Previous Budget Speeches


Economic Survey 1974-75


The year 1974-75 commenced against a background of a substantial recovery made in the economy of Andhra Pradesh during the year 1973-74. However, inspite of a record level of foodgrains production during 1973-74, the State economy during 1974-75, was under some strain due to inflationary pressures observed in the country. Although the long dry spells in the early part of the kharif season in the current year had some effect on the overall kharif production still, with the encouraging Rabi prospects, it is now estimated that the overall foodgrains production in the State in the current year may be of the same order as in the previous year. In the industrial sector, there are encouraging trends with the easing of the power situation and a number of industries picking up production. Some selected indicators of the economy are given in Table-1.

State Income

The State Income (partially revised) estimates at constant (1960-61) prices increased to Rs.1,449.93 crores in 1973-74 from 1,270.81 crores in 1972-73, or an increase of the order of 14 per cent. In the current year, since agricultural production is likely to be atleast of the same order as in 1973-74 and since industrial production has been picking up, it is expected that the State Income will continue to register growth.


The Agricultural season 1974-75 started against a background of a record level of foodgrains production during 1973-74. The State received good pre-monsoon showers in the Month of May, 1974, particularly in Telangana and Rayalaseema regions, which helped the cultivators in taking up the preparatory tillage operations of Kharif dry crops. But the rainfall received during the month of June, 1974 was scanty, uneven and erratic. During the month of July also the South-West monsoon continued to be weak throughout the month. The monsoon was active during the first week of August 1974 and there were good rains throughout the State. However, from 10th August the rainfall was scanty and practically a prolonged dry spell upto the first week of the September 1974 was observed. Though the rainfall received during the month of September 1974 was surplus in the Coastal Andhra and Rayalaseema regions, it was deficient in all the districts of the Telangana region.

Considering the South-West Monsoon period as a whole, the rainfall received during the period from 1st June to end of September 1974 was 516.0 MM. for the State as a whole as against the normal rainfall of 593.4 MM.. The deficit in rainfall in the South-West monsoon period as a whole was 13 per cent for the State. The Telangana Region recorded a heavy deficit of 25 per cent and Coastal Andhra Region a marginal deficit of 3 per cent while Rayalaseema region recorded a surplus of 9 per cent. The monsoon was however very active throughout the State during the month of October 1974 and this period considerably in the revival of the standing dry crops and in taking up rabi crops.

According to preliminary estimates, the area under foodgrains during Khariff 1974-75 is estimated at 58.29 lakh hectares as against 63.56 lakh hectares during the corresponding season of 1973-74 which shows a decrease in area by about 8 per cent in the State. The total area under major cereals and millets, viz., Rice, Jowar, Bajra, Maize and Ragi during the current Kharif season is estimated to be 46.34 lakh hectares as against 49.19 lakh hectares as against 49.19 lakh hectares (actuals) during the previous year or a decrease in area of about 6 per cent. The production of Rice during the current Kharif season, according to the second forecast report, is estimated at 38.01 lakh tonnes as against 41.77 lakh tonnes during 1973-74 representing a decrease in production by 9 percent. The fall in production is due to decline in yield rates in Srikakulam, Kurnool and in most of the districts of Telangana region.

The production of the 5 major crops viz., Rice, Jowar, Bajra, Ragi and Maize in the State based on the preliminary results of crop cutting experiments works out to 52.50 lakh tonnes in the Kharif season of the current year as against 56.15 lakh tonnes during the year 1973-74 accounting for a decrease in production of about 7 per cent.

Rabi Prospects

The area and production of Rice in the State during the Rabi season of 1973-74 were 8.94 lakh hectares and 14.07 lakh tonnes respectively.

The transplantation of Rabi Paddy during 1974-75 is still in progress. In view of adequate supplies of water in all irrigation sources in the State except Minor Irrigation Sources in Srikakulam, Nellore, Chittoor, Nalgonda and Medak districts, the normal area under Rice is expected to be covered during the Rabi season 1974-75. Apart from this normal area an additional extent of about 3 lakh hectares is proposed to be brought under paddy of this additional area, the deficit in Rice production during Kharif season is expected to be made good during Rabi season.

Dry Crops

The showings of all Rabi dry crops during the current season were completed in all the districts in the State and the condition of the standing crops is reported to be generally satisfactory in all the districts except in Srikakulam, Nellore and Nalgonda districts.

With the generally good rabi prospects, the overall foodgrains production in the State during 1974-75 may be of the same order as that in 1973-74.

Industrial Production

After a serious dip in industrial production during 1973, signs of industrial revival are again visible during 1974.

The monthly average production of coal during 1974 has registered an increase of 10 per cent over that in 1973. Similarly, the production of Sugar, which registered a decline during 1973, revived in 1974. The increase in production of Sugar during 1974 was of the order of 11 per cent over 1973. The monthly average production of cotton yarn registered an increase of 14 per cent and that of cotton fabrics 13 per cent over 1973.

The production of Cement, which received a severe set back during 1973, partially recovered, registering a growth of 5 per cent during 1974 as compared to 1973. The monthly average production of paper has also increased by 5 per cent during 1974 as compared to 1973. The monthly average production of Chemical fertilizers has registered a marginal increase of 1 per cent during 1974 compared to 1973. The monthly average production of cigarettes has also registered a marginal growth of 1 per cent during 1974 over 1973.

The other industries that have registered marked recovery during 1974 are—Vanaspathi (70 per cent), Machine Tools (23 per cent), Rayon Fabrics (11 per cent), Chemical Industries-Oxygen (18 per cent) and D. Acetylene (15 per cent). However Asbestos Cement (-10 per cent) and Rayon yarn (-7 per cent) registered a decline in production.

The industrial recovery is mainly attributable to the easing of the power situation and improvement in the supply position of industrial raw materials.

Labour Situation

The number of labour disputes during the period April-December, 1974 was only 47 as against 82 in the full year 1973-74. However, the workers involved were 26,375 against 30,173 in 1973-74 while the man-days lost during April-December, 1974 were 3.34 lakhs against 1.71 lakhs in 1973-74.

Employment Situation

The number of placements made through the employment exchanges during the period April-December, 1974, was 19,460 against 30,613 in the full year 1973-74. The number of placements made during April-December 1974 in State Government sector was 8,188 followed by Quasi-Government sector with 7,300 placements, Central Government sector with 3,213 placements and Private Sector with 759 placements.

Wholesale Prices

The inflationary trends, which are observed throughout the country have affected the prices of major commodities in the State also. There was an increase in the wholesale prices of all foodgrain inspite of a good crop during 1973-74. The increase in wholesale prices of Rice I sort in December 1974 was 31.6 per cent over the corresponding price in December 1973 and the corresponding rise in prices of Rice II sort was 34.7 per cent. Among pulses, the wholesale prices of Redgram has almost doubled between December, 1973 to December, 1974. The wholesale prices of other pulses such as Green gram, Black gram, etc., increased only moderately by 13.5 to 28.7 per cent. Among oilseeds, Groundnut (pods) had registered an increase of 12.6 per cent whereas the other oilseeds have actually registered a decline. Among condiments, chillies (dry) registered an increase of 73.2 per cent. The wholesale price of sugar registered an increase of 19.8 per cent. However, the wholesale price of Tobacco declined by 14.6 per cent, during the same period.

Consumer price Index Numbers

The substantial increase in the wholesale prices was reflected in the retail prices and in the general consumer price indices. The average consumer price Index Number during April-December 1974 for Hyderabad Centre was 20.6 per cent. The increase in consumer prices in the State however, was generally of a lower order than in All India where the average Index of consumer prices for April-November 1974 went up by 28.7 per cent when compared to the average Index during the corresponding period of 1973.



The only originally approved by the planning Commission for the Annual Plan 1974-75 was Rs.127.39 crores comprising Central assistance of Rs.48.75 crores and State’s resources of Rs.78.64 crores. However in the vote-on-account Budget an outlay of Rs.128.39 crores was provided. The difference of Rs.1.00 crore represents the resources raised by surcharge on vehicles of the Road Transport Corporation, which was decided to be reinvested in the Road Transport Corporation itself. The Plan outlay has been further increased to Rs.132.73 crores in the final budget, due to unspent balances revalidated under special development schemes of Coastal Andhra, Rayalaseema and Telangana and also additional funds provided for certain schemes. Subsequently in the discussions held at new Delhi by the officials of the Union Ministry of Finance with the State Government officials on 30-8-1974, the State Plan outlay for 1974-75 has been indicated as Rs.137.78 crores. The difference between this plan and the plan provision in the final budget is Rs.5.05 crores (Rs.137.78 crores - 132.73 crores) and out of this Rs.1.75 crores is provided for Power Sector and Rs.3.30 crores for L.I.C loans of Rs.3.30 crores for Housing and Water Supply schemes include Rs.1.10 crores of direct loan for Housing Board and according to latest indication this will not be forthcoming. Therefore the final approved plan outlay for 1974-75 on the basis of reassessment of resources will be Rs.136.68 crores.

However, the revised Plan outlay for 1974-75 now provided comes to Rs.142.33 crores. The main reason for this increase in plan outlay is an additional amount of Rs.4.50 crores allocated for Nagarjunasagar Project. Besides this the State Government have also sanctioned additional funds of Rs.120.38 lakhs for clearing the rebate claims under Handlooms, Rs.30.00 lakhs for payment for compensation for lands acquired for the Industrial Development areas, Rs.40.00 lakhs for Gajuladinne Project and Rs.10.00 lakhs for investigation of Visakhapatnam Water Supply scheme and Jurala Project, Under the Prime Minister’s Five-Point Formula additional educational facilities were created in the Twin Cities during the year 1973-74. For continuance of these facilities during 1974-75 Rs.32.56 lakhs have been provided. An additional of Rs.22.27 lakhs has been provided for a number of other schemes. As against these additional allocations totaling to Rs.705.21 lakhs there were also savings under various Heads anticipated at Rs.140.50 lakhs. Thus the net increase in the plan outlay was Rs.564.71 lakhs raising the total plan outlay for 1974-74 to Rs.142.33 crores. Against this outlay, the expenditure incurred till the end of November 1974 (and in the case of some departments only till the end of September-October 1974) is Rs.66.54 crores. In a number of cases, release have to be made to various institutions, etc., and the working season starts from November onwards. It is, therefore, anticipated that there will be no significant shortfalls in the Annual Plan 1974-75.


The Planning Commission held discussions with the State officials at New Delhi on the 20th and 21st November 1974, to finalise the resources available for the Plan for 1975-76. In these discussions the resources available for the plan for 1975-76 have been estimated at Rs.131.36 crores. This includes Central assistance of Rs.48.75 crores which is the same as this year. However taking into account the requirement of funds for the Irrigation and Power Sectors and for essential programmes in other sectors, Draft Plan proposals for an outlay of Rs.189.84 crores were submitted to the Planning Commission. Discussions were held with the Planning Commission a official level on the 12th and 13th December 1974. Based on these discussions and pending finalisation of the plan it was decided to prepare the Plan for an outlay of Rs.153.68 crores for inclusion in the Budget. The Plan for 1975-76 has accordingly been prepared and included in the Budget. The statement below will indicate the major Head-wise details of the outlays for the Annual Plan 1974-75 and 1975-76.