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AP Govt to drop zero-based budgeting from next fiscal

Our Bureau

HYDERABAD, Jan. 4

THE Andhra Pradesh Government, which had adopted a zero-based budget aimed at bringing in new approach to budget process and also efficient use of budgeted amounts, is likely to do away with the practice next fiscal while taking up audit and evaluation o f its performance.

The Government also plans to raise additional market borrowings of about Rs. 2500 crores. Of this, about Rs. 800 crores has already been raised.

Hinting at this major development, the State Finance Minister, Mr.Yanamala Ramakrishnudu, said that even in this exercise, the targeted subsidies for subsidised rice scheme and the power sector subsidy of Rs. 1626 crores was earmarked.

While stating that the Government is in the process of preparation of White Papers on 10 major issues including the status of the State's financial position, power sector-related issues, administration, among others, the Minister said they were planned t o be made public to elicit people's reaction and suggestions so that necessary corrective measures can be initiated.

However, the appropriate mechanism for people's reaction and the forum for such interaction is to be finalised.

While defending the Government's efforts to use the ways and means resources, Mr. Ramakrishnudu said that there was nothing wrong as the Government had hinted at the use of Rs. 3000 crores in the budget itself as this was used to overcome temporary finan ce mismatch situation.

So far, the Government had released about 70 per cent of the non-Plan expenditure of Rs. 24,000 crores and 50 per cent of the budgeted Plan amounts. With the zero-based budgeting exercise, the Government had managed to bring down the non-Plan expenditure from Rs. 26,000 crores to Rs. 24,000 crores this fiscal.

However, one area of concern for the Government is the problem of mounting debt which has been projected at Rs. 32,000 crores working to about 27 per cent of the State Gross Domestic Product (GSDP).

With the Eleventh Finance Commission recommendations upsetting the State Planning process, as there was a shortfall in budgeted amounts due to new approach to devolution, the entire fund position had to be reviewed. In fact, there was a shortfall of abou t Rs. 738 crores due to the EFC recommendations, he said.

He said "while frequently resorting to ways and means was not correct, this is some sort of a floating debt. If the situation warrants, we have to resort to it to meet temporary fund mismatch."

In terms of revenue collections, the situation is satisfactory with 98 per cent of revenue realisation, particularly in the commercial taxes and excise segments. About 85 per cent of the total revenues are being redeployed into establishment costs and th e Government, therefore, is forced to resort to debt to take up productive activity, he observed.