1987. A sum of Rs.180.40 crores has been provided for this scheme for the current year.


Education receives in this Plan a sum of Rs.84.48 crores representing 26% increase in the outlay of last year. The major thrust areas are universalisation of primary education, strengthening science education at the secondary level, physical education, vocationalisation, technical training and audio visual education. A unique programme of audio visual education the primary classes has been launched and it s proposed to progressively cover all primary schools in the State. In the current year, Video cassette lessons will be supplied to 600 primary schools in the State. Rs.8 crores have been earmarked for the supply of school uniforms and text-books to primary school children. Last year this was done for children of classes I and II. This will be extended to class III this year. 24,00,000 children will be covered under this programme. A pilot project is being undertaken for securing cent per cent literacy in a few selected model mandals in the State. Four Navodaya Vidyalayas are being opened in eight more districts. It is hoped that the newly established Commissionerate of Higher Education will give the anticipated thrust to higher education in the State.


Technical education receives a plan allocation of Rs.5.16 crores in the current year. Strengthening the process of technical education is essential for modern industry. This year, it is proposed to open four polytechnics for women in Prakasam, Srikakulam, Karimnagar, Nalgonda districts and two residential polytechnics exclusively for the Scheduled Caste pupils at Madanapalle and Rajahmundry. One Polytechnic in West Godavari District will also start functioning. Computer Course is being introduced in the current year in the Government polytechnics at Karimnagar, Tirupathi, Ananthapur, Nizamabad and Visakhapatnam and Communication Engineering Course at Nellore, Visakhapatnam, Srikakulam and Guntur.

The Department of Employment and Training started seven Rural Industrial Training Institutes in the year 1986-87, with a view to improving availability of technically qualified Scheduled Castes, Scheduled Tribes and Backward Classes, bringing the total number of such Industrial Training Institutes to nine.


Medical and Health Services has been allocated a sum of Rs.33.45 crores in the Plan. In the last speech, I had indicated the organisational restructuring undertaken in respect of medical and health services in the State and outlined the objectives behind them and the goals we have set for them. In order to co-ordinate and direct the work of various Yoga and Naturopathy Institutions in the State and to integrate expansion of education in Yoga and Naturopathy, the Andhra Pradesh Yogadhyayana Parishad has been established with effect from 1st May, 1987. State Government hopes that this unique institution would provide a real boost to the country’s heritage in this field. One more organisational innovation which has been undertaken relates to the establishment of the A.P.Medical and Health, Housing and Infrastructure Development Corporation. This Organisation is intended to undertake construction of Primary Health Centre and Sub-Centre buildings and residential quarters for medical and para-medical personnel in rural areas. Institutional finance would be availed of by this Corporation for this purpose. Negotiations are being held with HUDCO.

The measures for the time-bound eradication of certain area-specific diseases and for the study, control, prevention and cure of occupation-specific diseases of certain weaker sections like agricultural labourers, rickshaw pullers and stone-cutters will make a dent in reaching health and medical facilities to neglected sections of the population.


Our Government are committed to democratisation and decentralisation of administration. We wish to bring administration closer to the people and to leave power in the hands of the people. Bringing into being the Zilla Parishads and Mandala Praja Parishads is conclusive proof of this conviction of ours. We shall make them the real vehicles of rural transformation by enabling them to have adequate power and enough resources. As a first step in the direction of providing financial resources to these organisations, a statutory per capita grant of Rs.5/- per head and Rs.2/- per head is being given to Mandala Praja Parishads and Zilla Praja Parishads respectively.

Government have decided that integration of developmental and regulatory functions at the village level may be tried out in a model mandal in each district by pooling the village assistants, village development officers and executive officers of Gram Panchayats and putting one functionary in-charge of both developmental and regulatory functions after giving necessary training to each category in the new functions proposed to be entrusted to them. A pilot scheme is under implementation in the model Mandals. After studying the experience of the pilot scheme for six months, the matter will be reviewed and a decision taken where or not to extend the scheme to other Mandals.

In the sector of rural development the progrmmes undertaken by the Government with assistance from the Central Government cover the well known programmes of Integrated Rural Development Programme, Drought Prone Area Programme, Rural Landless Employment Guarantee Programme and Programme of Assistance to Small and Marginal Farmers for increasing agricultural production (PASMA). In order to provide office accommodation to the Mandal Revenue Offices and Mandala Praja Parishad Offices, a provision of Rs.10 crores has been made.

The process of restructuring the democratically elected Local Bodies would be complete with the conduct of elections to the Gram Panchayats. Government are examining the question of viable size of the base unit of the administrative structure at the village level. This important issue has been thrown open for electing public opinion.


Urban development is provided an outlay of Rs.30.45 crores. State Government intend to seek World Bank assistance for a number of Urban Development Projects. A Rs.50 cores project for improving the sewerage system in the Twin Cities has been proposed to the World Bank as part of the integrated project for drinking water and sanitation about which a reference has been made by me while dealing with drinking water. The Socio-ethically important Scheme Vimukthi, for the liberation of scavengers by the end of VIII Plan is in vigorous progress. In order to speed it up, a scheme has been furnished to the Government of India for World Bank assistance. The outlay of the scheme furnished to Government of India is Rs.200 crores. Yet another scheme prepared for being posed for World Bank assistance is the Integrated Urban Development Project costing about Rs.350 crores with a water supply component of Rs.200 crores and transportation and solid waste management etc., component for Rs.150 crores covering 19 towns including Hyderabad City.


Government accepted the Report of the Pay Revision Commission, 1986 and implemented the revised pay scales for the State Government employees with effect from 1st July, 1986. Orders in respect of most of the recommendations of the Pay Revision Commission have been issued. All these are expected to cost in one full year about Rs.155 crores. Provision has been made for this.

The Pay Revision Commissioner has recommended that the policy adopted by the Government of India regarding payment of Dearness Allowance may continue to be applied to State Government employees as well. Installments of dearness allowance have been sanctioned on the old pattern which fell due on 1st April, 1986 and 1st June, 1986. On the lines of the new pattern of dearness allowance approved by the Central Government, orders have been issued sanctioning dearness allowance installments to State employees in the new pay scales from 1st July, 1986 and 1st January, 1987. Pensioners have also been given relief and three installments have been released.


It may be recalled that the Vote-on-Account Budget which I presented last reflected the modifications effected by the Central Government in the budgetary and accounting classifications.

This has brought closer linkage between accounting and plan classifications. This time also I have effected some changes in the Budget format. The Demands, both Plan and Non-Plan coming under each department of Secretariat are put together and presented in separate volumes, instead of in two large volumes for Non-plan and Plan in respect of all Departments together. This has been done with the approval of the Estimates Committee. It may also be noticed that there is a separate demand for Tribal Sub-plan in this Budget. I earnestly hope that these changes would make the Budget uploads more meaningful.

ACCOUNTS 1985-86

The transactions under Revenue Account in 1985-86 revealed a deficit of Rs.7.31 crores, against the estimated deficit of Rs.79.26 crores. The year closed with the plus balance of Rs.104.41 crores mainly on account of medium term loan assistance granted by the Government of India to clear the overdraft as on 28th January, 1985.


The Revised Estimates 1986-87 indicate a revenue deficit of Rs.181.05 crores against the original estimated deficit of Rs.15.74 crores. This is primarily due to increase in Plan expenditure and unanticipated expenditure on flood relief and drought relief schemes.


Against the revenue surplus of Rs.187.02 crores estimated in the Vote-on-Account Budget, now there is a revenue deficit of Rs.12.81 crores. This is mainly due to providing for dearness allowance sanctioned to the employees, shortfall in the anticipated receipts from the Government of India for the year 1987-88 for meeting expenditure on spill-over flood relief and drought relief schemes these amounts were already released in advance during the year 1986-87 itself, and due to provision of funds for expenditure on ensuing Gram Panchayat elections. Out of the total provision for expenditure on dearness allowance to the employees, a credit of Rs.56 crores has been taken under Public Account as the arrears were ordered to be credited to a separate account in the Public Account. The net effect of all these transactions of the year 1987-88 results in overall deficit of Rs.262.76 crores. Taking into account the opening plus balance of Rs.25 crores, the year 1987-88 is estimated to close with a minus balance of Rs.237.76 crores.

Development is a function of the resources available. Resources mobilization is, therefore, a must for fulfilling the growth aspirations of the people and the requirements of a substantially higher plan outlay to meet these aspirations. Hon’ble Members are aware of measures taken by the Government to mobilise resources. Even after these measures, there is still a gap for fulfilling the budgeted outlay. It is proposed to cover this gap by observing further economy in non-plan expenditure, by maximising collections, by improving efficiency and through continued application of "Punararambha Vitha Vidhanam". We expect the Government of India to take early decision to levy Consignment Tax, inaccordance with the unanimous decision of the Chief Ministers, which would result in improvement in the resources of our State also.

It is my privilege to present this Budget which seeks to intermesh and integrate the mutually supportive objectives of economic growth and social equity to constitute a frame-work of healthy democratic, socialist advancement. It will go a considerable way in furthering the interests of the cultivating masses in our rural areas, agricultural labourers, artisans, fisherpeople, the Scheduled Castes, the Scheduled Tribes, Backward Classes, Minorities, Women and all other poor, deprived and weaker sections of our society, to whom this Government is dedicated. I am happy to commend this Budget for the approval of the House.