Andhra Pradesh presents deficit budget with no new taxes

Fiscal deficit at 2.97 per cent of GSDP.

Andhra Pradesh Chief Minister K Rosaiah today presented a tax-free budget for financial year 2010-11 with an outlay of Rs 1,13,675 crore and a projected expenditure of Rs 1,13,660 crore. The fiscal deficit is estimated at Rs 12,983 crore, or 2.97 per cent, of the gross state domestic product (GSDP).

This is the third year in a row where the state’s budget has crossed Rs 100,000-crore mark.

Out of the Rs 1,13,675 crore, the state's share of revenues would be Rs 62,702 crore, its share in central taxes would be Rs 14,505 crore while central grants were projected at Rs 13,441 crore. The state expected capital receipts for 2010-11 at Rs 23,027 crore. Of the Rs 1,13,660 crore expenditure, Rs 73,347 crore would be non-Plan expenditure while Rs 40,313 crore would be Plan expenditure. The revenue surplus is estimated at Rs 3,548 crore.

According to the revised estimates for 2009-10, revenue receipts stood at Rs 78,406 crore projected revenues for 2010-11 were Rs 90,648 crore.

“The global economic slowdown has impacted the economies of all states more than what we had anticipated,” said the chief minister.

“The focus of the government is achieving economic growth with equity. For faster economic growth, we are proposing to keep the capital expenditure high,'' Rosaiah said adding that three major projects, with Rs 5,699 crore financial assistance from World Bank, were being taken up to strengthen infrastructure in urban and rural areas.

There were no marked improvements in budget allocation for the various sectors. The state government reduced the allocation to Jalayagnam (irrigation projects) from Rs 18,000 crore in 2009-10 to Rs 15,011 crore in 2010-11. It also reduced the power subsidy bill to Rs 4,500 crore from Rs 6,040 crore in 2009-10. The allocation for food subsidy by Rs 500 crore to Rs 3,000 crore. It earmarked Rs 3,261 crore for urban development, Rs 1839 crore for agriculture, Rs 3,155 crore for education and Rs 2,284 crore for infrastructure among others.

The state would shortly announce a new industrial policy to attract industrial investments, Rosaiah said adding that the government had received proposals for establishment of 353 new large industries with an overall investment of Rs 81,092 crore to create additional employment for 1,11,000 people.

Referring to the power sector, the Chief Minister said the Power Generation Corporation of Andhra Pradesh Limited has been given the go-ahead to take up massive capacity addition of 17,558 Mw to meet future power requirements. The state has formed Visakhapatnam-Kakinada Petroleum, Chemical and Petrochemical Investment Region Special Development Authority for planned growth of the area.