Previous Budget Speeches









I rise to present the Budget of the Government of Andhra Pradesh for the year 1997-98.

From the point of view of economic and financial management, the current year has been a very formidable challenge. Honorable members are aware of the fiscal adjustment measures undertaken by the Government during the year based on the feedback to the while papers, including the mature counsel of this august House. What we have done so far is, however,only the beginning of a difficult process of adjustment. We have a long way to traverse in ensuring sustainable development and an acceptable quality of life for each and every citizen of the State. I need hardly remind the honorable members that no single issue will shape our future as a state and as a people as profoundly and as extensively as our economic progress. It is to achieving such all round economic progress that our Government is dedicated. Honorable members will have several opportunities during this budget session to test our Government's dedication to this task. I only want to say that we will deeply value your suggestions and your constructive criticism.


With the consent and cooperation of the Government, the World Bank has done a detailed study of our economic performance and financial management The World Bank report has taken a long term view dating back to the early 80s and the broad findings are quite disturbing. The study has revealed that despite the state's rich resource base and physical and geographical advantages, the gross state domestic product has grown only by 4.6 per cent per year since the early 80s which is lower than the national average of 5.2 per cent and considerably below the aggregate average growth rate of 5.7 per cent recorded by the country's 6 fastest growing states. This growth gap has widened the disparity in the living standards between us and the rest of the country. Social development in the state has also lagged behind the national level.

The World Bank's assessment corroborates our own internal findings as indicated in the white papers. At the heart of our economic under performance is the state's inability to deliver essential infrastructure and social services. Over the years, the expenditure structure of the Government has evolved in such a way as to allocate increasingly larger funds for salaries, loosely targeted subsidies and welfare programmes, where marginal productivity and cost effectiveness are low and declining. This has diverted scarce public resources away from productive uses in economic and social infrastructure, and has consequently inhibited private investment and curtailed growth. The impact of this is reflected in the following structural weaknesses in the state finances:

Deteriorating public finance situation characterized by growing revenue deficits and increasing cost of debt:

Decline in the pace of capital formation; Inadequate provision for physical infrastructure; Insufficient allocations and inadequate emphasis on human resource development, especially primary education and public health;

Inefficiency in resource utilization characterized by (a) spreading resources thinly over several projects; (b) outlays on new projects preempting maintenance expenditure even though expenditure on maintenance yields a greater return for every rupee spent than expenditure on new projects; and © disproportionately large expenditure on wages and salaries of maintenance staff as opposed to non wage O&M expenditure; and

Loosely targeted poverty alleviation programmes.

5. The Government is deeply conscious of the need to reverse these trends. Failure to do so will mean that growth and social development will stagnate further widening the gap between the State and the rest of the country.

Government intends to make the necessary fiscal adjustment in order to transit to a higher and sustainable growth path. The main thrust of this programme will be to strike a judicious balance between a social safety-net programme aimed at poverty alleviation and a development strategy aimed at poverty eradication which, in turn, targets not just on supplementing the incomes of the poor through subsidies but at enhancing their income earning capacity.

The economic impact fiscal restructuring is expected to be substantial. State finances will become resilient with increased revenues, radically changed expenditure composition and reduced fiscal deficit. The restructuring programme will create a virtuous circle in which fiscal and accompanying sectoral reforms enable the state to rebuild its infrastructure, stimulating private investment, accelerating growth and creating employment and income for a larger segment of the population. The growth rate of our GSDP is expected to exceed the average growth rate of the nation, gradually reducing the gap between AP and the country as a whole in economic and social development. Our Government has the will, determination and commitment to put through what will be a difficult, but certainly desirable, adjustment programme. I assure the honorable members that we will take this House into confidence as soon as we firm up details with the World Bank.


In accordance with the Common Minimum Programme, the United Front Government at the Center has launched a vigorous debate on furthering the resilience of our fiscal federalism. It is our firm belief that the process of reforms cannot be meaningfully pursued without the active involvement of the states. It is also important that the impact of reforms on state finances is comprehensively factored into the future reform agenda. Reflecting the need for a paradigm shirt in Center-state fiscal relations, out Chief Minister proposed a 10-point formula at the meeting of the Inter State Council in October 1996. As it has been hailed as intellectually the most comprehensive statement on fiscal federalism in the context of economic reforms, I will, with your permission Sir, reiterate it to this House.

Centrally sponsored schemes (CSS) should be abolished. The money presently earmarked for CSS should be transferred to states as united grant as part of tax devolution. States are in a better position to design and implement schemes reflecting local needs, priorities and problems.

All central taxes are to be pooled for devolution to the states as recommended by the Tenth Finance Commission. 50 per cent of the total pool is to be devolved to the states as per a broad formula to be approved by the NDC with fine tuning left, however, to the Finance Commission.

50 per cent tax devolution as above, which is significantly higher in quantum than at present, will subsume flows currently coming under tax shares, CSS, plan grants and grants under Article 275.

The tax rental arrangement providing for additional excise duties on sugar, tobacco and mill made textiles should be annulled. The power to levy sales tax on these commodities should be reverted to the states.

The role and responsibilities of the Planning Commission should be downsized. The Commission should be restricted to giving loans for specific projects to be negotiated by each State. The terms and conditions of loans in various sectors could be used by Center to signal national priorities.

The Tenth Finance Commission recommended a scheme for marginal debt relief to the states linked to fiscal performance and dis-investment in public enterprises. This should be supplemented by a second scheme of debt relief linked to investment of the resultant savings for human resource development such as primary education, female literacy and primary health.

The Center must take the lead and initiative in fulfilling the Mahatma's dream of total prohibition. The hands off policy pursued so far by the Center is regressive. States that implement prohibition should be compensated for the revenue sacrificed to the extent not taken into account by the Finance Commission.

The restriction on borrowing by the states under Art 293 of the Constitution is anachronistic and should be removed. States should be allowed to tap the market as they like. In a market driven economy, the market can be depended upon the impose the necessary checks and balances to keep borrowing at prudent levels.

Consequent on the removal of the restriction on states' borrowing as above, the states should also be free to raise external commercial loans subject to regulations governing ECB as may be in force from time to time.

Even as infrastructure is the critical bottleneck inhibiting economic activity, we have not so far been able to formulate clear policy guidelines governing foreign participation in even the major infrastructure sectors. We suggest that the Center should study the problem comprehensively and formulate policy guidelines for foreign participation in infrastructure sectors.


The task of development, as I had said in my previous budget speech, is much more than designing schemes and providing resources for them. No enduing results can be achieved unless we complement them with an efficient and responsive delivery system. Our Government's commitment to administrative reforms reflects this understanding. In his address to this House earlier this week, His Excellency the Governor outlined in detail our Government's approach to administrative reforms and utilization of information technology. I will not therefore repeat that. But to give the Honorable members an idea of our perspective on this issue, I request your permission, Sir, to quote from our Chief Minister's speech on effective and responsive administration delivered at a national level Retreat for Collectors and Superintendents of Police last month. The Chief Minister said:" In three years from now, we will be entering the next millennium as the world's illiterate, underfed, under clothed and undernourished nation. Successful societies of the next century, as the Times of India said in a recent editorial, will be those than can adapt themselves to changing life styles, changing technologies, changing environment and changing methods of governance. How does one manage change of such a complex nature in a society that is so illiterate and ignorant that it cannot even grasp the dynamics of change, let alone make informed choices within the constraints of space and time? This is the enormity of the collective challenge confronting the political and administrative leadership as India heads into the twenty -first century." Our approach to administrative reforms will be designed to squarely meet this challenge.


As per quick estimates, the Net State Domestic Product for 1995-96, at current prices, is Rs.62,036 crores as against Rs.55,230 crores for 1994-95 registering an increase of 12.3 per cent. At constant (1980-81) prices, this estimate of NSDP for 1995-96 translates for Rs.13,777 crores as against Rs.13,027 crores for 1997-95 showing an increase of 5.8 per cent.

The per capita state income at current prices increased from Rs.7798 in 1994-95 to Rs.8615 in 1995-96 registering an increase of 10.5 per cent. At constant (1980-81) prices, the per capita income increased from Rs.1839 in 1994-95 to Rs.1913 in 1995-96 recording an increase of 4.0 per cent.


The Planning Commission approved an outlay of Rs.2989 crores for the Annual Plan 1996-97. The Budget provision for the Plan was originally fixed at Rs.2988.77 crores. The revised outlay for 1996-97 has, however, been reduced marginally to Rs.2773013 crores in keeping with the revised estimate of resources.

The budgetary allocation for the Annual Plan 1997-98 has been stepped up to Rs.3809 crores reflecting an increase of 2704 percent. Significant increases in allocation have been made in Social Services sectors. Agriculture and in infrastructure sectors like Irrigation, Energy and Transpor.


Our Government is deeply sensitive to the challenges that we face in our quest for social renewal and economic resurgence. Challenges of these dimensions warrant a multifaceted response at several levels and in several forms. For far too long we have depended on top down administration designing and implementing development programmes with an elitist outlook and patronizing attitude. We need to make a quantum departure from the past and involve people every step of the way in designing, implementing and evaluating development programmes.

Reflecting this new ethos of governance, our Government has launched the historic and innovative 'Janmabhoomi' programme, whose overriding purpose is to involve people in the growth and development of their villages. Through the programme, we hope to nurture and foster the spirit of hard work and dedication and make individuals look at themselves as members of their community and to harmonize their individual interest with the collective well being of the community. The Janmabhoomi programme conceived by our Chief Minister, therefore, is an attempt to give a vigorous thrust to economic resurgence with the village as the unit for planning and entrusting the design and implementation of those plans to the villagers themselves. And may I add that the Janmabhoomi programme is a genuine attempt at giving a concrete shape to the Mahatma's concept of making very village a resilient economic and social unit.

The Janmabhoomi programme has 3 components: Prajala Vaddaku Palana, aimed not only at taking administration to the door steps of the people but also to giving practical manifestation to the concept of social audit; Shramadanam involving voluntary community work so as to build solidarity and sense of belonging to the community; and finally participatory micro-level planning to design development schemes in response to the felt needs at the grass roots.

The first phase of this pathbreaking JANMABHOOMI programme was launched on 1 st January, 1997. The programme evoked spontaneous and enthusiastic support of millions of people, especially the youth, across the State.

The achievements under the Sramadanam component have been impressive. People have taken up a large number of works at the village level on their own initiative. But what is even more heart warming is that they have also come forward to share the cost of a number of works. About 26 lakh people participated in the programme taking up 4.5 lakh works on 100% community contribution basis. The value of work turned out across the State is well over Rs.50 crores. In addition, offers have been received, on 50% contribution basis, for 23,000 works valued at Rs.132 crores.

Under the participatory Planning component of the programme, 4 lakh students and 8 lakh youth, in terms of 8 to 10 members, under the leadership of a lecturer/teacher, gathered basic information about the 45000 habitations and also carried out socio-economic survey of 27 lakh households, building in the process, a valuable data base besides enriching their own learning.

I must say, and do so with considerable pride, that the Janmabhoomi programme has received very complimentary notice both nationally and internationally. Enthused by our success, many other states are planning to launch similar programmes in their states. Many NRIs too have come forward to contribute to the programme both through resources as also their physical participation. Government intends to build on the programme based on the feedback and promise of support.


Honorable members are aware of the colossal loss to life and property caused by repeated ravages of nature over the year. There was heavy loss on account of torrential rains in June, August and September while the loss due to the floods in October and the cyclone in November was much more extensive. The total loss on account of rains and cyclone during the year is estimated at Rs.7577 crores, besides loss of 1743 human lives and part or full damage to 8.07 lakh hectares were lost or damaged. Tragic as this devastation has been, the loss would have been much heavier but for the timely; intervention of the administration in taking precautionary action.

The Government swung into action with the utmost alacrity to provide relief to the unfortunate victims. The relief operations were notable not only for the scale of the operation but also for their sensitivity to the plight of the victims as well as the speed and precision with which they were launched. The Chief Minister had personally camped at Rajahmundry to direct and supervise the relief operations and reconstruction activity. This 'hands on' leadership style, leading from the front as they say in the army, is not only unprecedented but also ensured that the entire operation was conducted with military precision and efficiency. The Air Force and the Army were pressed into service to supplement the effort of the local administration to rescue marooned villagers and also to reach out food to the affected people. Rice and kerosene were distributed free of cost to the victims until normalcy was completely restored. Top priority was accorded to restoring communications as that is vital for the relief and rescue operations. Both power and drinking water supply were restored in a record time, while road communication was reestablished on a war footing. Government authorized the district administrations to engage temporary workers to remove garbage and veterinary teams were dispatched from outside to supplement local efforts in maintaining health care and preventing the outbreak of epidemics.

23.Government extended relief @ Rs.1000 for each fully damaged house and @ Rs.500 for each partially damaged house. Ex-gratia @ Rs.1 lakh was given to the next of kin of the deceased without any restriction on age or income. Families of missing persons were paid Rs.5000 each as a measure of temporary relief. Owing to coordinated action and intensive effort by the revenue, police and naval authorities, the number of missing persons has been minimized. Insurance claims in respect of 832 missing persons are being vigorously pursued:

Relief assistance was provided @ Rs.625 per hectare as input subsidy to small and marginal farmers while an amount of Rs.2500 per hectare was provided for reclamation of sand cast and eroded lands. Arrangements were put in place for timely supply of quality tested inputs like seed, fertilizer and pesticides. Government have sent a proposal to the Center with an outlay of Rs.63 crores to provide relief to farmers who lost their coconut and cashew crop. The Center has agreed, in principle, to support this proposal and the amount is expected to be released shortly. To provide succor to the weaver community, one month requirement of yarn was supplied through the yarn linkage scheme of the NHDC.

Government have so far released Rs.269.73 crores towards relief and rehabilitation and towards repairs and reconstruction of properties. In response to the effective case put forward by the State Government, Government of India released Rs.142 crores from the National Calamity Relief Fund. There has also been spontaneous and widespread response to the appeal made by the Government for contribution to the Chief Minister's Cyclone Relief Fund which enjoys full exemption from income tax under Section 80(G) of the Income Tax Act. The total contribution to the fund so far has been Rs.58.82 crores. I want to take this opportunity to thank all the people who have so generously come forward to help the Government to mitigate the hardship of our less fortunate brothers and sisters.

The task ahead of reconstruction is much more challenging. Moving extremely quickly, Government formulated a comprehensive project aimed at providing permanent protection against natural calamities and posed it for World Bank assistance. The World Bank too responded promptly by fielding an Identification Mission in the month of December 1996. The Aide Memorize furnished by the Mission indicates that the Bank is willing to consider a total project size of US $ 170 million which translates roughly to Rs.600 crores. As per the aide Memorize, 70 per cent of this is likely to be assistance from the Bank while the remaining 30 percent would have to come by way of counterpart funding by the State Government. Detailed project proposals are being finalized for the following 15 districts: East Godavari, West Godavari, Praksam, Nellore, Ananthapur, Kurnool, Cuddapah, Chittoor, Adilabad, Karimngar, Khammam, Warangal, Medak, Rangareddy and Hyderabad. A World Bank Appraisal Mission is scheduled in the current month for finalization of the proposals relating to this reconstruction project.


It is now agreed even by economic pundits that the agriculture sector will continue to be the backbone of our economic progress. It is therefore our Government's intention to 'drought proof' our agricultural economy. According to rough estimates, against irrigation potential of 217 lakh acres, only an extent of 121 lakh acres has been exploited. We will endeavour to bring the remaining area also under irrigation. With this aim, Government has given top priority to the early completion of ongoing projects. The outlays for SRSP and SRBC have been stepped up from Rs.48 crores and Rs.45 crores during 1996-97 to Rs.108 crores and Rs.83 crores respectively during 1997-98. Sufficient allocation is being made for all major projects like Telugu Ganga, SLBC, Galeru Nagari Srujala Sravanthi (GNSS), Hendri Niva Srujala Sravanthi (HNSS), SRSP-II, Veligonda, Vamsadhara states I & II and Pulichintala Project to name just a few. Government is also keen on implementing the Polavaram Project. Keeping in view the huge investment involved, we are in process of working out the means of finance. The implications of the Polavaram project for inter-state water sharing are also being studied.

Early completion of the ongoing medium irrigation projects has been given a new fillip under the RDIF programme. I am proud to say that our State has been able to secure the maximum assistance under this project. Out of the 74 projects taken up with assistance from NABARD under the RIDF programme of Rs.207 crores in the first phase, as many as 71 projects are expected to be completed by June 1997 creating an additional irrigation potential of 98596 hectares. In recognition of the State's efficient utilization of assistance under the first phase, NABARD has come forward to give further assistance of Rs.122.53 crores to execute 74 more projects during 1997-98.

Work under KC canal modernization with assistance from OECF of Rs.555 crores has been taken up in right earnest. A World Bank team has recently appraised our proposal fir a loan of US $ 300 millions for the AP III project. Works under the Sriramsagar project in Warangal district are being taken up under the Accelerated Irrigation Benefit Programme with an outlay of Rs.300 crores which will create an irrigation potential of a lakh hectares.

48 Minor Irrigation works with an irrigation potential of 15000 acres are currently under implementation with NABARD assistance of Rs.35.1 crores under the RIDFI programme. All these works are scheduled to be completed by the end of June 1997. 53 new schemes with an irrigation potential of 30,000 acres and an outlay of Rs.42.25 crores have been sanctioned under RIDF II. We have formulated a project covering 484 new minor irrigation schemes and stabilization of ayacut under 435 existing minor irrigation schemes with an outlay of Rs.504 crores. This project will be posed for World Bank assistance.

It is Government's endeavour to ensure that irrigation development is not constrained by resource availability. In order to augment resources for the huge investment required in the irrigation sector, Government intends to access the market with a bond issue. As a first step in this direction, Government have recently established the AP Water Resources Development Corporation with responsibility for execution of important irrigation projects.

Maintenance of our irrigation systems has historically been one of the weakest links in our irrigation sector. In tune with our Governments inclination towards people's participation, we intend to entrust the repairs and maintenance of the systems to water users associations (WUAs). As a beginning in the direction, Government have appointed a consultant each for 6 of our major commands who will guide and advise the farmers. The WUAs will be entrusted with the responsibility of stabilization of ayacut as also repairs and maintenance of branch canals distributors and drains. The process of decentralization will be depended in due course by entrusting the maintenance of main canals as also execution of civil works to WUAs. Government expects that this farmer centreed approach will help in efficient utilization of irrigation potential and eliminate the traditional tailender problem. ENERGY

Across the country there is a great awareness today of the urgent imperative to focus attention on the power sector. Our State will not be found wanting in effort or in achievement of results in this sector. 6 developers have been awarded letters of intent for establishing an aggregate capacity of 1,623 MW under short-gestation projects. Power purchase agreements with these developers are expected to be finalized shortly. Of the three fast track projects in our State, two projects - The Jegurupaadi (216 MW) project establish by M/s GVK and the Kakinada (208 MW) project set up by M/s SPGL have already been commissioned and have added 156 MW capacity to the State Electricity grid. Further both these plants are expected to go into combined cycle operation by July 1997 when their full generation capacities would be achieved. The above initiatives are in addition to the continuing efforts of the Government for setting up of bigger size power stations. The power purchase agreement for the 1000 MW Simhadri power project proposed to be set up by NTPC was signed last week while a corresponding agreement for the 1040 MW Hinduja National Power Project is awaiting clearance of the Centre. Techno-economic clearance for the BPL sponsored 500 MW Thermal Power Station at Ramagundam is pending with the CEA. 31 mini power plants have also been approved to provide dedicated generating capacity at industrial load centres.

The Government remains committed to completing the ongoing Kothagudem Power Station stage-V and Srisailam Left Bank Power House at the earliest. It is expected that 250 MW capacity of KTPS-V will be achieved by March 1997 and the balance 250 MW by October 1997.

I am proud to place on record the remarkably impressive plant load factor of 88.53% achieved by APSEB in January 1997 which is perhaps the best in the country. This is a tribute to the personnel at APSEB as also to the leadership and systematic management provided by the Chief Minister.

On the distribution front, despite several constraints, we are able to ensure a minimum of 9 hours of uninterrupted supply to the agriculture sector. We have also achieved considerable success in our target of ensuring replacement of damaged transformers within 48 hours.

To improve the quality of service to the consumers, energy audits are being undertaken to identify the specific points in the distribution chain where pilferage and heavy line loses occur. The crack down on unauthorized connections and pilferage has helped to improve the revenues of the Board. As many as 5929 cases were registered between April and December 1996. In order to strengthen the detection machinery to curb pilferage of energy, 4 additional police stations have been sanctioned for the districts of Medak, Guntur, Kurnool and in Hyderabad city.

In a further effort towards curbing the practice of unauthorized tapping of electricity and pilferage of power, a scheme had been evolved for the regularization of unauthorized pump sets on payment of Rs.1000 per HP in two equal installments. The scheme was kept open till 15 January, 1997 and the Board has regularized 1,16,038 unauthorized agricultural connections.

Due to better inflows into the Srisailam reservoir and improved performance of the Thermal Power Stations, the power generation position up to December 1996 improved and 24383 MU (up to December 1996) of power was supplied to the state grid against 22320 MU supplied during 1995-96.

I want to assure this House that we will spare no effort in revitalizing our power sector. The several initiatives launched over the last couple of years are starting to yield results. We will build on the gains already made towards further enhancement of efficiency and cutting down of loss and pilferage. Several proposals for capacity augmentation currently in the pipeline will be accelerated. We have also initiated dialogue with the World Bank for comprehensive power sector restructuring.



The Government initiated strategic policy shifts in the area of women empowerment and girl child development during 1996-97 by giving a new direction and depth to interventions in this sector.

The Government introduced a bill for establishment of a State Commission for women in the last Assembly session with a view to providing an institutional framework for redresssal of grievances involving violence against women and to examine the existing laws and procedures which are violative of the principle of gender equality. The Commission will also be mandated to suggest amendments to existing laws and advise in framing new strategies and policies conducive to empowerment of women and removal of gender disparities. We are awaiting concurrence of Government of India to pursue the legislation of this bill.

Hon'ble Members are already aware of the Government's decision of reservation of 33.1/3% of all available vacancies for direct recruitment for women. Furthermore, to protect full utilization of this reservation, the principle of `carry forward' of vacancies has been made applicable in situations where eligible women are not available. This will go a long way in promoting the social development and economic independence of women. Since education is the key to employment, we have extended the rule of reservation for women to educational institutions as well, including professional education.

Recognizing the need to focus on the girl child, Government introduced a scheme called "The Girl Child Protection Scheme" which aims at ensuring removal of prejudice against the girl child. The scheme envisages maintaining a long term deposit in the name of the beneficiary girl child and periodic disbursement at specified stages viz., enrollment in primary, middle and secondary stages to encourage her to pursues her education, delay the age of her marriage, and also enable her to settle down in life with a lumpsum terminal benefit of Rs.20,000.

The intervention of the State Government in the area of child nutrition and health through the comprehensive ICDS programme currently reaches out to 16.48 lakh children and 3.88 lakh women. 17 new ICDS projects have been operationalised during the year covering 2.23 lakh children under improved nutrition and health care. Under the World Bank assisted ICDS projects covering 110 blocks, 2100 women groups have been assisted with revolving fund to a tune of Rs.1.3 crores. Under the income generating activities scheme 42,000 women were extended benefits.

Organization of women into DWCRA groups has enable effective articulation of the strategic and practical gender interests of the rural women. DWCRA has been instrumental in shifting focus from the often misplaced and overemphasized thrust of gender equality of the urban women to her rural counterpart which is where gender bias manifests itself in deep prejudice and deprivation.

Currently, our State has 70,000 DWCRA groups covering 10.5 lakh women. It is proposed to organize 25,000 more groups during 1997-98 with a total allocation of Rs.31.50 crores towards state share.


48.Our Government is deeply conscious of the need to tap the vast potential for nation building resting in the youth who constitute 35% of the State's population. In order to constructively channelize the energy and enthusiasm of the youth, Government formulated a comprehensive youth policy in February 1996. The policy envisages activisation of youth associations at the village and mandal levels aimed at endowing the youth with skills for self-employment. Training will be imparted in the local ITIs and Polytechnics. The Chief Minister's empowerment of youth (CMEY) Programme was formally launched on 1 December 1996. Aimed at benefiting 20,000 youth associations during 1996, a budget provision of Rs.150 crores was earmarked for the purpose Rs.75 crores coming from the Youth Service Department and the balance from SC/BC/Minorities/Women Finance Corporations, KVIB and IRDP.

To support their career advancement, youth apearing for interviews conducted by the Andhra Pradesh Public Service Commission and various State Government Departments and undertakings are being allowed free travel by APSRTC anywhere in the State. The youth will also be paid a daily allowance of Rs.25 and provided rent free or concessional accommodation in youth hostels at district headquarters.

Government's Youth Policy receive an overwhelming response from the youth groups. The training and grounding of projects will commence shortly. Apart from two villages per Mandal to be taken up in the first phase, youth associations in all villages in the State which have actively participated in nation building and social service activities such as Janmabhoomi and Shramadan will also be considered for inclusion under CMEY. During 1997-98, the CMEY programme will be expanded and intensified to cover more youth groups, and for this purpose budget allocation of Rs.76 crores has been proposed for the Youth Service Department. This budget allocation will be complemented by allocations from welfare corporations, IRDP and KVIB.


Welfare of the weaker sections is considered a moral obligation by our Government. Unhesitatingly, our emphasis will be on promotion of education of the weaker sections which alone can provide a lasting solution to their economic and social development. About 64 percent of the total budget of this sector is being spent on educational development of scheduled castes for providing facilities such as fee concessions, scholarships, hostel facilities, free supply of text books, note books, dresses to the boarders etc. Special hostels for SC boarders studying IX and X classes have been organized. 2209 hostels, 115 residential schools, 4 residential ITIs, 3 residential polytechnics and 6 residential junior colleges have been continued. Further, 84 residential schools have been upgraded as residential junior colleges. 23 college girl hostels have been opened at the rate of one in each district. As hostels constitute the main support base for educating these deprived children, special steps have been taken to strengthen the infrastructure facilities of the hostels by providing additional funds and enhancing mess charges. As we find that the achievement levels of children in residential schools are decidedly superior, Government proposes to convert all hostels to residential schools in a phased manner. This is a unique scheme not taken up anywhere else in the country.

As an effort towards human resources development, various types of vocational training programmes are being imparted to enable weaker section candidates secure gainful employment. Coaching of dalit youth has been under implementation through the AP Study Circle, Hyderabad and the pre-examination training centres in the districts.

Social security schemes comprising running of 45 children homes, 14 beggar children homes, social security pensions to poor widows, rehabilitation of bonded labour, jogin women and scavengers are under implementation.

2,32,176 house site pattas at a cost of Rs.35.61 crores were distributed to the weaker sections. Further, an extent of 96674.38 acres of agricultural land was assigned to 61,680 beneficiaries over the last year and a half.

During 1997-98, we intend continuing the ongoing schemes with renewed vigor. Government proposes to introduce a new scheme for compulsory education of SC children and enroll about 6 lakh SC children in order to enhance their literacy rate to at least 75 percent by the end of the Ninth Five Year Plan. Enthused by the innovativeness of our programme, Government of India have agreed, in principle, to support it on a 50 per cent matching basis. Government also intend to create a corpus fund of Rs.10 crores for helping poor dalit students pursue higher studies with financial assistance in the form of soft loans to supplement the scholarship/stipend amounts already being sanctioned.


In order to neutralize generations of disadvantage suffered by backward classes, Government has already enunciated a comprehensive policy for the economic and social advancement of BCs.

Conversion of BC hostels into BC residential schools in a phased manner is contemplated in order to improve the quality of education. Study circles for BCs will also be established in a phased manner in all the districts in order to enable them to compete for Central/State services effectively.

Our government has taken a fresh initiative in providing an amount of Rs.2.40 crores through the BC Finance Corporation to M/s.Nizam Sugars Ltd. (NSF) to purchase and distribute 2400 acres of agricultural land belonging to the Nizam Sugar Factory to land less poor BCs who had worked earlier in these fields.

For the welfare of washermen, the Government has obtained a term loan of Rs.80 lakhs from the National Backward Classes Finance & Development Corporation. This will be supplemented by a budgetary provision of Rs.72 lakhs by the Government to implement the mini-laundry scheme to benefit 5333 washermen families. The government intends to implement the special occupational project for the benefit of poor artisans belonging to backward classes engaged in traditional occupations in order to raise their income levels and improve their quality of life.

The welfare of fishermen has been given a major thrust. Apart from construction of pucca houses for fishermen and continuance of Group Accident Insurance Scheme as a social security cover, modernization of fishing equipment has been engaging our attention. Accordingly, a scheme for motorization of traditional crafts and supply of modern FRP crafts with NCDC assistance has been launched. An amount of Rs. 1.06 crores has been provided for a new fishing harbour at Machilipatnam, which will provide landing and berthing facilities to 2000 mechanized fishing vessels. 2000 fishermen in 25 reservoirs will get benefited under the World Bank assisted programme.

In order to enhance their incomes, the Government is taking steps to upgrade the skills of weavers through large scale training programmes with a thrust on quality and design development by dove-tailing these with training programmes under the rural development sector. This will enable the weavers to produce marketable and value-added projects. It is proposed to establish 91 Handloom Development Centres at a cost 910 lakhs and 21 Development Units at a cost of Rs.90 lakhs. 24 Project Package Schemes are proposed to be implemented at a cost of Rs.10.60 crores. Further, 10 villages are proposed to be assisted under the Integrated Handloom Village Development Scheme at a cost of Rs.2.50 crores. During 1997-98, 5000 weavers are proposed to be assisted under workshed-cum-housing scheme with a financial outlay of Rs.11.25 crores.

With the objective of providing minor irrigation facilities to small and marginal farmers belonging to backward classes, it is programmed to provide assistance for 10000 borewells with an outlay of Rs.50 crores. Government will provide margin for this scheme which will be matched by subsidy from DRDA, loan assistance from the National Backward Classes Finance & Development Corporation and contribution from the beneficiary. The Government have already sanctioned its share of margin money to the State Backward Classes Finance Corporation.

Margin money loans to the extent of 33 1/3 per cent for BC women beneficiaries and 50 percent for the youth are being earmarked. 50,000 families are proposed to be provided with financial assistance during the year 1997-98. The Plan allocation for BC welfare for 1997-98 is Rs.35 crores.


The success of IFAD assisted Andhra Pradesh Tribal Participatory Development Programme (APTDP) has once again proved provision of food security and environmental improvement through participatory processes can make a positive impact on well being of tribals. The APTDP (I & II) are being implemented in the tribal areas of Srikakulam, Vizianagaram, Visakhapatnam, East Godavari, West Godavari, Khammam, Warangal, Adilabad and in the villages and habitations covered by the ITDA (Chenchu), Srisailam. Government has issue orders making it obligatory to entrust execution of all the works in the tribal areas to the tribals themselves.

Since any lasting solution to backwardness is only through literacy, our Government laid stress on opening new ashram schools and residential junior colleges. 3000 posts of teachers have been filled up during the year.

The health standards of tribals are, in general, inferior to the rest of the population reflecting their lower nutritional levels. Improving health cover to the tribals is therefore is extremely crucial. The establishment of an exclusive tribals health service is a big step in bridging this vital gap. 500 ANMs and 200 medical officer posts have been filled up to strengthen the health delivery system in tribal areas.

In order to ensure effective implementation of all tribal development programmes, a High Power Committee has been constituted at the state level, with the Chief Minister as the Chairman, for planning and monitoring of tribal development programmes.


Our Government has given a new thrust to fostering the social and economic development of the minorities. We are aware of the fact that the minorities in general, and their women in particular, are trapped in vicious circle of illiteracy, unemployment, and economic backwardness. In order to combat this, the Government announced during 1995-96 a comprehensive policy for their multifaceted advancement.

During the current year a concerted attempt has been made to implement the policy in its letter and spirit. These efforts were aimed at removal of illiteracy and backwardness, promotion of cultural heritage, removal of the sense of discrimination and providing minorities access to the development programmes administrated by the Government. As a part of this exercise, the official language Act has already been amended for declaring Urdu as a second official language in 8 districts in response to a long pending demand to this effect. In order to make it more effective Government has prepared a draft bill for according statutory status to the AP Minorities Commission and sent it to Government of India for concurrence. Similarly, we have formulated a draft of Wakf Bill to provide adequate executive powers to officials of the Wakf Board for more efficient management and development of Wakf institutions.

Being deeply sensitive feminization of the backwardness of the minorities, our Government have formulated a comprehensive scheme for the development of minority women and children in urban areas, which would be implemented by the department of Women Welfare. It is also proposed to see a matching central grant for the expansion of this scheme.

Special emphasis has been given for the promotion of entrepreneurship among minorities by enhancing the budget of the AP State Minorities Finance Corporation from Rs.2.5 crores during 1995-96 to Rs.10 crores during 1996-97. Of this, an amount of Rs.3 crores has been released for purchasing Nizam Sugar Factory lands for distribution among minority entrepreneurs in order to strengthen their asset base. Similarly, Government enhanced the budget allocation for improving the quality of education in Urdu medium schools, imparting vocational skills to minority women for repairs and development of Wakf properties.

The 1997-98 budget steps of the allocation for minorities welfare to Rs.25 crores. While implementing all the ongoing Plan schemes, the Government proposes to put accent on anti-poverty schemes which would include assistance to voluntary organizations for conducting health camps, educational rehabilitation of minority destitutes, women, orphans, child labour etc.


Hon'ble members are aware that Government have ordered reservation of 3% posts in favour of handicapped in Government departments and public undertaking and also ordered for trifurcation of 3% reservation (1:1:1) for visually handicapped, hearing handicapped and orthopedically handicapped. As a part of our resolve to implement this reservation effectively, a special recruitment drive has been launched which is operative till the end of March 1997. Government have also issued orders amending the provision of General Rule 22 making it compulsory for all departments to follow the 3% reservation. Orders have also been issued for filling up the backlog vacancies of teachers reserved for the physically handicapped before 31.3.1997.


Andhra Pradesh is categorized as one of the most educationally backward states in the country. This is a matter of great concern as alos a pointer for concerted action. 25 percent of children in the school going age are still outside the school network and the dropout rate is as high 40 percent. On the other hand, education is the variable that will have the single largest influence on our future as a state. We believe that universal education empowers people in a more immediate and decisive way than even universal franchise. Achieving such universalization is, in fact, a collective challenge before us. Access, retention and minimum levels of achievement should be the three pillars of our education campaign. We are open to suggestions from this august House on improving the quality and reach of our education campaign

With the assistance of the ODA, we launched the District Primary Education Programme with a total outlay of Rs.240 crores spread over 7 years in Kurnool, Warangal, Karimnagar, Vizianagaram and Nellore districts in 1996-97. The village Education Committees contributed resources to supplement budgetary allocations for improving school infrastructure. Mothers Associations are being promoted to take on the responsibility of planning and implementing programmes to promote the education of girl children with assistance coming under the Tenth Finance Commission. The implementation of midday meal programme is being improved to ensure sustained supply of 3 kgs of rice to all the school going children.

Government recruited about 25000 teachers in 1996-97 to strengthen the quality of education, particularly in the primary schools. A school monitoring information system was introduced to monitor the enrollment and retention, coverage of syllabus, conduct of tests and performance of students. The teacher training modules have been modernized and training programmes are being organized at Mandal Headquarters.

The Adult education programmes in the campaign mode generated a lot of enthusiasm in the villages and brought about awareness among people about the benefits of literacy. To sustain the programme, there is need to promote village level community structures. Efforts are accordingly being made to promote and support the village communities to manage the literacy programme. A continuing education project with a total outlay of Rs.33.70 crores was launched in 1996-97 and will be continued through next year. A post literary campaign was launched in Prakasam district earlier this year while a similar project will be launched in Nalgonda district shortly and in Anantapur and Guntur districts as soon as sanction is received from Government of India. Government of India also sanctioned an open basic education project, on a pilot basis, with a total outlay of Rs.85 lakhs for implementation during 1997-98.

Government also plan to reorient the quality of vocational and technical education. We will design a scheme for linking the technical institutions with industrial units, with arrangements for students getting practical training in the industry. The linking with industry will also help in designing the curriculum and syllabus to suit the emerging demand pattern for employment. This linkage, we hope, will benefit the students as also the industry.


Primary health care ranks pari passu with education as the key to our economic progress. We are accordingly deeply conscious of the need to improve the quality and quantum of Government intervention in health sector.

81. It is estimated that an additional 880 Primary Health Centres (PHCs) would be required to adequately cover the entire population of the state. To meet this shortfall, Government have been endeavoring to pool resources from several rural

development programmes. We have made a proposal to Government of India to allow us to utilize funds under EAS also for this purpose.

In the secondary health care sector, the World Bank assisted Andhra Pradesh First Referral Health Systems Project, with an outlay of Rs.608 crores, is under active implementation. The project involves physical upgradation of Community Health Centres, Area Hospitals and District Hospitals besides augmenting manpower and equipment commensurate with the physical upgradation. The project has also developed an effective and meaningful system of referral protocols so as to make the best use of facilities created in primary, secondary and tertiary health sectors.

Of the several interventions in health care is our emphasis on maintenance, repairs, hygiene and sanitation in medical institutions. Rs.50 lakhs has been allotted to each district for maintenance of hospitals.

The Government of India have recently formulated a scheme called 'State Illness Assistance Fund' where under a Corpus Fund will be established under an independent society in order to provide assistance to poor people in getting specialized treatment for life threatening illness. Government of India will contribute 50 percent of the allocation made by the State Government towards this fund subject to a maximum of Rs.5 crores per year. The state government have initiated steps to implement the scheme this year itself.

To develop and improve infrastructure facilities in the Indian Systems of Medicine, proposals worth Rs.11 crores have been sent to Government of India for Central assistance. We are actively canvassing the proposals with them.


The population of Andhra pradesh, placed at 6.65 crores in the 1991 census, is expected to reach around 8 crores by 2000 A.D. I need hardly overemphasize the fact that population control is as important as all our other development initiatives for sustainable economic progress. Although Andhra Pradesh has achieved a marginal decline in fertility in recent years, notwithstanding our low female literacy and high infant mortality, the state is not as favorably placed as its neighboring states in terms of population stabilization. In fact, Andhra Pradesh has recorded the most rapid population growth amongst the four southern states during the decade of the 80s. Our endeavour will therefore be not only to catch up with other southern states but even to surpass them in terms of population stabilization. Our Government will shortly come out with a comprehensive policy in this regard that will aim at making family welfare a people's movement transcending the barriers of religions, caste, creed and political affiliations.

Although there will be commonalties of approach in the general contours of the population stabilization programme across the country, specific interventions and strategies are to be designed to suit the diverse demographic, socio-cultural and socio-economic factors specific to each State. An effective population stabilization programme must be state specific, and within the state it must be district, sub-district and Gram Panchayat specific. Our policy for population stabilization reflects this specificity and defines in clear, measurable and tangible terms the demographic goals to be achieved in a time bound manner as also the intervention and new strategies proposed to attain these goals. We propose to allocate Rs.15 crores from State funds for the implementation of the State Population Policy.

No endeavour requiring social change can be successful without the wholehearted participation of the community. In order to motivate such community participation, it is proposed to institute incentives for good performance under the Family Welfare Programmes at the gram panchayat, mandal and district level which can be used for community works. We have also urged the Government of India to earmark a percentage of funds under JRY and EAS to be given as community incentives for outstanding performance under the Family Welfare Programme.

The India Population Project VI is being implemented in the rural areas of the state with World Bank Assistance. The similarly assisted IPP VIII is being in the jurisdiction of the Municipal Corporation of Hyderabad. The focus is on improving the quality of service delivery through trained personnel and fully equipped primary health institutions. With improvement in the quality of service delivery, it is expected that the health of mothers and children will improve ,with will, in turn, have a positive multiplier impact on the demographic indicators in our State.


Provision of safe drinking water to every habitation at the earliest is on top of our development agenda. The 1991 survey identified 4055 no-source habitations and 1692 partially served habitations. We have since covered all the no-source habitations, and all but 36 partial source habitations with safe drinking water. However, on account of depletion of ground water due to inadequate recharge, there has been a subsequent reemergence of 380 no-source habitations and 14356 partially served habitations. We have sent a proposal to Government of India with an outlay of Rs.714 crores to completely cover both the no source and partial source habitations as identified in the updated survey.

19825 schemes covering 12550 habitations under rural water supply are currently under various stages of implementation and are targeted for completion in all respects by the end of next year.

Flouride and brackish water contamination is a major problem in some districts. The latest survey indicated 7228 flouride and 3937 brackish water affected habitations. To correct this deficiency, 24 projects covering 1419 habitations with an outlay of Rs.146.94 crores are under various stages of implementation. We have also secured central support for an additional 17 projects for quality improvement with an estimated cost of Rs.178 crores. 30 more projects with an outlay of Rs.749 crores are pending clearance by Government of India.

In keeping with the dimensions of the problem, Government have recently formulated a major scheme for providing drinking water or augmenting the existing supply to 4887 habitations at an estimated cost of Rs.2175 crores. The proposal is currently under the process in Government of India and is expected to be posed to the World Bank shortly.

Currently hand pumps and comprehensive water supply schemes are being maintained by Government while individuals PWS schemes are being maintained by the respective Gram Panchayats. In order to decentralize this task as also to involve the people, Government is proposing to transfer the maintenance of hand pumps to the concerned Gram Panchayat and the maintenance of the comprehensive water supply schemes to the concerned Mandal Parishad or Zilla Parishad.

To augment urban water supply, Rs.87 crores is provided under the 1997-98 Plan which includes the Krishna water supply project. Government intends to complete all ongoing water supply projects in urban areas with plan funds and HUDCO loan. An amount of Rs.112 crores is provided to improve water supply within twin cities and the 9 surrounding municipalities through the Hyderabad Metro Water Supply & Sewerage Board. The Board will raise HUDCO loan to the tune of 50 per cent while the balance 50 percent will come out of budgetary allocation.

To augment water supply in municipalities, water supply schemes with an outlay of Rs.438 crores are under implementation in 66 municipal towns.


As we noted earlier, the process of liberalization has triggered a vigorous competition among states to attract investment. To succeed in this competition, Government will have to concentrate efforts in two directions. First, we need to build a robust infrastructure network. Second, we need to provide a friendly and proactive interface to the investors. Government's efforts at industrial promotion have made significant progress in both these directions.

Besides construction of general industrial estates for SSI units in various potential areas of the State, certain special Industrial Parks like the Information Technology Park at Hyderabad will also be encouraged for extending technology support and other specialized services. Mega industrial infrastructure projects are also planned for Wadapally, Krishnapatnam, Visakhapatanam, Tirupati and Kakinada.

Government have appointed Feedback Ventures, a consultant firm, to prepare a report on the potential for private investment and to prepare a strategy for realizing that potential.

In view of the need for improving the management of the cooperative sugar factories, a decision has been taken to hand over the management of 8 viable and well functioning cooperative sugar factories to the farmer members under the purview of the Mutually Aided Cooperative Societies Act.

The proactive policies pursued for creating an investor-friendly environment have resulted in the State attracting 2419 proposals since the beginning of the reform process for establishing new industries involving an investment of Rs.72162 crores and an employment potential of more than 4.26 lakh persons.

An international Investment Conference will be held during 19-20 February to promote foreign investment in the State

In order to give a further boost to industrial investment, our Government have announced a New Industrial Policy " Target-2000 " which gives significant fiscal incentives to entrepreneurs planning to invest in Andhra Pradesh. The decision making process for clearances of large projects has been streamlined with the formation of the State Investment Promotion Council chaired by the Chief Secretary and the State Investment Promotion Board chaired by the Chief Minister. Both SPIC and SIPB not only accord single-window clearance for projects but also monitor the implementation of the projects every step of the way.


Our government is acutely aware that agriculture sector alone can provide resilience to our economy and employment to the vast millions. The twin programmes of "Prajalavaddaku Palana" and "Sramadanam" sensitized the Department of Agriculture to the needs of the farmers, as shown by their quick and concerted efforts in checking spurious seeds, fertilizers and pesticides in the market and by their quick response to the needs of the calamity affected farmers during the year.

Improving the efficiency of water use at the field level by popularizing modern irrigation systems continued to be a priority with targets of 6750 hectares under sprinkler irrigation system and 10465 hectares under drip irrigation system at a cost of Rs.13.50 crores and Rs.7.47 crores respectively. Government recognizes the enormous benefits that can be reaped by scientific micro-shed water management. We intend to launch this as a major thrust area and will design our programme based on nation-wide experience in this regard.

An intensive campaign has been launched to correct the adverse nutrients ration obtained in the recent past, while popularizing organic farming methods like vermi composting. Integrated Pest Management has been one of the major planks of our extension strategy, especially in cotton, groundnut and paddy which has yielded positive results as evidenced by reduced pesticide consumption per unit area over the last 2 years.

Horticulture is a sunrise sector with an enormous potential for employment and export. We intend to exploit our comparative advantage in this area. Government proposes to give an impetus to hitech horticulture by establishing a floriculture park. The area under oil palm cultivation which is presently about 50000 acres will be stepped up substantially during the Ninth Plan period. Our thrust will be on providing the necessary forward and backward linkages to support the growth and expansion of the horticulture sector, especially in mushrooms, fruits, vegetables, chillies, cutflowers tissue culture plants as also in value added processing of vegetables and fruits to take advantage of the emerging opportunities in both domestic and external markets

We made considerable gains both in terms of production and productivity in the sericulture sector as evidenced by the increase in the yield of cocoons from 20 kg to 40 kg per 100 DFLS. Further down the chain, 9.2 kg of cocoons are now yielding 1 kg of raw silk as against 11kg earlier which is further evidence of increased productivity. The World Bank assisted National Sericulture Project and Indo-Swiss Sericulture Project, both launched in 89-90, have since been completed. We are negotiating further assistance under the Indo-Swiss Cooperation Programme to maintain and enhance our thrust in this area. In view of the potential of the sericulture sector for employment as well income enhancement, Government will continue its focus on this sector with accent on skill enhancement, technology, upgradation and building the forward and backward linkages in terms of raw material, storage and marketing.


Our initiative in legislating the Andhra Pradesh Mutually Aided Cooperative Societies Act 1995 is being hailed across the country as a pathbreaking effort towards revitalizing the cooperative movement. Many other states are, in fact, following our lead. 134 societies have been registered under the new Act so far. In order to further popularize the new Act, district level workshops are being organized

For strengthening the primary societies, integrated cooperative development projects are under implementation in 5 districts with assistance from the National Cooperative Development Corporation (NCDC). During the current year 2 more projects for Nalgonda and Kurnool have been sanctioned with outlays of Rs.7.74 crores and Rs.7.67 crores respectively. NCDC assistance Rs.3.75 crores has been availed during the current year for strengthening the district cooperative marketing societies.

Cooperative credit institutions in the state play an important role in meeting the credit requirements of the farm sector. During the current year the credit cooperatives disbursed an amount of Rs.828.50 crores as against the target of Rs.775 crores during the kharif '96 under crop loans. For Rabi 96-97, an amount of Rs.91.71 crores has been disbursed by now. Towards providing relief to the cyclone and flood affected farmers, APCOB has taken steps for conversion of short term crop loans into medium term loans and postponement of long term loans. Additional loaning to an extent of Rs.158.30 crores under crop loans and Rs.66.04 crores under investment credit is envisaged under the cyclone relief programme. For the year 1997-98, an amount of Rs.1100 crores is the target under crop loans and Rs.250 crores under investment credit.


It is Government's endeavour to redesign all rural development programmes with a more pronounced anti-poverty focus. While programmes such as IRDP, TRYSEM, DWCRA aim at increasing the income levels of the targeted poor, programmes like DPAP, DDP and IWDP aim at ensuring integrated approach to land and water management.

Four centrally sponsored schemes viz., JRY, EAS, MWS and IAY are being implemented on a cost sharing basis with the Centre. Under the Jawahar Rojgar Yojana, an amount of Rs.328.02 crores is earmarked for providing wage employment opportunities for the rural land less poor and for strengthening rural infrastructure. EAS, under implementation in the 275 erstwhile blocks, will be expanded to cover all the 330 erstwhile blocks starting next financial year.

During 1997-98 we will make a provision of Rs.588.46 crores for employment generation programs. Should the Center increase their contribution, the State share would accordingly be enhanced.


It is our endeavour to improve cleanliness, sanitation and general upkeep of our urban areas. Privatization has been selectively introduced for garbage collection and disposal. A special programme, "Clean and Green Hyderabad" has been launched in the Municipal Corporation of Hyderabad.

Under the Hyderabad Mega City project, special emphasis has been laid on streamlining traffic movement. Government have sanctioned 16 fly-overs at an estimated cost of Rs.119.5 crores in different parts of the twin cities. The works are under progress.

Government have sanctioned the National River Conversation Plan (NRCP) at a cost of Rs.34.19 crores to be shared equally by the Central and State governments. Works under NRCP will be implemented at Rajahmundry, Mancherial, Ramagundam and Bhadrachalam towns.


We continue to maintain our leadership position across the country under weaker sections housing. During the current year, we programme to sanction about 7 lakh houses. Of, this, 4 lakh houses are under rural permanent housing and 1 lakh houses urban permanent housing with a budgetary outlay of 243.30 crores towards subsidy. Further, 1 lakh houses will be taken up under IAY with matching state contribution. 43,000 houses will be constructed in cyclone affected areas with funding of Rs.45 crores from the CM's Cyclone Relief Fund matched with contributions from voluntary service organizations. Funding gaps, if any, will be filled with HUDCO assistance. Over 30,000 houses are being sanctioned for special groups like beedi workers, fishermen and weavers.

Apart from the normal subsidy of Rs.4750 per unit of rural permanent house, an additional subsidy of Rs.1000 has been provided during the year towards extra cost of foundations in treacherous and difficult soils. The income criterion for eligibility has been enhanced from Rs.6000 to Rs.11000 per annum.

The pioneering role of the state in implementing and propagating cost-effective technologies has received wide acclaim at the national Level. Efforts are being made to increase the spread of this cost-innovative technology by establishing more building centres and imparting training to masons, women groups, voluntary organizations and unemployed youth.

The AP Urban Development & Housing Corporation will be merged with the AP State Housing Corporation to give an integrated approach to the housing programme. LIG houses are being taken up in 8 Municipal Corporations. Reflecting the need for higher outlay in these areas, the outlay of LIG houses has been raised to Rs.30000, of which Rs.25000 is the loan component and Rs.5000 is the beneficiary contribution.


One fourth of the recorded forest area of the State of 63,813 Sq. Kms. Is either blank, degraded or encroached upon by cultivation. To achieve the twin objectives of restoring these forests and ensuring the food, fodder and fuel security of the forest dependent communities, a massive programme of Joint Forest Management has been launched by progressively enlisting the participation of the people in the management of forests. The institutional fulcrum of this effort is the Vana Samrakshana Samithis formed in villages having interface with forests. The members of the Samithi plan and implement the protection and development of forests, with technical assistance provided by forest officials, NGOs and experts. For the first time in the country, the State Government announced that the rights to the entire usufruct resulting from the efforts of the Samithis will be passed on to the members themselves to meet their consumption needs as also for reinvestment.

The response to the programme has been extremely positive as nearly 15 lakh acres of degraded forests are now under the protection of these Samithis. We propose to cover 35 lakh acres under this concept of greening degraded lands with people's participation over a period of 3 years. While a large part of the treatment of these areas is funded under the AP Forestry Project supported by the World Bank, resources from schemes such as the Employment Assurance Scheme and the Integrated Watershed Development Project are also harnessed for treatment of watersheds in forests.

The Hyderabad Waste Management Project is under implementation with Australian Aid. Work on a treatment, storage and disposal facility for hazardous industrial wastes generated in Hyderabad, Medak and Rangareddy districts, the first of its kind in the country, is expected to commence shortly. The World Bank assisted industrial pollution control project which aims at upgradation of the technical capability of the Pollution Control Board is also expected to get under way very soon. The Environment Protection, Training & Research Institute, which has emerged already as a modern and sophisticated facility of its kind in the region, will be expanded with Swedish assistance.


Roads and Ports is another infrastructure sector crucial to economic progress. We are making concrete efforts to improve the quality of our state highways and district roads and to widen the road network.

Under externally aided projects, improvements to the Hyderabad-Karimnagar-Ramagundam Road with loan assistance from the Asian Development Bank of US $ 37.9 million will be completed during the year 1997-98. The improvement of the Kakinada-Rajanagaram Road with ADB loan assistance of US $ 10.51 million has been successfully completed. The Visakhapatnam - Anakapally reach of NH-5, also being implemented with ADB assistance, is programmed to be completed by March, 1997.

4-laning of the Chilakaluripeta-Guntur-Vijayawada stretch of National Highway 5 is proposed to be taken up at an estimated cost of Rs.322.50 crores with loan assistance from the OECF of Japan. Strengthening of the National Highway covering Nandigama-Vijayawada-Eluru was sanctioned by the Ministry of Surface Transport under an ADB loan programme and the work is being executed by National Highway Authority of India.

The state Highway Project for improvement of 1350 kilometers of important high density corridors of the State is at an advanced stage of preparation for World Bank assistance. We expect that this project will be launched early next financial year.

There is need for private initiative to supplement Government effort in this area. State Road Projects are being offered to private entrepreneurs to develop them under the Build- Operate and Transfer (BOT) scheme. Work on the Puttur bye-pass has commenced while the Chittoor bye-pass is going to complete by June, 1997. Construction of 2 road overbridges on the outer-Ring Road of Hyderabad city has also been awarded and the work is likely to commence shortly. In addition, 6 bridges on NH-5 between Kavali and Medarametla are reported to be in the process of being awarded by the Ministry of Surface Transport.

Experience so far indicates that a major bottleneck in involving private initiative has been financial unviability. In order to rectify this, Government are now formulating a scheme to supplement private investment with Government financial support with suitable arrangement for apportioning returns. Privatization will not be confined to new road works: it will be extended also to maintenance of roads and bridges on contracts that will be awarded for reasonably long periods. Privatization for both construction and maintenance will be done on a patently transparent basis so that we get the best and most efficient packages at competitive prices.

The completion of 3 berths in Kakinada-Deep Water Port financed by the Asian Development Bank will give a major fillip to industrialization in the region. In order to promote efficient operation of the Deep Water Port at Kakinada, its operation and management are being privatized.

The Krishnapatnam minor port is being developed as a deep water industrial port with private investment of M/s. KPCL. The process of privatization of the development of Gangavaram/Muthyalammapalem port in Visakhapatnam district into a deep water port has also begun. Vadarevu will be developed to handle ship breaking industry. Development of Nizampatnam, Kalingapatnam, Bhavanapadu, Bheemunipatnam minor ports is also being posed for private initiative. Machilipatnam Port is proposed to be revived to handle cement and clinker. The foregoing schemes will help us exploit the vast geographical advantage of our east coast and pave the way for the development of industry and commerce in the State.

ACCOUNTS 1995-96

The final accounts for 1995-96 reveal a revenue deficit of Rs.738.78 crores. After taking into account the transactions on capital as well as public accounts, the year closed with an overall surplus of Rs.232.27 crores.


Transactions as per the revised estimate of 1996-97 indicate a revenue deficit of Rs.576.09 crores as against the budgeted revenue deficit of Rs.604.55 crores. The overall transactions of the year are estimated to result in a net deficit of Rs.334.23 crores. After taking into account the opening cash balance of Rs.73.42 crores, the year end balance is estimated to be (-) Rs.260.81 crores.


During the financial year 1997-98, we have programmed for an expenditure of Rs.13,097.05 crores under Non-Plan and Rs.3,809.60 crores under State Plan. This will result in a revenue deficit of Rs.1,181.45 crores. After taking into account the overall transactions of the year, we will have a net deficit of Rs.301.27 crores. With the opening balance of (-) Rs.260.81 crores, the financial year is expected to end with a negative balance of Rs.562.08 crores.

With these words, I now commend the budget to the august House for approval.