Previous Budget Speeches


Madam Speaker and Honourable Members

1. I rise to present the Budget of the Government of Andhra Pradesh for the year 2001-2002. I wish to inform the august house that this Budget is the reflection of the commitments of our Government for realisation of the goals enshrined in Vision 2020.

2. My colleagues may kindly recall the reform process undertaken by our Government in 1995-96 with the publication of White Papers on various sectors. The reforms performance, so far, has shown reasonable level of success. Strengthening of self-help groups, launching of people-centred IT initiatives, private investments in the state, and revamping of public sector enterprises were some of the important outcomes.

3. In January 1999, Vision 2020: Swarna Andhra Pradesh was first published, providing a vision of opportunities and potential of the state to achieve prosperity and improve the quality of life for all people in the state. The fulfillment of the vision critically hinges on the reduction of direct economic intervention by government in the economy, and redesigning of public policies in order to be more effective in their implementation. While the ultimate goal of policy reform is to reduce poverty, improve people’s livelihood and strengthen economic performance, this needs to be done within a realistic fiscal framework that is consistent with resource constraints of the state. Apart from aiming for efficient and effective use of public resources, fiscal policies should aim to help mobilize non-public resources to contribute to key development goals. The fiscal reform strategy paper represents a first attempt to set out fiscal policy priorities to meet these objectives and to foster greater discussion of these issues both inside and outside the government. Through greater discussion and feedback, it is hoped that more informed and beneficial public policies can be formulated.

4. Once the strategies are finalized, the government would like to operationalise the Vision 2020 goals through medium term and annual performance targets with clear accountability for each department. Andhra Pradesh needs the assured supply of power, roads, irrigation and other physical infrastructure to be capable of achieving accelerated growth and vulnerable groups in society must also be endowed with the requisite skills and health needed to earn a living wage and fully participate in the economy. This requires investment in education and health services for all communities. Resources are also needed to improve the availability of potable water, sanitation, and to maintain law and order to provide a safe and secure environment for all, particularly the vulnerable groups in society such as women, scheduled tribes and castes, as well as other underprivileged groups.

5. Discussion of fiscal policy and expenditure priorities cannot be done in isolation from the serious resource constraints, which also face the state and limit the scope for growth in expenditures. Pressure on the state budget has intensified as non-discretionary expenditures (salaries, debt service payments, pensions) have grown, reducing resources for investment in key social services. It has become imperative to review the overall expenditure framework of government and identify corrective measures that will reverse recent trends while protecting priority developmental expenditures.

6. Currently, the budget exercise is effectively limited to one year and is not equipped to present the fiscal picture over the medium term. Most programmes are of a continuing nature with more or less firm commitments on the resources of the future and many projects take more than a year for completion with major share of expenditure taking place only towards the end of the project. There is hardly any scope left for new initiatives and there is a missing link between policy and the budget. Therefore, to provide the financing wherewithal for implementation of the Vision 2020 goals, Government has now proposed to put the annual budget preparation in multi-year context, by formulating a medium term rolling fiscal framework, updated annually and providing a guide for the annual budget preparation. The main purpose of this framework is to provide a realistic estimate of the margin of resources available to finance the new programmes and new policies and to prevent expenditure from exceeding available resources. Given that the present expenditure patterns have evolved over a period, any corrective measures will take time and need to be seen over a four to five year planning horizon.

7. While the MTFF sets out the fiscal measures, these are by themselves not enough. There is also an overarching need to improve the ways in which government goes about its business to improve the quality and efficiency of public service delivery mechanisms. There is no substitute for ‘getting more for less’ in the public sector. The effort to get a more effective government is the cornerstone of the overall strategy set out in all the strategy papers. Nowhere is this more vital than in the area of public expenditure management. As a part of wide ranging reform process, we have made serious attempts to demystify and simplify the budget through reclassification of demands, merging of several similar schemes into generic programs and integrating the budget Heads of Accounts to provide greater flexibility to the Heads of the Departments. The Budget was made available in an electronic form on the Internet as well as on the compact disc. Efforts were also made to improve financial management through better use of computerized data available from district and sub treasuries. We also recognized that there was a great need to regulate the expenditure under various deposit accounts and accordingly we issued orders to accord greater autonomy and fiscal discipline. We have also enhanced the ceilings on delegation of administrative and financial powers to the Secretaries, Heads of Departments and District Collectors.

8. The Zero-based Budgeting exercise in the beginning of this year has yielded very good results. First, it brought about a much greater sensitivity and understanding at the political as well as administrative levels, of the overall financial constraints and the need to conform to the fiscal discipline of containing expenditures within available resources. The departments carried out performance reviews of all the schemes and prioritised the schemes within the allocations indicated to them. The savings affected through this exercise enabled the government to meet its pending bills and commitments of nearly Rs. 1800 crores and yet provide adequate funds for the priority programs and schemes during the year. The departments were also given flexibility to utilise the savings towards those schemes that they felt were important with reference to their departmental objectives. In November, last year, we also authorized all the departments to mobilize their own resources through levy of user charges and plough them back for their operation and maintenance needs to improve the quality of their public services.

9. A number of steps were taken during the year 2000-01 to strengthen the expenditure management system at the treasury and sub-treasury level in the State mainly related to the application of Electronic Data Processing (EDP) technology to treasury operations, computerization of pay rolls, payment of pensions and other related payments through banks. At the State level also, the management information system has been strengthened. It is also proposed to provide APSWAN Connectivity and to modernise all the Sub-Treasuries and District Treasuries in a phased manner to have on line information system for better financial management. The Pay and Accounts Organisation dealing with Payment & Accounting functions of Irrigation Projects and Schemes has been computerised under Financial Accounting System (FACTS). This will facilitate in accounting Releases and Expenditure against Budget allocations and regulate the system of Letters of Credit (LOCs) issued from time to time. It is further under consideration to extend the Letters of Credit (LOC) System to all works under Panchayat Raj Engineering, Public Health Engineering and Forest Departments and to bring them under the Pay and Accounts Organisation. Government is also very keen to establish accountability and transparency by completing audit of accounts in fixed time frame for all the departments and the local bodies.


10. As per the advance estimates, the GSDP at constant prices for the year, 2000-01 is estimated at Rs.82,434 crores as against the Quick Estimates of Rs.78,394 crores for the year, 1999-2000. GSDP of the State has been growing at a rate of 5.23 % over the last five years. Twenty five growth engines have been identified by the Government including the nineteen growth engines already identified under Vision 2020 contributing about 75% to the GSDP to accelerate the growth rate for the next five years. Constant monitoring will be done to ensure that timely action is initiated to stimulate the growth process to achieve growth targets set under Vision 2020. The population growth rate will have to be reduced from the current level of 1.3% to 0.9 % per annum over the next five years, which will also contribute to the increase in per capita income, which is currently growing at a rate of about four per cent.

Revenue Performance

11. Andhra Pradesh total revenue receipts amounted to about 13 per cent of its GSDP over the last three years, except in 1998-99 when it fell to 11.72%. The total revenue receipts are likely to improve to 13.56% of GSDP in 2000-01 as per our revised estimates. For the next year, this percentage is likely to further improve to 13.79% of GSDP with total revenue receipts of Rs.21,045 crores excluding contra interest.

Declining Central Transfers

12. The share of Central transfers in the year 1995-96 in the total revenue receipts of the state stood at 5.19 percent of GSDP. The budget estimates for 2000-01 showed revenues from the center as anticipated before the Eleventh Finance Commission award was received. There is likely to be a shortfall of Rs. 738 crores in central revenues. This will bring down their share to 4.82% of GSDP. Consequently, this will bring down their share of State’s total revenue receipts from 40.46% in 1997-98 to 35.70% in the revised estimates of 2000-2001. State’s Own Revenue Performance

13. The State’s own revenue receipts were Rs. 5048 crores in 1995-96, which was 6.32% of GSDP. This became 7.82% in 1998-99. Revenue receipts have shown a good performance for the last two years with an average growth rate of 13.75%. In the current year, we anticipate to have revenue receipts of Rs. 11,922 crores amounting to 8.74% of GSDP. For the year 2001-02, we estimate Rs. 13,204 crores towards revenue receipts. Overall Budget Outlook for 2001-02

14. Madam Speaker, I want to take this opportunity to highlight an important aspect of our annual budgeting exercise that brings out the stark reality of our fiscal constraints. Our own tax revenues for 2001-02 are estimated at Rs. 11,743 crores. Most of this amount will be consumed by the salaries and pensions, which together account for Rs. 10,503 crores. Our Non-Tax revenues will bring in Rs. 1,461 crores. This will just be sufficient to meet the Non-Plan Non-salary O&M expenditure of Rs. 1,450 crores. The Central Tax devolution of Rs. 4,417 crores will go towards Interest Payments of Rs. 5,067 crores. Other Central grants amounting to Rs. 2,959 crores will be used up by our grants and subsidy for rice, and other welfare programs for the weaker sections and minorities, and maintenance expenditure totaling Rs. 2,606 crores. This leaves us with no other alternative but to borrow Rs. 8,429 crores from the Central government, other financial institutions and the market to finance our Plan outlay of Rs. 8,991 crores. This includes, among other schemes, capital expenditure of Rs. 3,802 crores and a cash subsidy of Rs. 1626 crores for the power sector restructuring.


a. The Annual Plan for the year 2001-2002 has been programmed with an outlay of Rs.8,991.02 crores as against Rs. 822`8.12 crores for 2000-2001 which amounts to an increase of 9.27%. The revised estimates for 2000-2001 for the Annual Plan are now Rs.7,692.64 crores. Against the revised estimates, increase in the next year’s Plan outlay will be 16.88 per cent.

16. The infrastructure sectors viz., Energy, Irrigation & Transport are given priority in the Annual Plan of 2001-2002. These sectors together account for about 62 per cent of the total plan outlay of the State. Individually Energy Sector is provided with Rs.2,330.32 crores, Irrigation sector with Rs.1,732.56 crores and Transport sector with Rs.1,501.40 crores which account for 25.92 per cent, 19.27 per cent and 16.70 per cent respectively.

17. In the Social Services Sector, Health Sector is provided with the largest allocation of Rs.362.84 crores, which is 18.84 per cent of the outlay of the Social Services Sector. Rural Water Supply comes next in priority, which accounts for 16.15 per cent of the outlay under Social Services Sector.


18. The average rainfall received in the State during the South-West monsoon period, from June to September 2000 was 759 m.m. as against the normal rainfall of 624 m.m. the excess being 22 percent. The average rainfall received during the North-East monsoon period was 91 m.m. as against the normal rainfall of 224.m.m, the deficit being 59 percent. During the North-East monsoon period, the condition of the standing crops was not satisfactory due to long dry spells in almost all parts of the State.

19. The State experienced heavy rains and floods in Godavari river because of which 26.12 lakh people belonging to 4,522 villages and towns in 559 Mandals of 17 districts were affected. The State Government released Rs.117.50 crores for immediate relief and restoration of works in the affected districts. An amount of Rs.361.42 crores was released towards relief during the current financial year against the budget provision of Rs.198.05 crores. We are also deliberating for a long-term policy framework with an appropriate mitigation strategy to meet major calamities like the Orissa cyclone and Gujarat earthquake.

20. We are deeply concerned about the loss of life and property in Gujarat and we share our deep-felt sorrows with the earthquake victims. We have sent Rs. 5 crores along with the required relief material under the supervision of senior State officials.

21. Apathbandhu” scheme has been renewed and extended to October 2001 by paying a premium of Rs.8 crores which would give insurance coverage of Rs.1.00 lakh to each adult in the age group of 18-69 years. Likewise, “Gruharaksha” scheme has also been renewed further by paying a premium of Rs.4.00 crores which would cover the loss due to damage to houses under natural calamities.


22. South-West monsoon started off on a positive note during the year but ended in a disappointing manner. The heavy rains during August, 2000 affected the green gram, black gram and sesamum crops that came to harvest during the month. The dry spell which started during September, continued till date without a significant break which reveals that the North-East monsoon had failed in the State. The crops in the districts of Adilabad, Vizianagaram, Srikaulam, Chittoor and Nellore have suffered due to continuous and prolonged dry spells at various periods.

23. The area coverage under foodgrains during Kharif 2000, was normal. Rice crop was sown in an extent of 28.68 lakh hactares. There was significant increase in the areas sown under Maize (4.18 lakh ha.), red gram (4.45 lakh ha) and Castor (3.67 lakh ha.) during Kharif,2000. Similarly, area under Bengal gram and Blackgram has increased during Rabi. Foodgrain production during Kharif,2000, is estimated to cross a record of 100.00 lakh tonnes against 89.88 lakh tonnes of previous year and 78.04 lakh tonnes of normal. Rice production is expected to touch a record of 80 lakh tonnes. Groundnut production is estimated at l5.62 lakh tonnes against the normal of 14.14 lakh tonnes and previous years 6.81 lakh tonnes, despite the crop getting affected by Bud Necrosis during July and August,2000.

24. Kharif Cotton crop however suffered badly in Adilabad district. Similarly, almost all the crops suffered adversely in Srikakulam and Vizianagaram districts during Kharif. Due to continuous dry spell since September Maghi Jowar and Sesamum crops were affected in Adilabad district and Horsegram suffered in Vizianagaram district. A campaign was launched to promote I.D.crops in place of paddy under wells during Rabi, for optimal use of water and energy.

25. To assist the farmers in getting the Minimum Support Price, our government launched a multi-pronged action by ensuring prompt and steady procurement of paddy, maize and groundnut by opening various purchase centers. So far, a quantity of 91,964 tonnes of Paddy, 39,342 tonnes of Maize and 20,044 tonnes of Groundnut 4,023 tonnes of sunflower, 15,983 tonnes of copra and 15,000 tonnes of soyabean have been purchased from the farmers at Minimum Support Price. This has reduced and mitigated the hardship caused to the farmers. Besides, the millers were also advised to desist from purchasing paddy at lesser rate than the minimum support price from the farmers and deliver resultant rice to the Food Corporation of India. To facilitate smooth procurement of levy rice by the Food Corporation of India, substantial quantity of boiled rice and wheat was evacuated from the godowns in Andhra Pradesh to other States. The Government is committed to the welfare of the farmers and consumers and towards this end, has taken all necessary steps.

26. A budget provision of Rs. 372.14 crores is made during 2001-2002 under Agriculture.


27. Andhra Pradesh being endowed with varied agro climatic conditions offer many opportunities for the cultivation of Horticulture Crops. About l3.49 lakh hectares is under various horticulture crops with an estimated production of 97.84 lakh M.Ts. and 1052 million coconuts.

28. A Bio-Technology Centre at Hyderebad is set up with an amount of Rs.221 lakhs to produce annually one million tissue culture plants of Banana, Turmeric and Chrysanthemum. The production has started. A similar centre is being set up at Eluru with an amount of Rs.250 lakhs.

29. A Horticulture Staff Training Institute is also being set up at Hyderabad with a total cost of Rs.229.43 lakhs to impart in-service training in modern technologies.

30. To safeguard the interest of the Oilpalm growers in the State, Market Intervention Scheme was introduced for price stabilization of oilpalm Fresh Fruit Bunches (FFBs). A quantity of 96,450 M.Ts. of FFBs was procured under this scheme till December,2000.

31. Rs.14.51 crores were spent during 1999-2000 in Horticulture Sector and this year expenditure is likely to be 48.34 crores. A budget provision of Rs. 70.56 crores is made during 2001-2002.

Animal Husbandry

32. Andhra Pradesh is the Country’s largest egg and poultry producer, contributing to about a third of country’s poultry production, with the growth rate of 6% for the layers and 10% for the broilers. We are the 7th largest milk producer in the country, producing about 4.7 million metric tonnes of milk per year, growing at 5-6% per annum, which is one of our identified growth engines under Vision 2020.

33. 205 mobile departmental artificial insemination centres and 565 Gopal Mitra Centres are established under A.P. Livestock Development Project. 150 integrated Livestock Development Centres under JK Trust Gram Vikas Yojana have been started in Chittoor and Anantapur district with an outlay of Rs.10.92 crores. 4.26 lakhs veterinary camps have been conducted during Janmabhoomi at a cost of Rs.35.50 crores.

34. Rs.146.71 crores were spent during 1999-2000 in Animal Husbandry Sector and this year expenditure is likely to be Rs. 156.36 crores. A budget provision of Rs.160.70 crores is made during 2001-2002.


35. Fisheries Sector is identified as one of the growth engines in VISION 2020 and envisaged to produce over 10 lakh tonnes per annum. The total fish/prawn production from Inland and Marine resources has increased from 4.11 lakh tonnes to 5.46 lakh tonnes. It is now envisaged that target of 10 lakh tonnes of fish production anticipated by 2020 will be achieved by 2010 itself, based on the action plan and trends of fish production. The annual Fish Seed production from Departmental Fish Seed Farms has increased from 988 lakhs to 3100 lakhs.

36. The ex-gratia payment under Group Accident Insurance Scheme for fishermen has been enhanced from Rs.35,000/- to Rs.50,000/-. Around 10,000 houses are under construction exclusively for fishermen and unit cost of each house is also enhanced from Rs.20,000 to Rs.40,000. 132 fisher-women cooperative societies have been formed to help the fisher-women in marketing of fish and fish products.

37. The construction of Machilipatnam Fishing Harbour at a cost of Rs.40 lakhs to provide berthing facilities to 350 mechanised fishing vessels is under progress. 12 shore communication stations are also established all along the coast to get messages on weather warnings and availability of fish in different fishing grounds.

38. Rs.16.77 crores were spent during 1999-2000 in Fisheries Sector and this year expenditure is likely to be Rs. 17.17 crores. A budget provision of Rs. 21.70 crores is made during 2001-2002.

Marketing and Cooperation

39. Several new schemes have been added to the existing ones at level of Agricultural Market Committees to serve the farming community. These include village link roads, farmers training centres, cold-storage units, watershed demonstration units, and sale of seeds, pesticides, and fertilizers and computerisation of Agricultural Market Committees. Rythu Bandhu Pathakam has prevented farmers from resorting to distress sales. Rythu Bazars have enabled direct sale of vegetables and fruits by farmers. Construction of 34 Pucca Rythu Bazars has been approved.

40. The Cooperative Department through catalytic interventions has been effectively reaching almost all the sectors of development enabling the members of Cooperatives to improve the quality of services and participate in the overall development. Government is making all efforts to promote self-reliant co-operatives and register them under the Mutually Aided Cooperative Societies Act.


41. Development and strengthening of irrigation infrastructure in the State will continue to receive high priority of the Government. While new investments will be focussed in the backward and drought-prone areas of the State, irrigation under the existing projects will be consolidated by completing the minimum rehabilitation program through Farmers’ Organizations. Water Users Associations will be strengthened further and given the responsibility of operation and maintenance of all the irrigation systems and of cost-recovery within their respective areas of operation.

42. For a fuller utilization of the waters of Godavari river, the Godavari Water Utilization Authority has identified Ichampally, Yellampally, Dummagudem and Polavaram projects for priority implementation. Government will strive to immediately resolve outstanding inter-State and environment related issues pertaining to these projects. Already the Union Government has been requested to declare Ichampally and Polavaram projects as ‘National Projects’ to facilitate early clearance and requisite funding. On the organization side, the State Government has already created new organizations under a Chief Engineer exclusively for utilization of Godavari waters and for implementation of Sriramsagar Stage-II and the Flood Flow Canal projects. Efforts are also being made to obtain funding for feasible medium irrigation schemes in Godavari basin from Japan Bank for International Cooperation.

43. In case of new projects planned to utilise the waters of river Krishna, efforts will be made to seek their clearance and requisite funding by taking up their execution in phases, initially within the allocated water. These include Handri-Neeva, Galeru Nagari, Nettampadu, Kalwakurthy and Veligonda projects. Government will also strive to complete Telugu Ganga and A. Madhava Reddy Canal Projects at the earliest.

44. All ongoing irrigation projects are planned to be completed in a time-bound manner by fully utilizing the development assistance available from the World Bank, Japan Bank of International Cooperation, NABARD and from Government of India under the Accelerated Irrigation Benefit Program. Important ongoing projects planned for early completion are Srisailam Right Branch Canal, Kurnool Cuddapah Canal Modernization, Somasila, Vamsadhara Stage-II and the Priyadarsini Jurala Project. Several new projects have also been identified to fully utilize available water resources in the State. These include Yeleru Lift Irrigation Scheme, Nizamsagar Lift Irrigation Scheme, Peddagadda, Thotapally, Tarakarama Lift Irrigation Scheme in Vizianagaram, Somasila-Swarnamukhi Link Canal,Swarnamukhi barrage and Guru Raghavendra Swamy Lift Irrigation Scheme in Rayalaseema region. Efforts will also be made to secure inter-State agreement in respect of Lendi, Penganga, Janjhavathi, Vamsadhara Stage-II and Bahuda projects.

45. A major program for the rehabilitation of over 5000 old minor irrigation schemes will be taken up this year by utilizing the assistance of World Bank under the AP Economic Restructuring Project (APERP). All flood protection works including construction of flood banks on the rivers Krishna and Godavari will be completed during the year to protect farmers in delta areas from recurring losses resulting from floods and cyclone.

46. We spent an amount of Rs.2,402.36 crores during 1999-2000 in Irrigation Sector. This year we are likely to incur an expenditure of Rs.3,029 crroes. We have made a budget provision of Rs. 3,294 crores for the year 2001-2002.

Forestry & Environment Protection

47. A massive programme for rejuvenation and rehabilitation of forests has been taken up through peoples’ participation by forming Vana Samrakshana Samithis (VSS), under the Joint Forest Management (JFM) Programme. So far, 6706 VSS, involving 13.05 lakhs beneficiaries are protecting and managing 16.79 lakhs ha. of forest area. So far, 6.8 lakhs ha. of forest area has been treated. The VSS members are entitled for 100% usufructory rights. Rural women are actively participating in this programme.

48. A five year perspective Forestry action plan for Swarna Andhra Pradesh has been formulated with a financial outlay of Rs. 1645.95 crores with an emphasis on the Bio-diversity conservation, Research and Technology, Clean and Green, Forest Protection and Human Resource Development. In order to Green the State, 22 crore seedlings are being raised during 2000-2001.

49. The conservation of Wild Life and rich bio-diversity has been given due importance. A Botanical garden and a night safari park are being developed in Kothaguda Forest Block in Rangareddy District.

50. The Abnus (Beedi) leaf collection is a boon in the rural Telangana areas. This activity is creating 80 lakh mandays of employment during the lean summer months and another 500 lakhs mandays in the Beedi Manufacturing Units.

51. A.P.Forest Development Corporation manages 4,000 ha.. of coffee plantations and 81,000 ha. Of Eucalyptus, Bamboo and Cashew Plantations in the agency areas. Around 8450 Ha. area has been treated under SRSP and SRBC projects with an outlay of Rs.565 lakhs.

52. A.P.Pollution Control Board has achieved success in the areas of effluent quality control among bulk drug industries, improved industrial (Hazardous) Solid Waste Management Practices and is aiming at adoption of Waste Minimisation/cleaner production among the Chemical Industries.


53. Our Government has prepared a very clear long-term strategy for poverty alleviation in our Vision 2020 document. It provides for an integrated approach at poverty reduction both in rural and urban areas highlighting economic and social dimensions of poverty. We have also released a Strategy Paper on Eradication of Rural Poverty where we have made an attempt to sketch out a profile on rural poverty in the State based on income and social indicators. We are also seeking public opinion to strengthen the role of agricultural sector, improvement of public services and social mobilisation to work out an elaborate framework for poverty reduction. Accelerated development of backward areas has also been our main concern and emphasis will also be put on creation of infrastructure and other facilities in such areas. This will not only generate opportunities for employment generation but also result in poverty reduction.

Rural Development

54. Government has launched A.P. District Poverty Initiatives Project (AP DPIP) with a project cost of Rs.584.60 crores covering 180 backward mandals in 6 districts of Adilabad, Mahaboobnagar, Anantapur, Chittoor, Srikakulam and Vizianagaram.

55. A project outline for Andhra Pradesh Poverty Elimination Project aimed at reducing poverty in all the rural backward mandals of the State through a strategy of social mobilisation and empowerment of the poor has been proposed for World Bank assistance with an outlay of Rs.2231.54 crores over a period of five years.

56. State Government has approached NABARD for extending support for watershed development to achieve the mission of treating all dry and degraded areas in the State as contemplated under 10 year Action Plan launched during 1997. NABARD has already sanctioned 1171 projects under RIDF for Rs.112.47 crores in 17 districts.

57. Neeru-Meeru programme was launched by the Government with the objective of conservation of water through rainwater harvesting. Under Phase-I of Neeru-Meeru, 801.42 lakhs cum. of works have been executed with an expenditure of Rs. 190.17 crores. Government has decided to take up Neeru-Meeru on a continuous basis and Phase-II has started on 1st November, 2000. It is proposed to execute 893.80 cum. of works at an estimated cost of Rs.239.05 crores. In addition to tapping the normal programme funds of various departments concerned with water conservation, a separate provision of Rs. 50 crores has been made under this scheme for the year 2001-2002.

58. In continuation of the policy of supporting women self help groups (DWCRA) for socio economic development of rural areas, State Government has released Rs.44 crores during Mahila and Rythu Janmabhoomi during 2000-2001.

59. Government is acting as a facilitator for providing market support to the women self help groups. Corporate houses like Hindustan Lever Ltd., are already working with the groups in Nalgonda district. Efforts are being made to mobilize more and more support from the corporate sector to provide market support, skill upgradation, quality improvement and maintenance, packaging, networking etc., to women self help groups. The Hon’ble Chief Minister has also appealed to the gathering of top private companies during the recently concluded Partnership Summit to establish linkages with the women self help groups.

Rural Water Supply

60. The State Government attaches highest importance to the provision of safe drinking water. So far about 64% of the State’s population has been provided safe drinking water. While a substantial distance has been covered, there is still a long journey ahead. It is the endeavor of the State Government to cover all these villages, which are so far uncovered within the shortest possible time.

61. Rs.1,266.55 crores were spent during 1999-2000 in Rural Development including Panchayati Raj Sector and this year expenditure is likely to be Rs. 1,984.45 crores. A budget provision of Rs. 2,313.62 crores is made during 2001-2002.

Urban Development

62. Supply of safe drinking water in adequate quantities is one of the biggest challenges for the Municipalities. Apart from fourteen schemes taken up under Plan, twelve Schemes with an outlay of Rs.14.76 Crores have been taken up under HUDCO Phase I. Twenty four water supply improvement schemes under HUDCO Phase II with an estimated cost of Rs.358.80 crores are under various stages of completion. Integrated Low Cost Sanitation Scheme has been taken up in all the 113 local bodies. Construction of 5.71 lakh new latrines with an allocation of Rs.239.27 crores is under progress.

63. We are providing gainful employment to the urban unemployed through self-employment ventures under SJSRY and DWCUA. Apart from providing wage employment to the urban poor, under Urban Wage Employment Programme useful public assets are also being created.

64. Action plans in 32 Municipalities are being prepared for poverty reduction and to deliver the services to the urban poor under “A.P. Urban Services for Poor Project” (APUSP) with an outlay of Rs. 745 crores in partnership with Department For International Development (DFID).

65. Conservation of natural environment is a pre-requisite for healthy city life. During the rainy season, massive tree plantation programme was undertaken by Hyderabad Urban Development Authority and Municipal Corporation of Hyderabad. A large number of rain water harvesting structures were also constructed by the Local Urban Bodies. Impressed by the performance under Green Belt Programme undertaken by HUDA, a much bigger Green Hyderabad Project has been agreed to by Netherlands Government with a financial assistance of Rs.98.24 crores.

66. To provide a clean, efficient and fast transport to the commuters of Hyderabad, Government of Andhra Pradesh jointly with Indian Railways, is implementing Hyderabad Multi Model Transportation System. Under the first phase of this programme, on Secunderabad to Lingampally and Secunderabad to Falaknuma sectors, a number of fast commuter trains are being introduced. For signaling line capacity improvement, South Central Railways and Government of Andhra Pradesh is jointly spending Rs.69 crores. The expenditure is shared equally. For phase II of the programme, under which the services will be extended to Shamshabad International Airport, Hi-tech City and Bolaram etc., a joint venture company is being set up.

67. For augmentation of Water Supply from Singoor Project to the twin cities and surrounding municipalities, a project with an estimated cost of Rs.149.80 crores has been taken up with HUDCO assistance. Our efforts will continue to further augment water supply to Twin Cities.

68. Against an expenditure of Rs. 89.64 crores during 1999-2000, we are likely to incur an expenditure of Rs.244.23 crores during this year under Urban Development. A budget provision of Rs. 642.50 crores is made for the year 2001-2002.


69. Index of industrial production has been on the rise during the year. In order to have greater links of State industries to the global market, State Government in collaboration with the Confederation of Indian Industry (CII) has organized ‘PARTNERSHIP SUMMIT – 2001’ in January, 2001 at Hyderabad. 27 countries have participated in the Summit and l2 MOUs with a total investment of Rs.26,065 crores have been signed for the establishment of various projects in Andhra Pradesh.

70. The State has received proposals from 518 Foreign Direct Investors with an investment of Rs.10578.70 crores so far. 142 FDI Projects have gone into production with an investment of Rs.1752.80 crores. During current year, the State has received 56 FDI approvals with a foreign equity of Rs.615.61 crores. The State Government is keen on providing infrastructure facilities for attracting more FDIs in the State. In order to further smoothen the process of project approvals, the Government is establishing an Electronic Clearance Facility. We have also appointed Escort Executives for these important projects to facilitate quick implementation.

71. During the year, State received 91 new proposals for setting up of Industrial Units (Large and Medium scale) involving an investment of Rs.641.l2 crores with an employment potential of 11,276 persons.

72. New Industrial Policy, 2000-05 has been announced with greater emphasis on provision of quality infrastructure coupled with a policy for gradual phasing out of incentives and creating right Industrial environment in the State to make the State of Andhra Pradesh an attractive destination for both foreign and domestic investors.

Public Enterprises

73. Our State has 40 Public Sector Enterprises employing 3.50 lakh people and having over Rs.4,444 crores paid up share capital. There are also 60 Cooperatives in which the State Government has the dominant share holding. These include 18 Sugar Mills and 12 Spinning Mills with 29,000 people on their roll with over Rs.1,000 crores paid-up capital. Most of these enterprises have accumulated losses over the years. A strategy paper on public sector reforms and privatisation is also released to solicit public opinion on the future course of action for these ailing units. Government has also formulated VRS programme and so far 12,859 employees have availed VRS with an amount of Rs.151.86 crores. Apart from VRS, Government is also emphasising on counselling, retraining and re-deployment programmes. Government is also seriously considering a specialised institution for monitoring and evaluation of privatisation process.

Mines & Geology

74. To optimise the production and development of mineral based industry and to augment the revenues, our Government has brought operational changes like speedy processing and disposal of applications in a fixed time-frame and strengthening the gross-root level machinery. We have announced Mineral Dealers Rules 2000 and new Granite policy. We are now interacting with the State and Central geological agencies for exploration of quartz, feldspar, gold, diamond, limestone, dolomite and concealed deposits in the State. We have signed 4 MoUs in mining sector during the recent Partnership Summit.


75. Our State has recorded an average recovery of 10.09% as compared to 9.70% during 1999-2000. Area under Cane has also risen to 8.33 lakh hectares with a corresponding increase in yield from 76 tonnes to 79 tonnes per hectare.

Handlooms & Textiles

76. Apart from the continuing schemes like Project Package Scheme, Thrift Fund, Work shed-cum-Housing Scheme, Insurance and Health Package Scheme etc., a comprehensive scheme named “Dheenadayal Hathkargha Protsahan Yojana” has been formulated by Government of India for the Welfare of Handloom Weavers. To promote the Garment Industry in the State, a big thrust to the Apparel and Export Parks has been given. The government intends to establish some more Apparel Parks in addition to the Apparel Export Park coming up in Hyderabad at Gundla Pochampally. Considerable exports are envisaged from the Textiles Sector.


77. We believe in investing in human capital. Therefore, our Government has always focussed on improving the quality of human resources through encouraging investments in the area of Health and Education as well as welfare of the weaker sections.


78. The Government has initiated a number of measures to cope with the increasing demands on the health systems and to expand comprehensive and quality health care for the people of the State. Government is investing Rs.328 crores under APERP to ensure that every Primary Health Centre has its own building and that all the centers are manned with the required staff and supported with adequate equipments, drugs and supplies. Our Government has paid special attention to the needs of tribal areas. In order to improve the delivery of health care among the tribal population, 8,500 community health workers have been trained. In secondary sector, 3,500 beds have been added to the existing bed strength of 9,960. The Government has sanctioned a new medical college in the Government Sector at Anantapur. We have issued orders for establishing 9 Medical Colleges and 9 Dental Colleges in the private sector, based upon the recommendations of Justice Maruthi Committee.

79. The increasing incidence of HIV in the State is a matter of great concern. A massive prevention and control initiative is being implemented through the second phase of the AIDS Control Project at a total cost of Rs.187 crores. We are also making serious efforts to bring down communicable diseases to the by mobilising field level health functionaries, NGOs, self-help groups and community. Government has also decided to appoint two high level committees to suggest measures to control communicable diseases. Detailed operational manuals on Malaria, Japanese Encephalitis and Gastroenteritis are under preparation for the benefits of field level functionaries. State and District level action plans are also being drawn up to tackle diseases like Tuberculosis, Blindness, Leprosy and Filaria. Necessary training programmes are also being planned for all levels for prevention and control of communicable diseases.

80. Government accords high priority to the Family Welfare Programme. During the current year, we are set to cover 8 lakhs eligible couples with permanent contraceptive methods. We have also been pioneers in implementing a health scheme “Arogya Raksha” for eligible couples below the poverty line who adopt family planning after one or two children. The Govt, also started “Sukhibhava”, a scheme to increase institutional deliveries to safeguard the health and life of the mother and child. We have also established Urban Health Posts in 74 Municipalities for delivery of health and family welfare services in the urban slums.

81. An amount of Rs.1,165.16 crores was spent during 1999-2000 in Health Sector and an expenditure of Rs.1,295.26 crores is likely to be incurred during this year. A total budget provision of Rs.1,471.62 crores is made for the year 2001-2002.


82. The Government is committed to accelerate the pace of universalisation of elementary education and adult literacy and considers them to be central to the architecture of the state’s developmental strategy.

83. Opening of primary schools in school-less habitations, upgradation of primary schools to upper primary, providing full complement of staff and essential infrastructure to high schools and strengthening residential school system have been the main components of the action plan. The endeavour of State Government is to enroll all out-of-school children and provide a congenial learning environment in schools for their all-round development. The learning needs of girls, disadvantaged groups and first generation learners are being specially addressed through bridge courses and alternative schooling. The Government is embarking on a series of reforms in curriculum, examinations and governance to provide quality education to all children in the school-going age.

84. Imparting basic literacy skills to adult illiterates has been another important programme. Starting with a massive campaign enrolling over 40 lakh illiterates in the programme called “Akshara Sankranthi”, State Government is planning to sustain the momentum over the next four years through concerted programme of continuing education.

85. Our State proposes to harness the power of modern technology for reaching out to unreached areas and deliver quality instruction in schools and teacher training institutions. Distance education and computer-aided education would supplement the traditional modes of learning in the classrooms of tomorrow.

86. Our Government attaches lot of importance to the development of Technical Education so that the availability of the technically qualified manpower would increase. There are 18,041 seats in I.T. related subjects out of 30,716 seats in various subjects in various Engineering Colleges. It is worth noting that 5,420 additional seats in IT – related subjects were sanctioned recently for the academic year 2000-2001 to cater to the growing demand for I.T. professionals.

87. With a view to further develop facilities for engineering education in the interior areas and also growth centres of the State, the Government notified 46 places for opening of new engineering colleges during the years 2001-2002 and 2002-2003. In order to use the latest technology in the teaching and learning process and also to partly meet the problem of scarcity of teachers, the engineering colleges in the State would be provided with electronic class rooms and video conferencing facility.

88. Under National Child Labour Project, 62,050 children working in hazardous conditions are covered in 1,044 schools for their rehabilitation. Government has also formed an inter-governmental committee on child labour to coordinate with neighbouring States to cover the child labour in border areas. Two thousand four hundred girl child labourers have been admitted into Telugu Bala Mahila Pragati Pranganam.

89. An amount of Rs.3,238.85 crores was spent during 1999-2000 under Education Sector and the expenditure likely to be incurred is Rs.3,619.52 crores during this year. A budget provision of Rs.4,084.16 crores is made for the year 2001-2002.


90. The Government continued all the programmes relating to the welfare of Scheduled Castes, Scheduled Tribes, Backward Classes, Minorities and other disadvantaged groups. The programmes and policies of the Government are designed for the overall development of vulnerable groups in the society.

Social Welfare

91. Our Government is implementing various programmes for welfare of the Schedule Castes like land purchase, house sites, irrigation, education and pensions etc. Our Government is maintaining 2210 hostels covering 2.47 lakhs students with an expenditure of Rs. 122 crores. Rs.100 crores is spent for providing post-metric scholarships for Intermediate, Degree and Professional Courses. Andhra Pradesh Social Welfare Residential Educational Society has set up 218 residential schools and Junior Colleges to provide quality education to 78,000 students. Mess charges in Social Welfare hostels have also been enhanced from Rs.230/- p.m. to Rs.270/- p.m. to the boarders up to 7th Class and from Rs.270/- to Rs.330/- p.m. from 8th to 10th class. Cosmetic charges have also been increased. 1259 students whose parents were engaged in unclean occupations have been provided with scholarships and educational facilities and 2444 benefited under the Bright Boys Scheme during the year. Since inception, A.P. State Scheduled Castes Cooperative Finance Corporation has so far assisted 32 lakhs S.C. beneficiaries with an outlay of Rs.1900 crores.

92. An expenditure of Rs. 362.73 crores was incurred for the welfare of the Scheduled Castes during 1999-2000. We are likely to spend an amount of Rs. 443.38 crores during this year. A budget provision of Rs. 597.88 crores is proposed for the year 2000-2001.

Tribal Welfare

93. Andhra Pradesh has 6% tribal population. Our Government is taking all steps to improve the socio-economic conditions of the tribal population living all over the state and striving hard to improve the infrastructure and provide the basic minimum needs to the tribals living in the interior forest areas of the state.

94. Government of A.P. is giving paramount importance to spread of education and improve literacy in the tribal areas of the State. Tribal Welfare Department is maintaining 510 Ashram Schools, 505 Hostels, 4957 GVVK schools to take care of educational requirements in the tribal areas. Govt. is also providing special coaching to tribal students for various recruitments through PETs(Pre Examination Training Centres). Apart from this, we have started Gurukulam with 63 institutions like Residential Schools, Residential Junior Colleges, Residential ITI s & Polytechnic to provide quality education. We are the first State to start Tribal Health Service to ensure regular attendance of doctors in PHCs in the interior scheduled areas of the State. In order to improve the economic conditions of the Tribals, the Tribal Welfare Department is implementing irrigation schemes like check dams, tanks, lift irrigation schemes, horticulture, agriculture, animal husbandry, small business ventures through ITDAs. Girijan Cooperative Corporation has been set up to provide essential commodities, daily requirements to the tribal living in the remotest corner of the Agency areas, purchase of minor forest produce at reasonable prices and also provides short term agricultural loans to the tribals. Under Externally Aided Projects, our State is implementing IFAD Phase II programme in the ITDAs of Srisailam, Utnoor, Eturunagaram, Bhadrachalam and KR Puram for improving the food security and community participation. In order to improve participation of the tribal people in the Govt.sponsored works, 9767 VTDAs have been established at the habitation level.

95. An expenditure of Rs. 189.06 crores was incurred in this sector for the welfare of the Tribals during 1999-2000. We are likely to spend an amount of Rs. 297.24 crores during this year. A budget provision of Rs.320.86 crores is proposed for the year 2001-2002.

Backward Classes Welfare

96. Government has been making concerted efforts to provide education, training and development programmes for the welfare of the people of Backward Classes. The major schemes are: Hostels to Pre-matric students; Scholarships to Post-matric students; Residential Schools; Training for the aspirants of All India Services through Study Circles; Short Term Training in Computer Application and Human Resource Development.

97. Apart from the normal programmes, a special scheme called “Swarnima” exclusively for women is being implemented with term loan assistance. The unique feature of this scheme lies in the women being able to get better opportunities for development and growth. Adarana programme aims at empowering of B.C. artisans in the State by providing modern tools to the beneficiaries. This scheme will be continued during 2001-2002 with suitable modifications. A.P. Washermen Co-operative Societies Federation has sanctioned loans to an extent of Rs.500.74 lakhs to 1495 Primary Washermen Co-operative Societies in the State benefiting 52,062 Rajaka families. A.P. Nayee Brahmin Co-operative Societies Federation provides certain facilities to the individuals belonging to Nayee Brahmin Community, who are pursuing their traditional occupation in the State.

98. We are likely to spend an amount of Rs. 211.40 crores during this year and a budget provision of Rs292.75 crores is proposed for the year 2001-2002 for the welfare of the Backward Classes.

Minorities Welfare

99. Government is giving special attention to the welfare of Minorities and implementing various schemes for their socio-economic, educational, cultural, promotion and development of Urdu Language. Women belonging to minority groups have also been given special attention. Computer Education has also been provided to the students belonging to Minorities. Govt. of AP is constructing a Haj House to provide facilities to the Haj pilgrims. The construction work is in progress.

100. We are likely to spend an amount of Rs. 27.24 crores during this year and a budget provision of Rs.34.40 crores is proposed for the year 2001-2002 for the welfare of Minorities.

Women Development & Child Welfare

101. Government has sanctioned 8,816 Anganwadi buildings and has provided safe water to the ICDS beneficiaries by completing 4,151 Hand Pumps. 50,455 Mothers’ Committees have been formed. A pilot project for prevention and control of iron deficiency has been taken up in Mahboobnagar District at an estimated cost of Rs.30.10 lakhs. 1955 women have been trained in various trades.

102. We are likely to spend an amount of Rs. 194.36 crores during this year and a budget provision of Rs. 313.22 crores is proposed for the year 2001-2002 for the welfare of Women and Children.

Disabled Welfare

103. We have spent an amount of Rs.4.50 crores during 14th round of Janmabhoomi towards aids and appliances, unemployment allowance, self-employment schemes, marriage incentive award and scholarships under “CHEYUTHA” programme for the disabled welfare. Diet charges have also been enhanced from Rs.240 to Rs.350 per month.

Labour welfare

104. Labour Department has been entrusted with welfare of the labour both industrial and non-industrial workers by way of enforcement of more than 20 Acts and Welfare Schemes intended for their betterment and upliftment. Due to effective implementation, the industrial climate in the State has been peaceful and conducive for industrial investments. This department ensures safety, health and welfare of 8.66 lakh workers employed in 34,376 factories.

Public Distribution System

105. Food security and access to food at affordable price is one of the basic objectives of the Government. Government of Andhra Pradesh runs one of the most effective Public Distribution System, to ensure food security to the poor, besides acting as anti-inflationary and price stabilization instrument. On an average 2,03,700 tonnes of foodgrains, 31,000 tonnes of sugar and 69,633 KLs of kerosene are being distributed every month through PDS by 40,555 fair price shops. We have also introduced coupon system to ensure effective check over misuse of ration cards.


106. Government has been implementing “Deepam Scheme” in Rural and Urban areas with a view to relieve the women from dredgery of cooking with firewood, protect forests and also to ensure unpolluted environment. This scheme is well appreciated not only by the people of Andhra Pradesh but also countrywide. So far, 9.26 lakhs LPG connections have been distributed under this Scheme. A provision of Rs.40 crores is made in the Budget for the year 2001-2002.


107. Government is committed for effective implementation of the Weaker Sections Housing Programme. Andhra Pradesh stands first in the country in providing permanent shelter to the poor. By December, 2000 the state has facilitated construction of 37,68,485 houses in the Rural and Urban areas. For the year 2000-2001, Government has sanctioned five lakhs houses in rural areas and two lakhs houses in urban areas with a project outlay of Rs.925.89 crores. The same level of activity is proposed to be maintained in 2001-2002 also. A new programme called Prime Minister Gramodya Yojana (PMGY) has also been proposed for implementation. For monitoring the programme, the project period concept has been introduced with a view to complete construction of houses in 90 days. The Hon’ble Members are kindly aware that, to compensate partly the inflationary effect in the cost of inputs, the Government has revised the unit cost of Rural & Urban housing twice during the last 5 years. As the Government is committed to provide healthy habitation to the people, the construction of toilets is made compulsory in Housing Programme. The Housing Corporation is popularizing various kinds of building components through its building centers spread over the State.

108. We are likely to spend an amount of Rs. 225.25 crores during this year and a budget provision of Rs.523.57 crores is proposed for the year 2001-2002.


109. Janmabhoomi is a people centered development process launched in the State in January,1997. The goal is an enhanced quality of life for every man, woman and child in the State through people’s participation in a transparent and accountable manner. So far 14 rounds of Janmabhoomi have been held in the State. Execution of community works, redressal of grievances of the people, conduct of Special Veterinary Camps, Special Health Camps, Cheyutha (Disabled Welfare), sensitizing the local community to the benefits of environment conservation, enrolment and retention of children in the schools have been some of the major themes of Janmabhoomi.

110. Since inception, 1.18 lakh community works have been grounded costing Rs.1841 crore, out of which 1.08 lakh works have been completed costing Rs.1627 crore. Rs.1128 crore have been released by the government and Rs.486 crore have been contributed by the people in the shape of free labour, material and cash. 49 lakh Individual Family Needs have been received in the quarterly Gram Sabhas out of which 46 lakh have been redressed. 2.11 lakh Non-Financial Community Needs have been received out of which 1.89 lakh have been redressed.

111. Government have decided to implement Janmabhoomi three times in a year. Focus for Janmabhoomi in the month of January, will be on farmers, May Janmabhoomi on Women and September Janmabhoomi will focus on weaker sections.

112. A budget allocation of Rs. 75 crores has been made for Janmabhoomi for 2001-2002.

Clean & Green

113. The Andhra Pradesh Clean & Green Campaign was launched in September, 1998 to make every Habitation and Municipal Ward Clean and Green and to enable every citizen to lead a healthy life. Every third Saturday of the month has been declared as Clean and Green Day and the campaign focuses on Sanitation, Drinking Water, Tree Plantation and Health Awareness. The Campaign has been successfully implemented 29 times so far. Campaign activities are taken up in the State with the active involvement and participation of all the voluntary organizations, industries, labour unions, business houses, students, teachers and government employees in the State with appreciable achievements. Government have recently promulgated an ordinance for the protection and promotion of land, water, and trees to improve the overall environment and scientific use of ground water.

Youth Advancement & Sports

114. The most important agenda item under A.P. State Youth Policy is to provide employment opportunities to youth. Chief Minister’s Empowerment of Youth Programme (CMEY) is being implemented for the benefit of unemployed landless, educated and uneducated youth. They are motivated to form into self-help groups to pool their savings to take up economic activity with the Government assistance. They are involved significantly in Community Development activities. About three lakh youth are likely to be benefited. Youth Development Programmes also include promotion of sports, cultural talents and leadership qualities among the youth, village and community development activities, youth hostels, District Youth Centres, Youth festivals, adventure activities etc. Free Travel Concession was also provided for youth attending interviews and examinations organized by various Government Agencies.

115. To improve the participation of youth in Sports and Games, our Government has bought out long-term policy for promotion of Sports. To nurture sports talent, Academies have been opened in place of multi-discipline Sports Hostels. Combined Tournaments are being conducted to search talent from far-flung areas of the State. The State players won laurels at National and International events in disciplines like Weightlifting, Badminton, Chess, Athletics and Gymnastics. The State honoured the Sydney Olympic Bronze Medallist Smt. Karnam Malleswari in a befitting manner, whose success was the pinnacle of achievement.

116. Apart from the normal budgetary support, an additional amount of Rs.25 crores per annum is also being contributed to the Sports Authority of Andhra Pradesh by imposing sports cess on all categories of liquor and beer to generate additional amount for promotion of sports in the State.


117. Our Vision document sets challenging targets for economic growth, which requires a new, and comprehensive growth agenda. To bring this new dynamism in the development process, Government has to play the role of facilitator, enabler and catalyst of economic change. State needs to create the conditions that will allow private investors to successfully participate in its development. This involves building infrastructure and reforming regulation to create a conducive environment for business. In recognition of this, our Government has come out with the comprehensive infrastructure policy being supplemented with sector policies and model concession agreements. Given the magnitude of the task of mobilising huge investments, we need to prioritise and coordinate investments in certain key regions. Initially, the focus will be on building infrastructure in the key economy clusters of Hyderabad, Vijayawada, Visakhapatnam, Nellore, and Anantapur to attract development of new industries in all the three regions of the State. Our Government has also identified key social and physical infrastructure projects for immediate development, which are designated as mega infrastructure projects. For speedy and transparent implementation of these projects, a high level Task Force Committee has been set up. Further, to give legal sanctity to the infrastructure policy, we have initiated steps to formulate a relevant statute called “Infrastructure Develolpment Enabling Act” which would address the issues of project delivery process, risk sharing, dispute resolution and collection of user charges.


118. Government maintains 65,000 Kms. of Road Network in R&B sector. Of these 1800 Kms. of roads have been renewed and the remaining road network has been maintained by taking up ordinary repairs and patchwork. Besides, under the A.P.State Highway Projects, a length of 290 Kms. has been improved under the widening & strengthening component of this project. Similarly, backlog maintenance has been completed on 695 Kms. A total of 120 Kms. has been improved under heavy periodic maintenance under APERP Performance based maintenance contract has been awarded in four districts and it is proposed to extend the same to other districts in a phased manner. 352 Kms. of roads, 32 bridges and 69 buildings are completed under the A.P. Hazard Mitigation Project.

119. Government has completed 1719 Kms. of rural roads and 69 bridges under the NABARD program. A project report has also been prepared for improvement of 24000 Kms, of “taken-over-rural roads” at the projected cost of Rs.3500 crores.

120. The Government has projected three expressways/bypasses to Ministry of Road Transport & Highways for taking up at an early date. 60 other works at a total cost of Rs. 260 crores will be taken up in the coming year from the accruals to the State from diesel cess under the Central Road Fund.

121. In the last year, 137 Kms of State roads has been upgraded as National Highways. The riding quality on the existing National Highways has been considerably improved.

122. The National Highway Authority of India has taken up four laning of NH-5 from Tada to Itchapuram at an estimated cost of Rs.5,000 crores. The Process of inviting tenders for this project has already begun and the work on the entire stretch of about 1000 Kms in the State is scheduled to be completed by December, 2003.


123. Computerisation of RTOs’ offices has been taken up to provide quick, efficient and better services to the consumers. Efforts are also made to mitigate the problem of vehicular pollution. 261 Private Pollution Testing Stations have been licensed to issue Pollution Control Certificates.

Ports & Airports

124. Kakinada Port has been developed as a Deep Water Port with the loan assistance of ADB. Operation and management of the existing 3 berths at Deep Water Port and construction and management of another berth at Kakinada Port is privatised. The green field ports at Krishnapatnam and Vodarevu have also been privatised. Twelve minor ports between Bhavanapadu to Krishnapatnam have been identified for development. State Government also proposes to create a special economic zone between Kakinada and Visakhapatnam for which necessary efforts are being made to obtain clearances from Government of India.

125. A new Hyderabad International Airport at Shamshabad is proposed to be developed under Joint Venture between Government of Andhra Pradesh, Government of India and the private developer. An extent of 5,000 acres is being acquired for the development of this Airport. Two detailed proposals received in this regard are under evaluation. It is also proposed to develop Visakhapatnam and Vijayawada Airports. Extension of the existing run-way at Begumpet Airport is also being taken up.

126. In order to provide necessary counterpart resources to attract private investments in large infrastructure projects, Government has set up an “Infrastructure Development Fund” with a contribution of Rs. 80 crores for the year 2000-2001.


127. Andhra Pradesh is one of the pioneering States to launch Power Sector Reforms for achieving rapid economic development and the reform process is in advanced stage. It is a matter of gratification to recall that the first tariff order of the Regulatory Commission stood the test of time and judicial scrutiny. The Sector is proceeding on a war footing to tackle theft of energy and improve operational and financial performance. It is hoped that the sector will achieve a turn around with the above efforts.

128. The reforms programme initiated during 1998-99 will be continued with all our efforts to improve the viability of the sector and quality of supply to the consumer. While one of the short gestation projects, Lanco Kondapalli Power Limited (355 MW) has gone into generation during the current year, State Government have succeeded in getting Natural Gas allotment for the liquid fuel based projects. It is expected that an additional capacity of 1400 MW will materialize over next three to four years consequent to the allotment of Natural Gas. Efforts are also on with Government of India and Indian Financial Institutions to secure financial closure for pending power projects. Though availability of hydel power during the current year was less than normal, still with better regulation and measures for checking waste of energy in transmission and distribution, APTRANSCO has been able to maintain quality supply during the year. With the completion of pipeline laying work for Lanco Kondapalli Power Limited to facilitate operation with Natural Gas which is expected by July,2001 and the commissioning of Simhadri Project (1000 MW) during the first half of 2002, it is expected that the power supply position would be comfortable during 2002 and will reach surplus by 2003 onwards.

129. As part of efforts to contain pilferage of energy, apart from taking stringent measures under Act No.35 of 2000 (Indian Electricity (Andhra Pradesh Amendment) Act, 2000), a campaign was also launched to regularize unauthorized users of energy to provide them an opportunity to become lawful consumers. As against 19.8 lakhs of unauthorized domestic consumers who registered themselves, 16.57 lakhs have already been regularized and the regularization process is expected to be completed shortly.

130. An amount of Rs. 1,799.09 crores was incurred under Energy sector during 1999-2000. This year we are likely to spend Rs.2,894.20 crores. A budget provision of Rs. 2,845.67 crores is made for the year 2001-2002.

Information Technology

131. Aim of the Information Technology policy of government is to use it for the economic development of the State, improvement of quality of life of the citizens and for providing good governance. There is an encouraging growth in the software exports. It is hoped that it may cross Rs.1800 crores against the achievement of Rs.1059 crores during 1999-2000. The number of software units is also growing very fast and it is likely to reach l200 by March 2001.

132. During the Partnership Summit held in January,2001, several IT companies have shown their inclination to invest in Hyderabad after recognizing the obvious advantages. 10 MOUs have been signed for IT projects with an estimated cost of Rs.2,469 crores and l2 IT Projects with a likely investment of Rs.4,220 crores have been announced during the Partnership Summit.

133. Our government has been acting as a catalyst for establishment of critical infrastructure, vital for the growth of IT industry. This infrastructure is in the form of setting up IT parks and creation of bandwidth.

134. The first block of Phase II of Hi-tech city, designed to create 867,000 Sq.ft of hitech space will be ready in all respects by March,2001. In order to spread the growth of IT industry to other areas of the State, Government has decided to establish Cyber Parks in all the districts. The government has also played a facilitatory role to establish IT parks in the private sector with 30 lakh sft. of built up space in and around Hyderabad.

135. The policy of free right of way for laying Optical Fibre Network in the State, announced during the financial year,1999-2000 has given rich dividends in the form of large OFC projects undertaken by Reliance, Bharti and Tata Tele-services. It is hoped that the benefits can be realized during the ensuing financial year. The government is also playing a facilitatory role in promoting a sub-marine OFC link between Vizag and the southeast Asia that will connect the State to the global networks through high-bandwidth.

136. We have made a budget provision of Rs. 69.88 crores for the year 2001-2002 under Information Technology.


137. Tourism has been identified as a growth engine for the State under Vision 2020. As per the Tourism Policy, attractive incentives and tax breaks have been provided for investors in the Sector. Special Tourism Areas for intensive investment and development under Private Sector have been declared. The main role of A.P. Tourism is to formulate strategies for development of Tourism and to enter into public – private participation. The emphasis will be on Pilgrim Tourism, Adventure Tourism, Eco-Tourism and Leisure Tourism.

138. A number of projects have been notified for private investment. Already letters of award or agreements are concluded in case of projects like IMAX Theatre, Rock Garden, Aqua Laser Show at Hyderabad, Beach Resort at Rishikonda at Visakhapatnam, the private investment being in the order of Rs.l26 crores. As many as l3 MOUs have been entered for projects to be set up at Tirupathi, Visakhapatnam, Rajahmundry and Hyderabad with an investment of Rs.338 crores. The inflow of private investment during the year 2001-02 will be about Rs.l500 crores. There is a tremendous response from private sector for investment in Tourism related activities. To make Andhra Pradesh, Tourism Destination State of India, a Tourism Development and Management Plan for 2020 has since been finalised.

139. A budget provision of Rs. 41.78 crores is made for the year 2001-2002.

Good Governance

140. Over the years, government interventions in several sectors have expanded instead of sharply focusing on those critical sectors, which need assistance. Moribund rules, practices and red tapism have made the system ineffective. Protectionism and state ownership of activities and services have not spurred the growth of private sector in providing services, which are traditionally under the government domain. Globalisation and unparalleled technological breakthrough in the recent past have thrown up many challenges of electronic governance. Therefore, good governance will change the role of the Government from a major operator in many sectors to a prudent facilitator, from a regulator and controller of most economic decisions to that of an enabler of market based development, from a direct top down administration and centralized decision making to an enabling, empowering participatory local administration and people friendly government. Good Governance will be achieved through continuous reforms at all levels. To set a model for SMART Government, Centre for Good Governance is being set up at Dr.MCR HRD Institute with assistance from DFID, UK.


141. The infrastructure for e-governance established during 1999-2000 in the form of AP State Wide Area Network (APSWAN) and Video Conferencing are being effectively used. Various projects like CARD, TWINS, and FAST have been providing integrated citizens services. Secretariat Knowledge Information Management System (SKIMS), a major IT Project is aimed at developing an improved work flow system for all the Secretariat departments.

142. A comprehensive data base on 7.67 crore citizens, 1.6 crore households and l.2 crore land holdings has been developed and is available at the Mandal level. Out of the 1,125 Mandals, data relating to 865 Mandals has already been entered into the PARAM Super Computer installed in Secretariat. Once completed, this Data Warehousing Project will facilitate better targeting of programmes and monitoring and evaluation. Promoting use of Telugu in Computers through adoption of appropriate standards is also being taken up. Under I.T. Education, MSIT programme has been planned in association with Carnegie Mellon University. Computerisation in Government schools is proposed in the ensuing year.

143. Our government intends to take the benefits of IT to rural areas of the State. To this end, MOUs have been signed with ISRO for establishment of Satellite-based network. This would be used for applications like distance education, telemedicine, e-governance and programmes for self-help groups, cooperatives and other such clients in rural areas.

Law & Order

144. Law and order situation in the state has been satisfactory. The violence perpetrated by the Left wing extremist particularly the outlawed PWG has come down. The state was free of incidents of caste violence. The Crime statistics for the year indicate a significant fall in all major crimes. This can be attributed to effective policing and prosecution to ensure convictions. The Government intends to corporatise the Special Protection Force Department in the State with the objective of recovering user charges from establishments having special security needs. The Government has also agreed, in principle, to constitute a Prisons Development Board.

Accounts 1999-2000

145. The final Accounts of 1999-2000 reveal a revenue deficit of Rs.1,233.25 crores. After taking into account the transactions on capital as well as public accounts, the year closed with a positive balance of Rs.281.88 crores.

Revised Estimates 2000-2001

146. Transactions as per the revised estimates of 2000-2001 indicate a revenue deficit of Rs.3,112.94 crores against the budgeted revenue deficit of Rs. 3,840.90 crores. The overall transactions of the year are estimated to result in a net deficit of Rs.406.52 crores. After taking into account the opening cash balance of Rs.281.88 crores, the year-end balance is estimated to be negative Rs.124.64 crores.

Budget estimates 2001-2002

147. During the financial year 2001-2002, we have programmed for an expenditure of Rs.25,496.97 crores under Non-Plan and Rs.10,326.65 crores under Plan. This will result in a revenue deficit of Rs.3,887.03 crores which would be 2.5 per cent of GSDP. Fiscal deficit is estimated to be Rs.8,897.03 crores which would be 5.8 per cent of GSDP. After taking into account the overall transactions of the year, we will have a net deficit of Rs.22.99 crores. With the negative opening balance of Rs.124.64 crores, financial year is expected to end with a negative balance of Rs. 147.64 crores.

148. With these words, I now commend the Budget to the House for approval.