Plain, boring : Rosaiah's Budget has no surprises

A no-tax budget, revenue receipts growth projected at over 12 per cent

The Andhra Pradesh government led by Y S Rajasekhara Reddy has once again made a determined bid to push its irrigation agenda by allocating 40 per cent of the total plan outlay to the sector, but the state budget this year lacked any surprises on other counts.

Though the size of the total plan outlay for 2005-06 saw a whopping increase at Rs 15,650 crore as compared to Rs 12,825 crore during the current year, allocations to other sectors remained almost stagnant.

Adding to this there were no major schemes, either for the industry or for any other social sectors, barring a small initiative in terms of creating an infrastructure fund.

The energy sector received the third highest allocation in the plan outlay amounting to Rs 2,192 crore but it is meant for only energy subsidies.

Though any new sops for the industrial sector would be made public only through the much awaited new investment policy which is expected to be announced next month, the performance of the state in this sector during the current year has no cause for cheer.

Foreign direct investment received by the state during the current year remained almost at negligible levels, according to the Economic Survey published by the government.

On financial management, finance minister K Rosaiah has complemented his government for not resorting to ways and means advances during the first year in power.

He cited the past situation under the Telugu Desam party government where the government availed over Rs 6,316 crore through ways and means advances. Keeping the 9 lakh strong government staff in a happy mood, the finance minister said that the pay revision commission recommendations would be implemented in the next fiscal as and when the government receives the report.

With a steep bent on irrigation sector, allocations to other sectors such as education, health, welfare have come down in terms of per centages, even as they saw a marginal increase in absolute terms.

Plan outlay for education and allied departments have gone up to Rs 728.9 crore as compared to Rs 621 crore in the current year even as its share in the total outlay has come down to 4.66 per cent as compared to 4.85 per cent during current year.

On the industrial front, the finance minister K Rosaiah explained that during the year 2004-05, the state level nodal agency has arranged clearances and approvals for 183 large and medium scale industries at an investment of Rs 7,620 crore.

Among other measures to strengthen financial accountability, the finance minister announced a comprehensive training programme for chief controlling officers.

The schemes which were either revived or continued in the annual budget include the legislators' assembly constituency development programme with an allocation of Rs 150 crore and Rs 500 crore earmarked for the Indira Prabha scheme which envisages development of 3.94 lakh acres of agricultural land belonging to scheduled castes, scheduled tribes and backward classes.

On strengthening agricultural extension services in the state, the minister announced that the government has given the go ahead to fill up 491 posts of agriculture extension officers and 275 mandal agricultural officers.

While the opposition Telugu Desam party was critical of the entire budget exercise, the left and other allies of the Congress party too were not too enthusiastic on the budget for the fact that allocations to social sectors saw little improvement.

---

Dour stats Budget 2005-06

State government earmarks 40 per cent of the total annual outlay of Rs 15,650 crore to irrigation projects. Plan outlay sees 17.75 per cent increase over the current year

Revenue deficit has come down to Rs 1,401 crore as compared to Rs 2,961 crore in 2003-04, which accounts for 16.72 per cent in the fiscal deficit

Fiscal deficit is 8,379.8 crore (Rs 6,706.8 crore in the current year)

Rs 7,923 crore earmarked for debt servicing in the year 2005-06

Revenue deficit was 1.64 per cent of GSDP in 2003-04 and this is expected to come down to 0.72 per cent in 2004-05

Seed fund of Rs 100 crore for infrastructure and investment requirements of industrial sector. Assembly constituency development fund worth Rs 150 crore

Old age monthly pension is increased to Rs100 from existing Rs 75. Sanction of pensions to one lakh old age, disabled beneficiaries

Rs 500 crore for development of farmlands belonging to SC, ST, BC families

'Increased allocation to industries dept will benefit upcoming industries'
INDUSTRY TAKE

The state Budget from the industry point of view seems positive because of the increased allocation of Rs 293.53 crore to the industries department. This is a good sign and will benefit upcoming industries.

This apart, although the Budget has not earmarked any plans for the bio-diesel sector, the 50 per cent increase in allocation to the irrigation sector will help us indirectly.

It may help our industry get more raw materials in the form of regular supply of seeds. The only area of concern in this year's Budget is the growing debt burden of the state that is estimated to increase to Rs 76,519 crore as compared to Rs 66,202 crore for 2004-05.

N Satish Kumar
Managing director, Southern Online Bio

This year's state Budget is inclined towards rural infrastructure and irrigation projects. But it remains to be seen whether the allocation that they have made for these projects can actually be spent this year.

The allocation in this sector could have been a little less taking into consideration that three months will be monsoon period when work on such projects will be stalled.

So it seems to be a populist Budget with focus on rural economy, education and health. In fact I do not think that this year's budget is drastically different from last year's. I expect the union budget also to be on similar lines.

E Sudhir Reddy
Managing director, IVRCL Infrastructures

The set-up of an infrastructure fund worth Rs 100 crore is a step towards the right direction as what Andhra Pradesh lacks unlike Gujarat, Maharashtra, Karnataka and Tamil Nadu is basic infrastructure.

The allocation, however, could be higher by another Rs 150 crore, as Rs 100 crore is too small an amount. The increase in allocation to the irrigation sector is also a welcome move as this will lead to a reduction in power subsidy in the long run.

The government, however, needs to prune its expenses and reduce the interest burden that is mounting because of loans taken. This burden can be offset by selling some sick units.

Narender Surana
Managing director, Surana Telecom