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Jumbo-sized budget for A.P.

S. Nagesh Kumar

Significant tilt towards welfare and poverty alleviation programmes


It envisages an expenditure of over Rs.1 lakh crore

Rs.1,980 crore for the Rs. 2 a kilo rice subsidy scheme



HYDERABAD: A jumbo-sized budget envisaging an expenditure of over Rs. 1 lakh crore in 2008-09 and perceived as election-oriented for its significant tilt towards welfare and poverty alleviation programmes was presented in the Assembly by Finance Minister K. Rosaiah on Saturday.

Health insurance

The slant towards welfare was evident from the plan outlay of Rs. 1,980 crore for the Rs. 2 a kilo rice subsidy scheme, to be launched on April 7, coinciding with Ugadi, nearly Rs. 3,000 crore for weaker sections and women, Rs.450 crore for the health insurance scheme for the poor and Rs. 5,850 crore for housing.

A sizeable amount of the outlay for weaker sections has gone towards scholarships and construction of hostels for students.

Also, in tune with the Rajasekhara Reddy Government’s declared pro-farmer policy, irrigation has received a whopping amount of Rs. 16,500 crore while agriculture and allied sectors were allotted Rs. 2,723 crore representing an increase of 144 per cent over the current fiscal. The outlays for another pet scheme of Dr. Reddy – free power supply to the farmers – is Rs. 2,385 crore.

In proportion to the huge budget outlay, the plan size itself swelled to Rs. 43,203 crore, which is higher than the outlays of States like Uttar Pradesh and Maharashtra and a whopping Rs. 13,185 crore more than last year.

Mr. Rosaiah will earn the State an incentive of around Rs. 4,000 crore from the Centre by way of loan and interest reliefs for maintaining fiscal discipline.

He projected a revenue surplus of Rs. 709 crore and restricted fiscal deficit to Rs. 9,657 crore which is 2.82 per cent of the Gross State Domestic Product, lower than the 3 per cent limit prescribed under the Fiscal Responsibility and Budget Management Act.

The Finance Minister did not propose any new taxes nor increased the existing ones.

Addressing the question of how he proposed to mobilise resources for the massive expenditure proposed, he said the money would largely come from the State’s own tax revenue of Rs. 37,866 crore, non-tax revenue of Rs. 8,873 crore, another Rs. 12,597 crore as its share from Central taxes and Rs. 11,590 crore through centrally-sponsored schemes.

Mr. Rosaiah did not lay much emphasis on borrowings which will account for a good chunk of the resources required.

But he said that borrowed funds were not used by the Congress Government for financing revenue expenditure and was largely used for capital works.

Budget papers showed that the total outstanding debt of the Government was Rs. 93,593 crore and that an amount of Rs. 9,404 crore will be spent on debt servicing this year.

He said industry (9.88 per cent), agriculture (8.38 per cent ) and services (11.57 per cent) registered growth rates that were higher than the national average as was the GSDP growth rate (10.37 in 2007-08).

Overall, the Finance Minister presented a budget, which he later said, struck a balance between development and welfare.

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