The Hindu : State's debt put at over Rs. 42,000 cr.

Online edition of India's National Newspaper
Saturday, Feb 23, 2002

Southern States

Southern States - Andhra Pradesh

State's debt put at over Rs. 42,000 cr.

By Our Special Correspondent

Hyderabad Feb. 22 .The total public debt of the Andhra Pradesh Government is estimated to be Rs. 42,556 crores, as of March 31 this year, of which 55.8 per cent is oustanding Central loans and 25 per cent market borrowings. The State has to pay Rs. 5,406 crores towards interest this year, according to the Economic Survey presented to the State Assembly on Thursday.

The Chief Minister, N. Chandrababu Naidu, has said that the size of this debt is in line with debts incurred by several other State Governments and the Centre, and that there is no threat of a "debt trap'' because the loans are being spent judiciously. The Opposition vigorously disputes this fact, asserting that the State has been driven towards bankruptcy by the Telugu Desam.

Of the State's annual income of Rs. 33,106.80 crores, a sum of Rs. 1,652 crores is given as subsidy to the Transmission Corporation of Andhra Pradesh towards subsiding power charges while the subsidy for distributing rice at Rs. 5.25 per kg has come down to Rs. 600 crores this year compared to Rs. 1,062.80 crores last year. There is demand for increasing the subsidy to TRANSCO rather than increasing the power tariff.

The problem in rice subsidy is that it is targeted at families, which are below the poverty line, that is families having an annual income of less than Rs. 11,000. But the beneficiary families actually number 113.60 lakhs. As the percentage of population below the poverty line is assessed at 15.77 per cent, or 119 lakh individuals, there are a large number of ineligible families having white cards, but yet the demand is for more and more white cards.

After providing for about Rs. 11,000 crores towards salaries and pensions, Rs 5,406 crores towards interest payments, Rs 2,200 crores towards subsidy, there is hardly any money left for maintaining the administrative setup. That is why aid from the World Bank has come to play a big role in the State's development effort, for restructuring the economy or improving the power sector.

Added to this, the salaries of Members of Assembly was increased by Rs. 15,000 per month, towards cost of private security, after the Congress MLA, Ragya Naik, was killed by Peoples War Group naxalites in Mahbubnagar district last year. Now, an MLA gets Rs. 41,000 per month, tax free, because his actual salary is shown to be Rs. 2,500 per month while the rest are shown as non-taxable allowances. For attending a day's session, the MLA gets Rs. 300 as sitting fee and he can draw three times AC Second class fare even though he travels free in a bus to attend the Assembly or Committee meetings.

The total outstanding debt constitutes 28.6 per cent of the Gross State Domestic Product (GSDP). This debt consists of Rs. 23,652 crores towards Central loans (of which the loan from external agencies such as the World Bank is Rs. 7,335 crores), Rs. 10,687 crores is market loans and Rs 3,885 crores from Provident Fund.

Seventy per cent of the normal plan assistance under the Gadgil-Mukherji formula and the additional Central assistance for externally-aided projects is given as loan and 30 per cent as grant.

The working results of 39 State Level Public Enterprises (SLPEs) in 199-2000 show that 17 contributed a profit of Rs. 392.36 crores, while 9 incurred a loss of Rs. 396.24 crores and three reported no profit no loss. Thus there is a net loss of Rs. 3.87 crores, against a net loss of Rs. 106.87 crores the previous year.

The State assumes a unique place in the Country with 4.03 lakh women self-help groups comprising 54.23 lakh members, and they have a corpus fund of Rs 1,043 crores, the survey said.

The State received 533 proposals of foreign direct investment as on October last, with an outlay of Rs. 10,607 crores. Out of this, 149 proposals with a financial outlay of Rs. 2,376 crores were grounded. Under the Prime Minister's Rozgar Yojana, 2,04,614 units have been sanctioned with an investment of Rs 1,251 crores.

The Survey says that mass media is being used to reach people with family welfare messages, and that a series of story-based articles are being released in Eenadu every Sunday since March last on age at marriage, institutional deliveries and neo-natal care. Another series on spacing are being released in Vaartha.

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