Previous Budget Speeches











I rise to present the Budget for the year 1992- 93. Hon'ble Members may recall that I had presented the Vote on Account Budget seeking sanction of expenditure for 6 months in the session of the House held in March, 1992. While we are anxious to make larger investments and further increase the pace of economic and social development of our state, we cannot ignore the reality of a severe resources constraint. The available resources have, therefore to be channelised into areas crucial for the development of the state. At the same time, it shall be our endeavour to see that the vulnerable sections are supported in such a way as to make them self reliant. These objectives have been kept in view while formulating the Budget.

Review Of Economic Trends

The area under food grains during 1991- 92 was about 74. 44 lakh hectares as against 77. 62 lakh hectares during 1990-91. According to provisional estimates, foodgrains production during the year 1991- 92 is expected to be of the order of about 119. 72 lakh tonnes as against 123. 30 lakh tonnes during 1990-91. The average index of industrial production ( 1970- 71= to 100) for the year 1991-92 showed a marginal increase of 1.7 percent over the previous year.

The Net State Domestic Product during 1990- 91, according to quick estimates, is estimated at Rs. 11,815 crores at constant prices ( 1980- 81) and Rs. 28,745 crores at current prices. During 1989-90 the Net State Domestic Product, according to provisional estimates, was Rs. 11,454 crores at constant prices ( 1980- 81) and Rs. 24,676 crores at current prices. The Net State Domestic Product registered an increase of 3. 2 percent at constant prices and 16. 5 percent at current prices when compared with 1989- 90. The structure of Net State Domestic Product shows the continuing dominance of the primary sector.

The state per capita income during 1990- 91 is estimated at Rs. 4,507 at current prices compared to Rs. 3,934 during 1989-90 ( provisional) and, thus, registered an increase of 14.6 percent at current prices. At constant prices the state per capita income increased by 1.5 percent from Rs. 1,826 during 1989-90 ( provisional) to Rs. 1,853 during 1990-91.

The Wholesale Price Index Number ( 1970-71= 100) for agricultural commodities in the state increased from 481.6 in March, 1991 to 617.5 in March, 1992 registering an increase of 28.2 percent. The Consumer Price Index ( 1960-61= 100) for Industrial workers in the State increased from 959 in March, 1991 to 1,135 in March, 1992 registering an increase of 18.4 percent.

Seasonal Conditions

As Hon'ble members are well aware, adequate rains play a vital role in agricultural production in our State and in the well being of the entire agricultural community.

The South-West monsoon has set in late in Andhra Pradesh this year. The behaviour of the monsoon was erratic and dry spells were observed in several areas of the State. This situation, coupled with the possibility of continued short falls in rainfall, became a cause for concern to the State Government. Close monitoring of the reservoir levels, the progress in planting of crops as also the condition of standing crops was taken up at the highest level in Government.

The months of August has been kinder with wide spread rains in most areas of the State. However, the Government continue to maintain a close and careful watch over seasonal conditions.

The State Govermnent had earlier this year released a sum of Rs. 10 crores for augmenting availabilty of drinking water.

Eight Five Year Plan( 1992-97)

We are in the first year of the Eighth Five Year Plan. The Hon'ble members are aware of the severe resources constraint facing the country as a whole. It is against this background that the State's Eighth Five Year Plan has been finalised in consultation with the Planning Commission. While the State Govermnent proposed an outlay of Rs. 13,186 crores for the Eighth Five Year Plan, the Planning Commission finally approved an outlay of Rs. 10,500 crores, which is slightly morethan double the approved plan outlay for the Seventh Five Year Plan.

The Eighth Plan of the State as finalised with the Planning Commission continues to accord high priority for infrastructure sectors. The largest allocation in the plan is for energy with an outlay of Rs. 3042.62 crores ( 29.0%), followed by Rs. 2,500 crores for irrigation and flood control ( 23.8%) and Rs. 2,066.53 crores for Social Services ( 19.7%). I have no doubt that we will far exceed the outlay approved by the Planning Commission. It shall be our endeavour during the Plan period to see that the infrastructure sectors are strengthened and that adequate allocations are made for the Social Services sector, specially for those schemes that relate to the Welfare of Schedule Castes, Scheduled Tribes and Backward Classes.

Annual Plan 1992-93

Hon'ble Members May recall that against an approved outlay of Rs. 1,410 crores for the Annual Plan 1991-92, the budgeted outlay was Rs. 1,724 crores. Keeping in view the resources position, the revised outlay was fixed at Rs. 1,602 crores.

The Planning Commission approved an outlay of Rs. 1,660 crores for the year 1992-93. However, in view of our commitments and priorities, a Plan outlay of Rs. 1,968 crores was provided in the Vote-on-Account Budget. I have reviewed the outlays for the year and have increased the plan provision to Rs. 1,995.80 crores in the Budget now presented. Out of the increase of nearly Rs. 28 crores, a substantial portion has been allocated to augment drinking water supply position in the rural areas and for accelerating work on the Telugu Ganga Poject. The increases made for these two schemes alone account for Rs. 25 crores.

Hon'ble Members will notice that a large number of Externally Aided Projects are a part of our Annual Plan. There is a limitation to the resources that can be transferred by the Centre to the States, as such transfers are governed by well laid-down formulae which were approved by the Planning Commission or the Finance Commission. The only way to augment our resources by way of additional transfers from the Centre is by taking up a number of Externally Aided prjects in priority sectors. As an incentive to the States to take up Externally Aided Projects, the Central Government provides additional Central assistance to the States for those schemes which are funded by external agencies. The State has been taking full advantage of this provision. I am happy to inform this august House that the Central assistance obtained for Externally Aided Projects during 1991-92 was Rs. 291 crores as compared to Rs. 68 crores during 1990-91. I am hopeful of drawing additional Central assistance of Rs. 350 crores in the current year.

I had, while presenting the Vote-on Account budget, referred to a new scheme by which Hon'ble Members of this House would have an opportunity to propose income generateing and asset createing schemes for the benefit of the poor and weaker sections of our society. The outlay provided in the budget for such schemes is Rs. 147.50 crores at the rate of Rs. 50 lakhs per constituency. The guidelines for selection of beneficiaries and schemes have been finalised and the Members may have already received copies of such instructions.


The power sector continues to receive high priority as development of the State depends on sustained and reliable supply of power. The Hon'ble Members would notice that the outlay in power sector is steadily increasing over the last two Annual Plans. This year's Plan has an outlay of Rs. 525.43 crores to accelerate the pace of execution of the ongoing schemes.

During the year 1991-92, 34 MW were added to the installed capacity by commissioning the 3rd 33 MW unit at Vijjeswaram Gas Station in March 1992 and 1 MW capacity mini-Hydel station at Chettipeta in August, 1991. The total installed capacity available for the State is 4,972 MW comprising 4,165 MW in the State Sector and 807 MW in the Central Sector.

The four Thermal Power Stations are performing creditably despite constraints relating to availability of coal. Vijayawada Thermal Power Station has received the' Meritorious Productivity Award' for eight years in succession.

It is proposed to add 85 MW capacity in the State Sector during 1992-93 by commissioning the Nagarjunasagar Left Canal Hydro-Electric Station 1st and 2nd units ( 2 x 30 MW), Penna Ahobilam Hydro-Electric Station ( HES) 1 st and 2nd units ( 2 x 10 MW) and Mini/Small Hydel Schemes ( 5 MW). In addition the State will get about 45 MW from the 6th unit of 210 MW Neyveli Thermal Power Station stage-II. The total installed capacity available would be 5,102 MW by the end of March 1993. A wind farm at Ramagiri in Anantapur district with a capacity of 2 MW has been approved by Government of India.

The works on Rayalaseema Thermal Power Station stage-I financed by Asian Development Bank are in progress and 2 units of 210 MW are scheduled to be commissioned in 1993-94. The works of Vijayawada Thermal Station stage-III ( 2 x 210 MW) and Srisailam Left Bank Power House are in good progress.

To meet the increasing power needs of the States, a number of new generating schemes have been proposed under private as well as State sector. The Planning Commission has approved the Visakhapatnam Thermal Power Station ( 2 x 500 MW) and coal linkage was also approved for the project from Ib-valley coal fields of Orissa. Visakhapatnam Thermal Power Station is proposed under the Private Sector so that the resources constraint in the Public Sector does not delay the execution of the project.

Feasibility report in respect of coast-based Thermal Power Station at Krishnapatnam ( 2 x 500 MW) in Nellore district was sent to Central Electricity Authority; and the site Selection Committee constituted by the Government of India found the site suitable. The Ministry of Environment and Forest has accorded environmental clearance after site inspection in July, 1992. Efforts are being made to take up the Krishnapatnam Thermal Power Station either with private participation or in the State sector by obtaining assistance from International Financing Agencies.


The outlay for irrigation sector is Rs. 367 crores with Rs. 295 crores for Major Irrigation Projects. Substantial part of these provisions go to Fund the on-going products like Srisailam Right Bank Canal, Srisailam Left Bank Canal, Telugu Ganga Project, Jurala, Galeru Nagari, Sriramsagar project and the Tungabadra High Level Canal serving the most backward and drought prone areas of our State.

There is a provision of Rs. 60 crores for the Telugu Ganga Project. The outlay for Telugu Ganga Project will be augmented further during the course of the year depending on the flow of funds from Tamil Nadu Government.

Hon'ble Members are aware that the execution of Andhra Pradesh irrigation-II Project covering Srisailam Right Bank Canal and Sriramsagar Project had been lagging behind for a long time. The sustained efforts of the State Govermnent have resulted in the World Bank agreeing to the clearance of the second and third set of works in this project. I am happy to inform the House that unlike the works in the first set of packages and progress on the second set of packages has been very good and we hope that with the clearance of the third set of packages the tempo of works in this project would increase further.

Government is aware of the need for creation of irrigation potential in the backward and drought prone areas of the State. In order to expedite the investigation of the projects benefiting the backward regions, 4 circles were created for investigation of new Major and Medium Irrigation Projects in Rayalaseema and Telengana regions. The investigation is in progress in respect of Handri-Niva Sujala Sravanthi, Lift Irrigation Scheme to Chitravathi, Nettampalli Lift Irrigation Scheme, Veligonda Project and Kalvakurthi Lift Irrigation Scheme. Also in the year 1992-93, we have made provisions for Flood-flow-cum-Lift Canal System from the foreshore of Sriramsagar Project to irrigate the drought prone areas of Telengana covering Karimnagar, Warangal and Nalgonda districts.

As a result of sustained efforts and increased investments in the Irrigation Sector, it is hoped that an additional irrigation potential of 49, 700 hectares would be created by the end of this financial year.

Hon'ble Members may recall that the Cyclone Reconstruction Project lays stress on improvement of drains in the Krishna and Godavari Delta Systems. In the first year of the project, 29 drains were taken up and imoved. In the current calender year 184 drains have been taken up for improvement and completed on time. The happy feature of this project is that the people and the representatives as also the World Bank officials are highly appreciative of the quality of work done. The success of the programme is mainly due to the farmers who sacrificed their second paddy crop, the public representatives who supported the programme and the untiring efforts made by the staff and officers of the Cyclone Project.

Social Welfare

Hon'ble Members are aware of the deep commitment of the Government for the welfare of the Weaker Sections specially the Scheduled Castes, Scheduled Tribes and the Backward Classes. The Government is of the view that a substantial improvement in the living conditions of the Weaker Sections can be effected through a package of economic support programs and by imparting proper education . The Co-operative Finance Corporation meant for the WELFARE of the Scheduled Castes, Scheduled Tribes and Backward Classes have been doing commendable work for the economic WELFARE of these sections.

The Scheduled Castes Finance Corporation has taken up a massive community irrigation wells programme to support 43,457 Scheduled Castes families with assistance from National Scheduled Castes and Scheduled Tribes Finance and Development Corporation. On the educational front, our experience shows that the Social Welfare Residential Schools have given excellent results both on academic development and in the personal development of the children of the Weaker Sections. I am happy to inform this House that the average percentage of passes at the 10th class examination in the Social Welfare Residential schools is 80% compared to the State average of 46%. It is also heartning that the students of the Residential schools have secured ranks within the first 100 at the State level. The Government would, therefore, like to expand the coverage under the Residential schools by opening 23 more Residential schools in the current year. These schools are expected to admit about 10,000 students additionally. An additional provision of Rs. 4.38 crores has been made in the Budget under non-plan for the establishment of these schools by regrouping the existing hostels.

Hon'ble Members are aware that the facilities for institutional credit are very weak in the tribal areas. The Girijan Co-operative Corporation which is mainly supporting the tribal economy through purchase of minor forest produce collected by the tribals has entered the field of sanctioning loans to the tribals for production al well as consumption purposes. In 1991-92, the Corporation extended loans of the order of Rs. 6 crores. The loan recoveries have reached 70%, which is quite high. The NABARD which is the agency for providing refinance to the Girijan Co-operative Corporation for the loaning programme, has agreed to provide the funds based on the encouraging recovery of the earlier loans. It is proposed to enhance the loaning programme to Rs. 20 crores in the current year. We hope to benefit 72,000 tribal families in the current year through this loaning programme.

The outlay for the welfare of the Backward Classes has been stepped up by 20% in the current year over the last year's plan outlay. The additional out lays will be utilized to provide greater support to the Backward Classes in the fields of education and economic development.

Welfare of Minorities

Improvements in the social and economic development of the miniorities is a matter of abiding interest to the Government. With a view to stepping up the activities of the Miniorities Commission, the outlay for the commission has been increased from Rs. 1 lakh in 1991-92 to Rs. 61 lakhs in the current year.

Local Bodies

Government is deeply concerned about the financial position of the Local Bodies especially the Muncipalities and Muncipal Corporations. The severe resources constraint in these bodies is reflected in the poor maintenance of roads and water supply facilities. The Government has, in the last two years, tried to augment the resources of these institutions by providing additional grants for improving roads and drains. This cannot provide a long term solution to the problems faced by the Local Bodies. The Government has, therefore been considering for sometime ways to augment the resources to Local Bodies to enable them to discharge their functions effectively. A scientific revision of the property tax which is the main source of revenue for the Local Bodies is an immediate necessity. Act 20 of 1989 and Assessment of Tax Rules 1990 provide for a scientific revision of property tax to augment the Muncipal income. The Muncipalities are in the process of revisioning property tax assessments based on the principles laid down in the Act and the Rules.

In order to to further strengthen the resource base of the Local Bodies, the Government has considered the need for a larger transfer of the collections under Profession Tax to the Local Bodies. Hon'ble Members may recall that Profession Tax was traditionally levied and collected by the Local Bodies for a long time. In 1987, the power to levy and collect the tax was with drawn from the Panchayats and Muncipalities and the State has taken upon itself this responsibility. It is no doubt true that this measure has resulted India substantial increase in the tax collections.

The share of the Local Bodies, however, remained constant as the amounts transferred to the Local Bodies from out of these collections were limited to the amounts collected by them prior to the withdrawal of powers for levy of tax. As a first step in ensuring greater devolution, we had in 1990-91 doubled the amounts transferable under this Act to the Local Bodies. This resulted in increasing the transfer from Rs. 5 crores to Rs. 10 crores. We find that this is inadequate. The Government has, therefore, decided to transfer 85% of the total collections under Profession Tax to the Muncipalities, Muncipal Corporations and Gram Panchayats. Necessary legislation to give effect to this decision will be introduced. As a result of this decision, the amounts transfered to the Local Bodies from Profession Tax collections are expected to increase from Rs. 10 crores to Rs. 25 crores. This additional devolution, I am sure, would enable the Local Bodies to improve the quality of services provided to the public.

Rural Water Supply

The attempt of the Government is to provide potable drinking water in all the villages and hamlets of our State. Over the years, investments have been made in providing borewells and protected water supply schemes to various villages. In our anxiety to cover as many new villages and hamlets as possible, there has been a neglect of the facilities after construction, as a result of which some protected water supply schemes earlier commissioned and the borewells excavated have gone out of order. We have so far identified 2,966 protected water supply schemes which require restoration and 7,879 defunct the borewells which can give optimum results after improvements. Government has, therefore launched a special programme called'' RAJIV GANDHI DRINKING WATER SUPPLY MOVEMENT'' to restore these facilities within a period of 2 financial years. In the budget now presented, I have provided an additional amount of Rs. 15.48 crores for meeting the likely expenditure on restoration of the protected water supply schemes and the defunct borewells during the course of this financial year.


The State has a vast potential for development of horticulture as it is endowed with a variety of soils and tropical climatic conditions. These conditions are conducive to growing a wide range of fruits, vegetables, flowers, ornamental plants and a host of commercial crops. In order to to tap the vast potential available in this field the Government had stepped up allocations for this sector from Rs. 85 lakhs in 1990-91 to Rs. 10 crores in the current year.

The accent in this programme is on development of dry land horticulture through moisture conservation techniques like drip and sprinkler irrigation. This coupled with production and supply of quality plant material and adoption of a package approach has yielded good results and the response from the farmers is encouraging. Special emphasis is also laid on extensive coverage of the Scheduled Caste and scheduled Tribe families in the horticulture program.

Hon'ble Members are aware of the strides made by us in expanding the area under ground-nut and sunflower. We are now poised for expansion of area under Oil Palm cultivation. In view of the success of the pilot project for Oil Palm cultivation the State Government, with the assistance of Government of India, proposes to increase the area under Oil Palm to nearly 50,000 hectares. It shall be our endeavour to make the State first among the States in the country in oil Palm cultivation. The Government of India has also a number of schemes where they provide 75% of the cost if the balance of 25 percent is met from the State funds for giving a boost to oil Palm cultivation. We shall try to take full advantage of these schemes for promoting Oil Palm cultivation.


Brackish Water Prawn Culture has been given due importance by the Government. In addition to World Bank assisted Integrated Shrimp and Aqua culture project with an outlay of Rs. 81 crores, the Government proposes to aveil itself of NCDC assistance for a project with an outlay of Rs. 21.95 crores to provide assistance to 50 Fishermen Co-operative Societies for improving pisciculture. The State is at the threshold of a substantial increase in fish production as a result of these 2 projects. INDUSTRIES.

In view of the new industrial policy it is necessary for us to generate a proper climate for industrialization in the State through provision of infrastructure and appropriate package of incentives for the industrialists to invest in the State. The State Govermnent has, therefore, decided that the liberalised package of incentives scheme applicable upto 2nd October, 1992 be extended upto the end of the Eighth Plan Period.

The Andhra Pradesh State Financial Corporation has been allowed by Reserve Bank of India and Industrial Development Bank of India to enter the capital market by floatation of long-term unsecured debentures to the extent of Rs. 25 crores. This is the first of its kind in India as far as State Financial Corporations are concerned. This will enable the Andhra Pradesh State Financial Corporation to play its promotional role in a more effective manner.

The pace of industrialization of the State can also be quickened through the increased investment by the Non-Resident Indians (N.R.Is). A conference of NRIs was held in Hyderabad last year. A delegation of the Government of Andhra Pradesh headed by the Hon'ble Minister for Major Industries visited the United States of America and attended the N.R.I Conference which was organised in New York. The delegation made a presentation about the industrial investment opportunities available in Andhra Pradesh and also explained in detail various aspects of the national industrial, trade and financial policies. The delegation could obtain initial proposals for investment to an extent of Rs. 600 crores.

The handloom industry has great potential for large scale employment and Government has accordingly given a very high priority to fostering the growth of this industry in the State. With the basic objectives of providing sustained employment to handloom weavers and also to cater to the clothing requirements of the weaker sections, the scheme for the production and supply of Janatha Sarees and dhoties is being continued during 1992-93.

A package of WELFARE measures is being implemented to assist weavers, namely the Thrift Fund Scheme, the Group Insurance Scheme and construction of work shed-cum-houses. These schemes are being continued during 1992-93.

Hank yarn required by handloom cooperatives is made available by Co-operative Spinning Mills. The Chilakaluripeta Cooperative Spinning Mill in the growers sector was commissioned in May, 1992. A similar unit under construction at Sircilla will be going into production later this year.


As I mentioned during the course of the presentation of the Vote-on-Account Budget, this sector has been making rapid strides in our State. Cocoon production has reached a level of 27,032 tonnes. The flow of institutional finance to this sector has helped augment production.

We are implementing a World Bank aided National Sericulture Project with an outlay of Rs. 118.44 crores as also an Indo-Swiss Project with an outlay of Rs. 3.20 crores for promoting Sericulture development.

We have made a Plan Provision of Rs. 7.42 crores in this sector in the current year.


The State has been making rapid strides in the field of education in the past 2 years. The objective of the Government is to ensure the reach of education to every doorstep in the State. Accordingly, Mass Literacy movements are being encouraged in all the districts in the State. So far 15 out of the 23 districts have embarked upon these total literacy movements. It is a matter of pride that Andhra Pradesh stands first in the country in terms of coverage of learners in these campaigns. To support this program an outlay of Rs. 11 crores is provided in the budget compared to Rs. 4 crores provided in 1991-92.

In order to achieve Universal Primary Education, the Primary Education net-work in the State is being strengthend with assistance from the United Kingdom and under the Operation Black Board programme. 9004 new teacher posts are sanctioned under the Operation Black Board programme this year. Provision of Audio Visual Education, systematic teacher training and also scientific activity oriented teaching techniques, are expected to go a long way in improving the content of teaching in the primary schools. The Government has started an' open school' close programme for the first time in the country providing schooling to children in the backward areas and to the disadvantaged sections of society.


Last year was an year of intense activity in the field of sports. The State had the honour of hosting the Pre-Olympic Asian' B' group qualifying Football Tournament at Hyderabad. The infrastructure built up for hosting the Tournament provides a sound base for increasing sports activities in our State. With a view to encouraging talented youngsters who have keen interest in sports, a Sports School has been established this year. The emphasis in the school will be on sports while imparting formal education from Class-V to intermediate.


The Hon'ble Chief Minister, while presenting the Budget in March, 1991 referred to the deplorable condition of roads in Rural and Municipal areas and indicated that the Government was committed to the improvement of the roads net-work in the State. A beginning was made last year by providing Rs. 100 crores additionally for maintenance of roads compared to the normal allocation. A similar provision of Rs. 100 crores over the normal level of maintenance grant was made in the current financial year also.

The roads sector is dominated by the externally funded projects. The Asian Development Bank is financing the Rajiv Rahadari which connects the city of Hyderabad to the industrial complex at Ramagundam. The port at Kakinada is proposed to be linked to the hinterland by improving the road between Rajanagaram and Kakinada. This is also assisted by the Asian Development Bank.

The Cyclone Reconstruction Project aims at strengthening the road net-work in the nine coastal districts of the State. The investigation, designing and estimation of the road and bridge works have been completed and are ready for grounding. I am also happy that some of the works started last year are nearing completion, well ahead of the time-frame fixed for them. The Government are confident of fully utilizing the assistance provided by the World Bank for this sector.

As part of the A.P. Irrigation-II project, a net-work of roads will be laid in the Command Area of Sriramsagar and Srisailam Right Bank Canal which is financed by the World Bank. As I mentioned earlier, we have taken steps to accelerate the irrigation works and simulataneously taken effective steps to improve the pace of execution of the road works.

Welfare Of Employees

Hon'ble Members are aware of the fact that Government appointed the Pay Revision Commissioner last year. On the request of various State Associations, Government considered and sanctioned interim relief to employees at the rate of Rs. 60 or Rs. 100 per month, depending on the scale of pay. The commitment on this account has been estimated at Rs. 50 crores during the course of this financial year.

Accounts 1990-91

The accounts for the year 1990-91 revealed a revenue deficit of Rs. 157.60 crores and the year ended with a deficit of Rs. 25.88 crores.

Revised Estimate 1991-92

Transactions as per the Revised Estimate 1991-92 indicate the revenue deficit as Rs. 227.16 crores against the estimated revenue deficit of Rs. 561.90 crores.

Budget Estimate 1992-93

The revenue deficit for the year is estimated at Rs. 342.77 crores. The overall transactions of the year 1992-93 are estimated to result in a gap of Rs. 210.06 crores. After taking into account the opening minus balance of Rs. 29.85 crores, the year 1992-93 is estimated to close with a deficit of Rs. 239.91 crores.

The budgetary deficit is a matter of serious concern to all of us. Those sections of the population who have benefitted more during the decades of development should contribute to the State Exchequer to enable the Government to assist those whose gains over the years have been limited. The revenue collection machinery would be mobilised to plug loop holes in realisation of revenues. It is also necessary to curb unproductive expenditure. It shall be my endeavour, during the year, to control expenditure and maximize revenue so as to limit the deficit to a reasonable level.

With these words, I commend this Budget to the House.

Jai Hind