52% increase in Andhra Plan outlay

Govt proposes no fresh taxes.

The Andhra Pradesh government today presented its annual budget for the year 2007-08 to the Assembly with a whopping 52 per cent increase in the plan outlay at Rs 30,013.54 crore along with an overall increase of 31.58 per cent in the total expenditure at Rs 80,996.60 crore. No new taxes have been proposed.

While total revenues, including central devolutions, grants-in-aid and non-tax income, have been pegged at Rs 54,949.57 crore, an increase of 21.71 per cent for the new fiscal year as compared with Rs 45,145.98 crore (revised estimates) in the current financial year, the capital receipts, including open market loans, have been proposed to be increased by 58.5 per cent at Rs 26,072.92 crore, compared with Rs 16,437 crore to meet the increased budgetary expenditure.

The allocation to irrigation sector has been predictably increased to Rs 13,002 crore from Rs 10,028 crore in the current year, while the outlay for social services has been steeply raised by almost 100 per cent to Rs 10,815.69 crore, compared with Rs 5,667.06 crore this year, driving the budget into the election mode two years ahead.

Weaker section housing accounts for most of this increase whose total budgetary allocation has gone up by a whopping 299 per cent to Rs 5,443 from Rs 1,823 crore in the current year. The budgetary allocations to the entire social welfare sector has been increased by 25 per cent.

"With over 50 per cent increase in the annual plan outlay and substantial allocations to social sectors, the annual budget for the year 2007-08 can be termed as a unique one even when compared with our three earlier annual budgets. Never in the history of any state had the plan outlay been increased at this level," chief minister YS Rajasekhara Reddy said soon after the Budget presentation was over.

Significantly, finance minister K Rosaiah announced that the state government would be achieving the fiscal responsibility parameters in terms of revenue and fiscal deficit levels envisaged in the State Fiscal Responsibility and Budget Management Act almost one year ahead of the schedule.

While proposing a net revenue deficit of just Rs 33.08 crore and fiscal deficit of 3 per cent of the gross state domestic product (GSDP) during the new financial year, the minister said the government would achieve revenue surplus in the next annual budget.

On the power front, the proposed government subsidy for the year 2007-08 has been more than doubled at Rs 2,425 crore, compared with the normal subsidy of Rs 1,125 crore on account of additional power purchases to meet peak demand fuelled by increased consumption by the agriculture sector.

According to the chief minister, though the GSDP growth for the year stood at 7.15 per cent on account of loss in agriculture output, the services and industries sectors achieved a fair growth of 10.3 per cent and 11.6 per cent respectively.

"Once the fruits of the ongoing Jala Yagnam programme reaches the farmers, we expect to achieve the agriculture growth rate of 4 per cent envisaged for the 11th Five Year Plan," Reddy said.

The chief minister said the budgetary expenditure would be contained at Rs 74,441 crore since the government is expected to manage without resorting to ways and means and other contingencies while trying to mop up more resources to meet the plan expenditure. Under the non-plan expenditure, the government would be spending Rs 13,000 crore on debt repayment and over Rs 17,000 crore on salaries and pensions.

State's own tax and non-tax revenues are expected to increase by 24 per cent at Rs 31,399.13 crore and Rs 6,857.61 crore respectively, though the increase is on the downside when compared with last year's performance.

Similarly, the share of central taxes has been proposed to be increased by 10 per cent at Rs 9,190 crore, compared with Rs 8,355 crore this year while the same increase was 20.20 per cent when compared with the growth over 2005-06 figures.

Increase in grants-in-aid from the Centre is also expected to come down substantially as per the budgetary estimates for the year 2007-08.

The total outstanding debt of the state for the new fiscal year is expected to increase to Rs 86,464 crore, compared with Rs 77,952 crore this year.