Cong(I) draws attention to AP's fiscal strain

By R. J. Rajendra Prasad

HYDERABAD, APRIL 30. The Congress(I), which has been frequently focussing on the alleged ``financial mismanagement'' of Andhra Pradesh by the Telugu Desam Government since 1994, today sent a memorandum to the President, urging him to declare a ``financial emergency'' in the State, though there is no provision for such action.

It is natural for the Congress to politicise an administrative mismanagement, but the fact that the Congress Party's official spokesman, Mr. K. Rosiah, has sought such a punishment focusses public attention on the way the State Government's funds have been put to such a big strain in recent years. The State Government has drawn Rs. 7,000 crores during 1998- 99 from the Reserve Bank towards ways and means advances, for adjustment for a few days at a time, the highest amount drawn by the State in any year in the past. Mr. Rosiah's main criticism today is that the Government has stopped payment of bills for contractors worth Rs. 2,400 crores for works already executed by them. Mr. Rosiah complains that the government treasuries have not paid even the ``very urgent drawals'' because the Government directed that the bills be referred back to departments for further verification.

The Government acknowledges the financial stringency, but says that it is not as alarming as the Congress (I) makes it out to be, and certainly better than that obtaining in some of the other Opposition-ruled States. The Finance Minister, Mr. Y. Ramakrishnudu, says that the single major factor for the unsettling of the budget was the outgo of Rs. 1,700 crores during 1998-99 as a result of the implementation of the Pay Revision Commissioner's report, pushing up the State Government's outgo on salaries and pensions to Rs. 10,480 crores, out of the overall expenditure of Rs. 26,000 crores for the year.

The NGOs associations have already submitted memoranda to the Chief Minister demanding that two more instalments of DA due to them should be paid immediately. The Government spent only Rs. 50 crores for the ``deepam'' scheme, in which a one time subsidy of Rs. 1,000 is given for each woman beneficiary of a LPG connection. The drought this year has caused further strain on the economy, and the State Government's decision to increase the price of rice sold through the public distribution system to ``white card'' holders, from Rs. 3.50 to Rs. 5.50 a kg, because of the hike in issue price of rice ordered by the Government of India, has caused further distress in the rural areas.

In this context, the Government has been conducting workshops for Ministers and Secretaries to Government on zero based budgetting. By an order dated April 22, the Government asked Treasuries to admit bills which do not require Government revalidation, and which were admitted in 1999- 2000 but were not passed by March 31. The Heads of Departments were asked to appoint Special Officers at least one level higher than the drawing and disbursing officers, to inspect, verify and certify the veracity of these claims.

In another circular, the Government decided that all schemes sanctioned upto March 31 but not grounded should be treated as lapsed. Government told the Heads of Departments that there is a ``common tendency to make requests for additional budgets by Government departments. Until further resources are raised there is no possibility of allowing additional budget.''

The State's fiscal deficit is about 3.5 per cent of the Gross State Domestic Product, compared to the GOI's 6 per cent of the GDP. The State's overall debt position is also in the range of the middle level States, and does not present the picture of a State in a debt trap. That is the reason why the little advance the State is able to show in improving its economy is coming from the Information Technology sector, which has posted a net sales turnover of Rs. 1,045 crores last year without any Government investment.

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