Previous Budget Speeches






Speech of Sri M Rajaiah,
Minister for Finance presenting the Budget for
1989-90 to the Andhra Pradesh Legislative Assembly
24th February, 1989.




I rise to present the Budget for the year 1989-90.

I am sure that the Hon'ble Members will be happy to note that we are presenting the full year's Budget for the financial year 1989-90. This is in keeping with the wishes of the Hon'ble Members of this house.

As the Hon,ble Members are aware the Budget that is being presented to-day relates to the last year of the Seventh Five Year Plan. The primary aim of this Budget is to consolidate the development already achieved in various sectors and lay a strong and solid foundation for the Eighth Five Year Plan. With the proposed State Plan Outlay of Rs. 1,400 crores for the year 1989-90, the total Seventh Plan Outlay of our State is likely to be over Rs. 6,000 crores as against the outlay of Rs. 5,200 crores approved by the Planning Commission. It is a matter of pride that our State will be able exceed the outlay indicated by the Planning Commission for the Seventh Five Year Plan.

Sir, this august House will recall that our Government have always concerned itself with improvement in the quality of life of the poorer sections. We have always been anxious that the investments should be channelised in such a way that the poorest of the poor are able to share the fruits of development. We have always looked upon welfare programmes as an integral part of the developmental programmes. It is obvious that the poor people who are suffering for want of food, clothing and shelter cannot be asked to wait indefinitely. The Government propose to invest Rs. 433.00 crores in the year 1989-90 on various subsidies to the poorer sections under various categories like subsidized rise supply, rural housing, Janatha Sarees and Dhothies, sugarcane subsidy to farmers, subsidy to State Irrigation Development Corporation towards water charges, interest subsidy etc. This is indicative of our deep concern for the welfare of the poor.

As this august House is aware a number of structural changes have already been brought about to improve the implementation of various developmental schemes. The Single Window concept, establishment of Karshak Parishads, establishment of Department of Public Enterprises, establishment of Commissionerate of Tenders, merger of some Directorates with the Secretariat Departments concerned, establishment of new state level institutions like Andhra Pradesh Vaidya Vidhana Parishad, Andhra Pradesh Shore Area Development Authority, the Andhra Pradesh Technology Services Limited and the Andhra Pradesh Integrated Forest Development Authority are but a few examples.

Review of Economic Trends

The State received good and well distributed rainfall during the current year after experiencing drought conditions successively for the last four years. In view of the good monsoon the total foodgrains production in the Khariff season of the current year is estimated to reach a record level of 84.21 lakh tonnes as compared to the previous best performance of 81.36 lakh tonnes in 1983-84. Though the Rabi prospects in the current year are not so encouraging the total food-grains production in 1988-89 is expected to be around 120.00 lakh tonnes surpassing the record level of 118.82 lakh tonnes reached in 1983-84. Thus the State's economy is showing the signs of revival after four years of continuous drought.

The Net State Domestic Product registered an increase during 1987-88 both at current and constant ( 1980-81) prices over 1986-87. While it recorded an increase of 4.9 per cent from Rs. 8,635 crores to Rs. 9,054 crores at constant prices, it increased by 13.8 percent from Rs.14,110 crores to Rs.16,063 crores at current prices. The industrial production increased by 7.6 per cent during the first eight months of the current year over the corresponding period of the previous year.

During 1988-89, the Consumer Price Index for industrial workers in Andhra Pradesh rose from 749 in March, 1988 to 808 in September, 1988. Broadly, a similar trend was also observed in the case of All India Consumer Price Index which rose from 753 in March, 1988 to 806 in September, 1988. The other indices for the other categories like agricultural labour and the urban-non-manual employees indicated a similar upward trend. The State and the All India wholesale price indices for agricultural commodities also by and large, reflected a similar trend.

Seasonal Conditions
As I mentioned a little while ago, the current year 1988-89 has been comparatively a good year. What is, however, causing concern is the inadequate rainfall, during the North East Monsoon period which has an adverse effect on the agricultural operations in the districts of Chittoor, Cuddapah, Nellore and Prakasam. The districts of Adilabad, Medak and Ranga Reddy had also experienced continuous dry spell since September. The situation is closely under watch and suitable steps will be taken if relief measures are warranted.

Hon'ble Members are aware that against the Plan Outlay of Rs.1,250 crores approved by the Planning Commission for 1988-89 the State Govermnent have provided Rs. 1,252.72 crores in the Budget. The anticipated expenditure is estimated at Rs.1,338.78 crores and this is reflected in the Revised Estimates for 1988-89.

Government of India have sanctioned during the current year an Advance Plan Assistance of Rs. 10.67 crores for certain irrigation schemes under Special Food Production Programme and this amount is additionally included.

During the discussions held between our Chief Minister and the Deputy Chairman, Planning Commission at New Delhi in January, 1989 a Plan of Rs.1,300 crores was finalised for 1989-90. This Plan, however, is inadequate having regard to the anticipated expenditure of over Rs. 1,300 crores in the current year and our inevitable commitments under Irrigation,Power,Rural Development and Social Services sectors. A Plan of Rs. 1,400 crores has therefore been prepared and included in the Budget for 1989-90.


Irrigation continuous to play a key role in the economic development of the State, especially in the backward and drought probe areas. A provision of Rs.350 crores has been made for 1989-90 of which Rs. 293.25 crores is exclusively earmarked for Major and Medium Irrigation Schemes. A provision of Rs. 41.25 crores is made for Minor Irrigation works and provisions for Drainage, Flood Control, etc., have been enhanced.

Strategy of laying special emphasis on timely completion of selected projects at a time, has started yielding the desired results. It is owing to this strategy that Somasila, Vengalarayasagar and Sathnala Projects could be dedicated to the people of the State recently. By June this year, both Singur and Yeleru Reservoir Projects would be completed, substantially augmenting the water supplies to the twin cities and the Visakhapatnam Steel Plant, besides providing the much needed stabilisation of irrigation facilities to thousands of acres.

The massive protection works already take in up in all the four arms downstream of Sir Arthur Cotton Barrage at an overall cost of Rs. 43.43 crores, would also be completed by June, this year. Telugu Ganga Project, which symbolises the firm resolve of this Government to provide durable relief to the drought prone areas in Rayalaseema, would very soon be a reality. The project implementation has been geared up to release benefits in 1990.

The implementation of Jurala Project, which benefits immensely the hard core drought areas of Mahabubnagar District is being accelerated so as to release water to some of the parched fields by 1990. The Government are equally committed to the timely completion of Srisailam Left Bank Canal, in which Akkampally Balancing Reservoir and other important works are being given the highest priority.

Srisailam Right Branch Canal and Sriramsagar Project, which are covered by World Bank Aid, would now surge ahead with new speed, as the procedural formalities for tapping World Bank assistance have all been fulfilled and a large number of works stand grounded. Tungabadra High Level Canal Project Stage-II, of which Dharmavaram and Yadaki Canals are integral components, is being implemented speedily to provide assured irrigation to an additional one lakh acres in Ananthapur District.

As part of the strategy for swift completion of project head works, which are known to drag year after year, leading to wasteful practices, Government are considering entrusting some of these works to reputed Engineering Firms of proven competence so as to complete them in one or two seasons. As the Hon'ble Members are aware, this procedure has already been tried with great success in respect of protection works of Sir Arthur cotton Barrage. It is the intention of this Government to adopt the same strategy for completion of the Sunkesula Barrage within the minimum possible time.

This Government approach irrigation planning, no with any rigidity or regional bias, but always viewing it in its true perspective as a potent instrument for rural development, which can give a new future and a new life to the rural masses. The Galeru Nagari Sujala Sravanthi Project has been conceived by this Government in this spirit, to extend by gravity flow, the benefits of irrigation and drinking water to such drought prone areas, which never even figured in any previous project profiles. Similarly, considering the crucial importance of the reservoirs at Alaganur and Pulichintala in improving the success rate of irrigation, Government have decided to give high priority to their construction. Similarly, extention of Saraswathi Canal in Adilabad District, which is a part of Sriramsagar Project Stage-II, is also being taken up for implementation ahead of schedule. I would like to reiterate the Government's firm resolve to take up Vamsadhara Project Stage-II, the clearance of which is unfortunately long delayed despite our unconditional acceptance of the Inter-State agreement conditions.

There has been a qualitative and quantitative upswing in the execution of the Minor Irrigation Schemes for which the European Economic Community assistance has made a positive contribution. For the first time in the history of the State, 1,000 schemes would be completed in one year and thanks to the good monsoon, the benefits under many of the schemes have already been realised in full in the very first year of their creation. Andhra Pradesh State Irrigation Development Corporation, which is playing a crucial role in harnessing ground water and organising Lift Irrigation Schemes, has been proffered had an increased budgetary support of Rs. 10 crores. Command Area Development Programme has been provided Rs. 8 crores, keeping in view etc important role to reduce the gap between the irrigation potential created and utilised and in providing infrastructure through ayacut roads.

As a result of the execution of the various Major and Medium Irrigation works, additional Irrigation potential of nearly 84,000 acres is expected to be created in 1989-90.

Under the Minor Irrigation, theadditional potential is expected to be 37,500 acres.




Power is a critical input both for agricultural and industrial development. The Hon'ble Members will notice that the power sector is being accorded a very high priority, as in the past.

As against an outlay of about Rs. 200 crores for the Andhra Pradesh State Electricity Board in the current year, an allocation of Rs. 220 crores has been made in 1989-90.

I am happy to mention that during the current year the Andhra Pradesh State Electricity Board has secured from the Power Finance Corporation a loan of Rs. 60 crores for Vijayawada Thermal Power Station Stage-II and another loan of Rs. 12.28 crores for transmission and for installation of capacitors. With these additionalities, the current year's plan expenditure of Andhra Pradesh State Electricity Board is likely to be about Rs. 272 crores a step-up of 36% over the original outlay.

Since our reservoirs received good inflows in July and August due to good monsoon, the power cut was lifted from 29th July, 1988 and full power requirements were met upto 27th November, 1988. However the effects of a good monsoon last for only a short period. The capacity of the reservoirs is limited and the Hydel Power power will not be sufficient to fully bridge the gap between the requirements of power and available thermal power during summer months. Moreover, during the current year the demand has gone up by 10.8% as compared to last year since the Andhra Pradesh State Electricity Board energised about 1.17 lakh pump sets besides releasing a substantial number of industrial and other services during last year. The available capacity, however increased from 3,914 MWs to 4,053 MWs only, representing an increase of 3.55%. Therefore, power cut became inevitable for better management of the available energy and was imposed with effect from 28th November, 1988.

The Hon'ble Ministers will be happy to know that Vijayawada Thermal Power Station got Meritorious Productivity Award from Government of India for the 6th year in succession. I am happy to report that Kothagudem Thermal Power Station also secured a Productivity Award.

During the first three quarters of the current year 54,003 pump-sets were energised by the Board and 3,349 pump-sets by Rural Electric Co-operatives. 690 villages have been electrified during the first three quarters.

During the first 9 months of the current year, under Special Component Plan for Scheduled Castes, 587 Harijana Wadas have been electrified and 4,710 agricultural services and 7,674 other services have been released. During the same period under Tribal Sun-plan 649 tribal villages were electrified and 1,377 agricultural services and 6,811 other services have been released.

In addition to the proposed plan outlay of Rs. 220 crores for the year 1989-90, the Andhra Pradesh State Electricity Board is planning to obtain loan assistance of Rs. 80.19 crores thus taking the programme of capital expenditure for 1989-90 to Rs. 300.19 crores. During 1989-90 it is expected that 516 MWs capacity will be added. The sources will be Vijayawada Thermal Power Station Stage-II ( 2 x 210 MWs) the first unit of which will be commissioned in September, 1989 and second by March 1990, Nagarjuna Sagar Right Canal ( 30 MWs) and Gas Based Thermal Power Station at Vijjeshwaram ( 66 MWs). It is expected that there will be some further relief with the commissioning of second 500 MWs Unit at Ramagundam under Central Sector by July, 1989. The total capacity would be 4,708 MWs including State share from central sector projects by the end of March, 1990.

Preliminary discussions had taken place with the officials of Asian Development Bank with regard to Muddanur Project. If the approval of the Asian Development Bank is secured by July, 1989, it will be possible to step-up works in Muddanur Thermal Power Station considerably during 1989-90 and the project can be completed in about four years time. I would also like to mention here that Project reports for Coast Based Thermal Power Station, near Visakhapatnam ( 2 x 500 MWs) and Gas Based Combined Cycle Thermal Power Station at Vijjeshwaram in West Godavari district ( 3 x 90 MWs) have been submitted to Government of India for approval.

During the year 1989-90 it is proposed to energise 75,000 pump sets. Under Special Component Plan for Scheduled Castes it is proposed to electrify 1,000 Harijanawadas and release 1,000 agricultural services and 7,500 other services. It is also proposed to electrify 1,200 weaker section colonies. Under Tribal Sub-plan, it is proposed to electrify 250 Tribal Villages by conversion to conventional method and release 2,000 agricultural services and 1,000 other services.


Social Welfare


Hon'ble Members will notice that the proposed Plan Outlay in 1989-90 for this sector is Rs. 88.47 crores. As compared to the Plan Outlay of Rs. 3 2. 84 crores for this sector in 1982-83, this represents an increase of 169.40%. Our Government will continue to accord a very high priority for welfare of the Scheduled Castes, Scheduled Tribes and Backward Classes as they have been doing in the past. During 1989-90, schemes such as pre matric, post-matric scholarships, stipends, supplying text books and dresses to pre-matric students, stipends to advocates, construction of dhobighats, rehabilitation of jogins, pensions to indigent widows and landless agricultural labourers and old age pensions and economic support schemes under Poverty Alleviation Programme will be continued as past experience has confirmed the utility of these schemes.

One of the significant steps taken during the current year relates to increase in the rates of mess allowances and cosmetic allowances given to the boarders of the Government Hostels and Post-matric Hostels belonging to the Weaker Sections. As the Hon,ble Members are aware Residential Schoools have contributed a great deal to the improvement in the quality of education imparted to the students belonging to the weaker sections. Several of these schools have been able to register 100% passes. With the starting of six Residential Schoools for backward classes in the State during the last two years, a significant step has been taken from providing quality education to the children belonging to the Backward Classes as is being done in the case of children belonging to Scheduled Castes and Scheduled Tribes.

The Government are aware that a substantial extent of the agricultural land held by weaker sections does not have irrigation facilities. Efforts are therefore being made with redoubled vigor to create irrigation potential for lands owned by the weaker sections under' Jeevandhara' Programme as well as other plan schemes. Jeevandhara Programme provides for construction of nearly 25,500 wells for Scheduled Castes and Scheduled Tribes beneficiaries with an outlay of Rs. 49.47 crores during the current year. Necessary provision has been made for this programme in the Budget for 1989-90.

It is a matter of great satisfaction that Weaker Sections Housing Programme is being implemented in our State on a massive scale. During the six year period 1983-84 to 1988-89, the expenditure by the State Govermnent on this Programme is about Rs. 260 crores by way of subsidy and about Rs. 90 crores by way of repayment of loans obtained by the Andhra Pradesh Housing Corporation from All India Institutions and Commercial Banks. In the Budget for 1989-90, a provision of Rs. 49.92 crores has been made towards subsidy element and another sum of Rs. 42.22 crores has been provided for repayment of principal and interest amounts to All India Financial Institutions and Commercial Banks.

During the current year about 6 lakh Scheduled Castes students are being covered by pre-matric scholarships, about 1.07 lakh students are being covered by post-matric scholarships, about 692 boys are being provided with research scholarships. Necessary provokes has been made in the Budget for 1989-90 for continuation of these schemes.

There are 2,210 Government Hostels exclusively maintained for 2,26,390 Scheduled Castes boys and girls. An amount of Rs. 57.73 crores is provided for their maintenance in the Budget for 1989-90.

There are 861 Government buildings for the Hostels and another 335 buildings are under construction.

The A.P. Scheduled Castes Co-operative Financial Corporation continues to play a pivotal role in the economic development of Scheduled Caste families below the poverty line. This Corporation covered more than 16 lakh families so far under various schemes and it proposes to cover 2,307 lakh scheduled caste families during 1989-90.

Doctor BR Ambedkar Bhavan for which necessary funds have been placed at the disposal of Collector, Hyderabad, is likely to be completed shortly. This Bhavan will have facilities like Auditorium, Seminar Halls , Library, Marriage Hall etc.

Government will continue the efforts towards uplift of tribals during 1989-90 also. Besides continuing schemes like Rehabilitation of Scheduled Tribes, Podu Cultivators in the Sub-Plan Areas of the State and the Compact Area Programme in the Sub-Plan Areas of Khammam district, special programmes were taken up by the Government for the development of Primitive Tribal Groups of Nallamala Hills during the current year. Sanction was also award had for starting 40 Single Teacher Schools exclusively for the children of Chenchus in the remote pockets of Nallamala hills. Under Telugu Girijana Magana Samardhana, 4,849 villages have been surveyed and an extent of 1.498 lakh acres has been assigned to tribals.

It is proposed to increase the percentage of coverage in all the on-going schemes during 1989-90. Further, as the tribals living in remote areas find it difficult to register their names in the Employment Exchanges, the 8 Integrated Tribal Development Agencies in the State are going to be notified as sub-employment exchanges to the enable the local tribals register themselves with them for employment.

As this august House is aware, apart from the welfare of Scheduled Castes and Scheduled Tribes, our Government have also been making special efforts for Backward Classes welfare.

During 1989-90, all the 1,267 Backward Classes hostels, 58 hostels for the children of Fishermen and 22 hostels for the children of Wadders and Shepherds maintained during 1988-89 would be continued.

Special emphasis is laid on training programmes for Backward Classes youth. Job oriented training courses, like computer training, training in flying clubs and training of Backward Classes Women in Training-cum-production centres and in other allied sectors are proposed to be started. The budgetary allocation under this scheme has been enhanced from Rs. 10.50 lakhs to Rs. 22.75 lakhs.

The A.P. Backward Classes Financial Corporation proposes to finance 49,280 Backward Classes families under margin money loan schemes apart from providing infrastructural facilities to professional Backward Classes families and to provide financial assistance to Washermen and Hair Dressers during 1989-90.

100 Dhobighats are proposed to be constructed in the State by the A.P. Washermen Co-operative Societies Federation apart from giving loans to 3,500 Washermen families true Washermen Co-operative Societies during 1989-90.

Educational schemes like sanction of post and pre matric scholarships, fellowships to M.Phil and Ph.D Scholars, stipends to I.T.I students, reimbursement of tuition fees and special fees etc.,, are to be continued during 1989-90. Further, the Government have also decided that the Backward Classes Day Scholars from class IV to class VI would be supplied Nationalised Text Books in lieu of scholarships on experimental basis.

Considering the social and economic backwardness Nayee brahmins, Government constituted during 1988-89 a State Level Federation for the upliftment of this community in order to plan, promote and implement specific programmes for their benefit. An amount of Rs. 6.00 lakhs is proposed to be given to this Federation during 1989-90.

Public Distrubution System
This august House is aware that one of the major welfare programmes of our Government is to supply rice at Rs. 2/- per kilo to the poorer sections of the population so that they may be atleast partly insulated from the adverse effects of inflation. During the five year period 1983-84 to 1987-88 our Government has spent nearly Rs. 730 crores on this scheme. The revised estimate of expenditure under this scheme for the current year is about Rs. 278 crores. A provision of Rs. 322 crores has been made for this programme in the Budget for 1989-90. With every upward revision of issue price of rise by the Government of India, the expenditure for the State Govermnent on this programme is increasing. However, I would like to assure that the Government's commitment to this poverty alleviation programme of distribution of subsidized rice to families whose income is less than Rs. 6,000 per annum, is total and unequivocal. I would like to mention in this context that there is increasing awareness that development does not necessarily bring in its wake improving living conditions for all. I would like to request the Government of India, Planning Commission as well as the Ninth Finance Commission to seriously reconsider their attitude towards food subsidies for the weaker sections in the light of the kind of evidence that eminent economists like Prof. Amartya Kumar Sen have presented recently.
School Education

The Government attach very high priority to the Universalisation of Primary Education. The thrust areas are in Primary Education are

1.Universal enrolment and Universal retention of children

2.improvement in the infrastructure and other facilities

3.improvement in the quality and content of Education.

In order to give the necessary direction and guidance to these programmes, a State Council of School Education is being set-up, for the first time in the country. The commitment of the Government to a qualitative transformation of school education is reflected in the steep increase an in plan outlay from Rs. 3,701.54 lakhs in 1988-89 to Rs. 9,660 lakhs in 1989-90.

An additional 5 lakh children in the age group of 6-11 years and 2.66 lakh children in the age group of 11-13 years are proposed to be enrolled during the current financial year. Particular emphasis is being laid on the equalisation of educational opportunities by focussing attention on the enrolment of girls, Scheduled Castes and Scheduled Tribes.

The State Govermnent have undertaken a massive programme of construction of primary school buildings. Over 14,000 Classrooms are taken up for construction. Once Phase-II of the Primary School Project, which would be funded by the Overseas Development Agency, is approved the construction programme would receive a further impetus.

Simultaneously, in order to improve the quality is teaching, teaching and learning materials are being supplied to over 17,000 schools with an outlay of Rs. 1,329 lakhs, under Operation Black Board. An amount of Rs. 500 is being released to each school for use of these materials. In order to improve the quality of teachers, particular emphasis is laid on upgrading the Teachers Training Institutions (TTIs). Nine District Institutes of Education and Training (DIETs)) are now being set-up. Eight more DIETs would be set up in 1989-90, leaving only six Districts which too are expected to be covered in 1990-91. The main thrust in the DIET is the in-service training of primary school teachers and exposure of these teachers to the new education technologies. Final touches are being given to Phase-II of the Primary School Project. The project would extend over seven years with effect from 1st April, 1989 with an outlay of Rs. 72.51 crores. Through this Project, the inservice training would be extended to the mandal level. Thereby in the entire country, Andhra Pradesh would have yet another educational innovation to its credit. The training modules and materials are being prepared by the State Council of Educational Research and Training.

The major-innovative programme of audio-visual programme has acquired further impetus. In 1986-87 and 1987-88, audio-visual education was introduced in 1,000 schools of Krishna, Nalgonda, Chittoor Districts. During 1988-89, 10,000 more primary schools, all over the State are being covered. All Residential Schools in the State are also being covered. Video lessons for classes I and II have been completed and those for class III are nearing completion. This revolutionary programme of classroom instruction would be further extended to more Primary Schools during 1989-90.

Vocatinal Education at Secondary stage is yet another educational innovation initiated by the State Govermnent. Vocational education seeks to relate education to the world of work and instill the necessary skills and imbibe the students with proper values, attitudes and respect for dignity of labour. Technical Training workshops with full facilities would be set up at each Mandal Head Quarters. These workshops would cater to the needs of the schools in the Mandals. By turns, students of these schools would be imparted the necessary work experienced skills. 48 such work-shops are now under construction. In 1989-90 it is proposed to construct 50 more Mandal Vocational Workshops and also to introduce new Vocational courses like computers, air-conditioning and refrigeration, secretarial practice etc. Progressively every mandal in the State would have this facility.

The programme of curriculum reconstruction has been taken up for classes I to X to make education more purposeful and relevant to the socio-economic conditions. Concrete steps are being taken up for reform in science education. The main aim of this scheme is to improve science education by providing science kits for Upper Primary Schools, books and science equipment for High Schools and by organising training programmes for mathematics and science teachers. All Upper Primary and High School teachers will be trained in a phased manner.

Non formal education in the State has been reorganised with effect from 1st October, 1988. The basic objective of Non Formal Education is to give a second chance to school drop outs and to gradually bring them into the main educational stream by enabling the them to learn at their own pace. Non Formal and Adult Education would continue to lay emphasis on disadvantaged groups like women, Scheduled Castes and Scheduled Tribes.

In keeping with the commitment of the Government towards welfare of Minorities, three more Urdu Residential Schools were set-up during 1988-89 in Kurnool, Nizamabad and Guntur. One more school for girls would be set-up in 1989-90, in Hyderabad. 100 new Urdu medium schools are sanctioned during 1988- 89. Clear guidelines have been laid down for the recognition of minority institutions and for grant of operational autonomy.

Higher Education

One of the innovative and progressive policies initiated by the Government in the higher education sector that has borne fruit is the setting up of Junior Colleges in the Co-operative sector. 75 Co-operative Junior colleges have started functioning this year.

The Hon'ble Members are aware that Andhra Pradesh is the first State in the country to set-up the State Council of Higher Education to bring about the much needed planning and coordination of higher education and at the State level as well as coordination of State level programmes with those of the University Grants Commission. The Government are confident that the Andhra Pradesh State Council of Higher Education will come out with ideas to make higher education more purposive and cost effective. Government are of the view that as a long term objective the Government should divest itself of its financial responsibilities in the field of higher education.

Our state is among the few to implement the revised U.G.C scales of pay 1986 with effect from 1st January, 1986 for teachers in Universities and Affiliated Degree and Post-graduate colleges, at a cost of about Rs. 14 crores per annum.

Yet another major policy initiative is the concept of" earning while learning''. The Government is committed to the concept of students earning and meeting atleast a part of the cost of their own higher education so that a sense of self-reliance and responsibility is instilled in them. This scheme is being tried out in a few polytechnics and colleges and is proposed to be introduced on a large scale in all the colleges and through the Institute of Professional Studies. This Institute would have Medical, Engineering and Management Wings. An allocation of Rs. 1.00 crore and 600 acres of land has already been made for the Institute.

Medical and Health

Hon'ble Members will notice that the allocation for Medical and Public Health has been increased from the current year's level of Rs. 34.45 crores to Rs. 39.07 crores in the Budget 1989-90. In recent years, there has been significant expansion in the medical facilities available to the rural population and this has been achieved by increasing the number of Primary Health Centres to 1,243 and Sub-centres to 8,327. I am glad to mention that by the end of November, 1988, 75% of the target has been achieved in the implementation of Universal Immunization Programme in 15 Districts. The'Telugu Chiranjeevulu Sukheebhava Programme' initiated by the State Govermnent has received wide spread acclaim. The Central Government has given Rs. 1 crore as an incentive award to the State for its performance in implementing the family welfare programmes.

I would like to assure this august House that no efforts will be spared to achieve the goal of' health for all' by 2,000 A.D.

Women and Child Welfare

Hon'ble Members will be happy to know that in eight districts Telugu Bala Mahila Pragathi Praganams have been completed. In 5 districts viz., Krishna, East Godavari, Karimnagar, Nalgonda, Cuddapah, the Praganams are in various stages of progress. The current year's programme includes Srikakulam. , Visakhapatnam, Nellore Kurnool and Medak. It is proposed to cover another four districts during 1989- 90. The scheme of maternity assistance to women of agricultural labour families is proposed to be continued during 1989-90 also.

For the welfare of children below 6 years of age and pregnant and nursing mothers, a Centrally Sponsored Scheme called' Wheat based supplementary nutrition programme' is being implemented in 50 selected non-I C D S blocks.

Welfare of the Handicapped
Apart from continuing the existing activities, it is proposed to start one exclusive hostel for hearing handicapped during 1989-90. The Andhra Pradesh Vikalangula Cooperative Corporation has started training-cum-production centres in 9 Districts i.e.,, Ananthapur Krishna, Hyderabad, Visakhapatnam, Srikakulam, Medak, Prakasam, Nellore and Cuddapah. Handicapped persons are being trained in I.T.I and non-I.T.I trades. Action has already been initiated to start such training-cum-production centre in Nalgonda district. It is expected that some more Districts will be covered under this programme during the year 1989-90.
Agriculture and Allied Services

With 80% of the population engaged in agricultural activities, Agricultural naturally occupies a very important position in our State's economy.

After four successive years, this year has been very favourable for Agriculture on account of adequate and evenly distributed rainfall, in the State. Though the monsoons started on a weak note in June, 1988 it picked up well in July and rainfall of 927 mm was received against the normal of 634 m.m registering an increase of 46% during Kharif.

Sudden cessation of rains from October onwards has affected the sowing of dry crops particularly Jowar and other millets and the rainfed Rabi crops are put to severe moisture stress. However, on account of good water position in all the irrigation sources the normal area both under rice and irrigated dry crops are covered.

Special projects namely National Oilseeds Development Project, National Pulses Development Project and National Watershed Development Programme for Rainfed Agriculture were continued during the current year with sizeable allocation, to increase the production of oilseeds, pulses and all other dry crops.

Special stress has been laid on Dryland Farming on Watershed approach. As the production of Rice was on declining trend in the past 4 years, a special Foodgrains Production Programme particularly to increase the production of rice is launched in the current year as a Central Sector Scheme in the potential Districts in the State. Taking advantage of the good monsoon during Kharif and comfortable water position in all the irrigation sources, the farmers were encouraged to go in for adoption of latest technology with adequate investment on all Agricultural inputs.

Crop Insurance Scheme was also implemented during the Kharif for 13 crops to cover the risk against vagaries of the monsoon.

To bring about a greater coordination among all the concerned Government Departments and Institutions involved in the welfare of the farming community in the State, Mandala Karshaka Parishads have been inaugurated on 26th January, 1989 i.e., Republic Day.

One of the important steps to be taken for increasing agricultural production is to ensure reasonable return to the producer through an efficient marketing system. It has been programmed to provide Market Yards in all the notified mandals in the State in a phased manner. Sites for the Market Yards are being acquired under a time bound programme. Of the 987 notified mandals in the State, marketing facilities have already been provided in 189 centres while in 250 centres works are expected to commence shortly. Construction of market Yards in remaining Mandals is being taken up in a phased manner.

Rural Development

Recognizing the vital importance of the schemes like Integrated Rural Development Programme and allied Programmes and National Rural Employment Programme, the State Govermnent are providing an additional amount of Rs. 18.69 crores during the current year over the budgeted amount will attract matching assistance from the Government of India.

An allocation of Rs. 84.15 crores has been made for Rural Development sector schemes like National Rural Employment Programme, Integrated Rural Development Programme and allied programmes including Drought Prone Area Programmes in the State's Annual plan for 1989-90 keeping in view the amounts indicated by the Government of India as their matching assistance.

Rural Water Supply

During the period from April, 1983 to December, 1988, 8,340 problem villages have been provided with drinking water facilities. Besides covering another 1131 villages by March, 1989 it is proposed, during 1989-90, to cover 2500 problem villages with an allocation of Rs. 26.00 crores under State plan and an equal sum under Accelerated Rural Water Supply Scheme. As the Hon'ble Members are aware the, the Netherlands Government have agreed to finance four new projects to cover 232 villages in the districts of Prakasam, Mahabubnagar, Medak and Kurnool with an outlay of Rs. 28.89 crores. Out of this, besides an expected expenditure of Rs. 963.00 lakhs in 1988-89, it is proposed to spend a sum of about Rs. 944.00 lakhs in 1989-90.

Government of India have sanctioned three Mini Technology projects in Kurnool, Mahabubnagar and East Godavari districts and have been released a total sum of Rs. 2.33 crores so far. In Kurnool district 20 Protected Water Supply Schemes have been completed and three Community Level Deflouridation plants have been set-up and 50 Protected Water Supply Schemes are under progress. Similar schemes are proposed to be executed in Mahabubnagar and East Godavari districts also. Under Technology Mission, apart from the above, during the year 1989-90 it is proposed to take up conversion of 373 step-wells as sanitary wells to eradicate Guinea worm at a cost of Rs. 56.95 lakhs, to provide protected water supply schemes to 116 villages at an estimated cost of Rs. 290.28 lakhs, to set-up 25 Deflouridation Plants in FIVE districts and to set-up 18 Desalination projects. During 1989-90 it is also proposed to take up 68 problem villages schemes at a cost of Rs. 162.60 lakhs.




The State Govermnent are continuing to accord high priority to industrialization will provide full employment relieving the pressure of population on agriculture. A careful combination of large, medium and small scale industries programmes form the basic strategy for industrial development.

The Government have taken necessary steps for utilization of natural gas discovered in the Krishna and Godavari Basin for economic development of the State. The gas will be used as feed stock and fuel for industry and for power generation.

Apart from these, in the light of the announcement made by the Chief Minister on 1st November, 1988, the Andhra Pradesh Industrial Development Corporation has approved a scheme of seed capital assistance to women enterprises provided women constitute not less than 50% of the employees. Steps have been taken to mount an entrepreneurial development and guidance centre as per the Chief Minister's announcement.

Andhra Pradesh Industrial Development Corporation is one of the two State level corporations which are being actively considered for World Bank assistance for its proposed venture capital subsidiary. Andhra Pradesh will, therefore, be in the forefront of new thrust towards supporting new technologies and new projects with liberal financing of risk areas of industry.

For the year 1988-89, the Government have announced State advised cane price of Rs. 240 per M T linked to 8.5% recovery as against the statutory minimum cane price of Rs. 190 per M T announced by Government of India. All the sugar Factories and Khandasari units have also been asked to pay an incentive price of Rs. 10 per M T over and above the State advised price to the cane growers and this will be adjusted against purchase tax payable to Government. Further, the sugar factories under Public and Co-operative Sector have been advised to pay an additional amount of Rs. 15 per M T as special incentive to the cane growers who supply 85% of agreed cane or cane actually produced by them whichever is less.

Government accord high priority to growth of Handloom Industry in the State. 63.4% of the handlooms have been covered by cooperatives. A comprehensive handloom census of all handloom weavers in the State has been conducted to have reliable data about this important sector of our economy. With the basic object of providing sustained employment to handloom weavers and also to cater to the clothing requirements of weaker sections ( Green card holders) it is proposed to continue the welfare scheme of production of Janatha Cloth during 1989-90.

The World Bank assisted Co-operative Spinning Mill at Nandyal has been commissioned during the current year. Two more Co-operative Spinning Mills Growers' sector, one at Chilakaluripeta and the other at Siricilla are proposed to be established with World Bank assistance.

Recognizing the need for relief to the handloom weavers due to slump in the market, the Government have sanctioned Rs. 50.00 lakhs to Andhra Pradesh Co-operative Bank for distribution as consumption loans to weavers. The Andhra Pradesh State Textile Development Corporation has started two new production centres to provide employment to weavers. Government have sanctioned an advance of Rs. 40.00 lakhs to this Corporation for Janatha Cloth production to provide continuous employment to the affected weavers.

Our State continuous to make steady progress in sericulture. An integrated Sericulture Project with an outlay of Rs. 136.40 crores has been prepared for implementation over a period of 5 years with the World Bank assistance.

Urban Development

Rapid urbanisation has led to a severe strain on the limited services available in our towns and the Corporation areas. The need for increasing the drinking water supply and arranging proper disposal for the drainage has been felt acutely for a long time. The good monsoon this year has resulted in all the reservoirs supplying water to Hyderabad receiving adequate inflows. This has reduced atleast temporarily the drinking water problems in the twin- cities. In order to avoid the recurrence of the type of problems faced by us in recent times, the Government have sought World Bank assistance for Stage-II of Manjira Water Supply Scheme with adequate outlays for improvement of existing water lines and sizeable investment in sewerage. We hope that the loan from the World Bank would be negotiated shortly for accelerating the pace of this project. In a large number of Municipal towns, water supply has been given the highest priority and the schemes are under execution for augmenting the drinking water supply. Efforts are also being made by the Government to reduce congestion in Hyderabad, Visakhapatnam and Vijayawada- Guntur urban regions by encouraging development of Satellite towns.

Housing for half a million urban dwellers in a phased manner is being taken up for implementation. A provision of Rs. 5 crores has been set apart in the Budget as margin money for this Programme. The Government propose to tap institutional finance for this important housing project.

Roads and Transport

I am happy to inform the House that a project for improving and strengthening the important road link between Hyderabad and Ramagundam via Karimnagar costing Rs. 70 crores has been approved by the Asian Development Bank. The projects work will commence in 1989-90 and will be completed in a period of 4 years. The four laning project between Ankapalli and Visakhapatnam on National Highway 5 has also been accepted by the Asian Development Bank for loan assistance of about Rs. 40 crores.

Government have allotted a sum of Rs. 425 lakhs for restoration of roads damaged during the floods and heavy rains of July to September, 1988 in different districts.

The project report for the development of Kakinada port as a deep water port with direct loading and un-loading facilities has been prepared and it has been posed to the Asian Development Bank for securing assistance.

As the Hon'ble Members are aware, the Andhra Pradesh State Road Transport Corporation has been financing its expansion Programme through generation of internal resources and through borrowings from Commercial institutions. In the current year, however keeping in view the unprecedented damages to the R T C vehicles, during the disturbance in December, 1988, the Government have, as a special case, decided to provide share capital support for Rs. 8 crores which will attract a contribution of Rs. 4 crores from the Government of India.

With the addition of 1023 buses during 1988-89 the present fleet of Andhra Pradesh State Road Transport Corporation is 11594. During 1989-90, it is proposed to procure 1600 buses. The fleet utilization has been increased from 95.95% to 96.22% during this year. The network of services of the Andhra Pradesh State Road Transport Corporation covers over 95% of the State and efforts are being made to nationalise large number of Inter- State service to Tamil Nadu, Karnataka and Maharashtra. The Andhra Pradesh State Road Transport Corporation has bagged the highest kilometre per litre award, Best Improvement Programme Award, Highest Productivity Award and National Safety Award.

Accounts 1987-88
The transaction for the year 1987-88 revealed a revenue surplus of Rs. 37.15 crores against the estimated deficit of Rs. 145.84 crores and the year closed with a cash balance of Rs. 3.55 crores.
Revised Estimates
As per the Revised Estimates 1988-89, the Revenue deficit is Rs. 71.70 crores against the original estimated deficit of Rs. 110.13 crores. The year is expected to close with a minus balance of Rs. 45.97 crores against the original estimate of (-) Rs. 140.10 crores. The improvement has become possible partly because of introduction of lifetime tax on two wheelers and other vehicles and introduction of tax on total turnover and partly because of increased receipts understand certain items.
Budget Estimation 1989-90

For the year 1989-90, the Revenue deficit is estimated at Rs. 146.28 crores. The overall transactions of the year 1989-90 will result in a gap of Rs. 184.42 crores. After taking into account the opening balance of (-) Rs. 45.97 crores, the closing balance of the year 1989-90 is estimated at (-) Rs. 230.39 crores.

In spite of the very good performance of the State Govermnent in raising additional resources, it is found that there is a gap between the estimated receipts and expenditure.

I realise that Hon'ble Members will feel rather concerned about this deficit. Before briefly outlining as to how the Government proposes to tackle this deficit, I would like to impress upon the Hon'ble Members the problems being faced by the State Govermnent in its efforts to raise resources.

Hon'ble Members are aware that in recent months, our Chief Minister has, on various occasions, been voicing concern about the failure of the Union Government to help the State Govermnents is to maximize their resources. In fact it will not be any exaggeration if I say that the State Governments are being weakened by the encroachment of the Union Government into the legitimate domain of State's resources. I would like to cite a few examples here to substantiate the point I am making.

At the time of finalisation of Seventh Five Year Plan, the State Governments pleaded for a substantial increase in the States' share of market borrowings. In fact it was decided that the State's share in the Market Borrowing Programme should be increased to 33% compared to 25% during the Sixth Five Year Plan. However, it is found that this proportion is not being adhered to by the Government of India. The centre, has in the first four years of the Plan, raised, through market borrowings Rs. 24401 crores against their allocation of Rs. 20620 crores for the five year period. The States, on the other hand, have reminded well within the original allocation for the first four years.

The establishment of Apex Financial Institutions and nationalisation of major commercial banks has introduced a new dimension in the centre-state financial relationship by helping the centre to have access to new resources and denying any role to the States in formulating policies on how this expanding resources should be applied. Our Chief Minister, has already pointed out that this situation can be remedied only by setting up a National Credit Council, involving the Centre as well as the States on the lines of the National Development Council.

Yet another instance of Centre's discriminatory attitude towards the States in the matter of resources mobilisation can be found in the refusal of the Central Government to permit the State Government's Public Enterprises to mobilise resources through Bonds with special tax concessions, a facility which is available to a large number of Government of India Public Enterprises.

Centre has been persistently trying to pursuade the States to allow it to levy additional excise duty in lieu of Sales Tax on Cement, Drugs and Medicines, Vanaspathi, Paper and Petroleum Products. Our stand has been that even in respect of commodities which are already covered by additional excise duty like Tobacco, textiles, sugar, right to levy Sales Tax should be given back to the States with no restrictions regarding the rate of tax to be levied. I am glad to inform this august House that as a result of the determined efforts of the States the proposal to extend the coverage understand additional excise duty has now been given up by the Government of India.

As Hon'ble Members are aware, the approach adopted by the Ninth Finance Commission in its report for the year 1989-90 has resulted in great injustice to our State. During the recent visit of the Finance Commission to our State, we had explained in detail the need for a change in their approach.

Hon'ble Members are also aware that though the Constitutional amendment enabling the Union to levy consignment tax has been passed as early as in 1983, the centre did not move in the matter till recently. This unjustified delay has deprived the State Govermnent of additional resources by way of receipts under consignment tax for about five years. In the conference of the Chief Ministers held at Delhi on 9th and 10th February 1989 the Union Government has promised to introduce the necessary legislation for levy of consignment tax in the monsoon session of the Parliament. Let us hope that the Union Government will honour its commitment atleast this time.

There is yet another recent decision of the Central Government which is eroding the budgetary resources available to the State Governments for implementation of their plans. The Union Finance Ministry has started effecting cuts in the monthly Central Assistance being released to our State on the plea that the State Electricity Board has defaulted in its payment to National Thermal Power Corporation and Coal India, notwithstanding the assertion of the State Electricity Board that there are no dues payable by it to these central undertakings. Our Government's stand that the Central and the State Governments are not parties to the transactions and that the outstanding issues between the Public Sector Undertakings of the centre and the States should be settled by themselves is yet to be accepted by Government of India.

I referred to some of these points only to highlight the fact that the Central Government's policies and decisions are seriously affecting the resources available to the State Govermnent for implementing the plan programmes. Our Chief Minister has urged the Central Government, on morethan one occasion, to desist from the policy of hostility towards State Governments.

I would, however, like to assure the Hon'ble Members that in spite of this, hostile fiscal environment we shall not allow our developmental efforts to slacken. We have no intention at all of abandoning our welfare measures.

We shall continuously strive to explore new areas of revenue mobilisation and streamline collections from the existing sources. In pursuance of this approach, we have recently launched a bold experiment in the field of commercial taxes. Government have announced a series of measures aimed at reforming the Sales Tax structure, which we expect, will improve tax collections through better compliance.

At the instance of States, the Constitution has been recently amended increasing the quantum of Tax that can be collected on professions, trades and callings. We are working out a scheme by which we augment our revenues from this source without affecting those in the lower income ranges.

As I mentioned a little while ago, the much awaited consignment tax is likely to materialise by the middle of the financial year.

During the course of the financial year 1989-90 we hope to increase the revenues from the sources mentioned above to reduce the budgetary gap.

We are committed to bring about the growth with social justice. I request the Hon'ble Members of this august House to help us realise this objective.

Sir, with these words I commend the budget to this house.

Jai Telugu Nadu
Jai Hind