Hyderabad, February 21: For all the talk of the AP economy being under severe strain, Chief Minister K Rosaiah on Saturday presented a revenue surplus budget for 2010-11, upping the overall spend during the next fiscal by over Rs 13,000 crore.
However, no major initiatives have been announced in the Rs 1.13-lakh-crore budget, which hints at an imminent hike in power tariff even as the government’s flagship programme, irrigation, has seen a lower allocation. That a hike in tariff is very much a possibility stems from the fact that while power utilities have been seeking over Rs 12,000 crore in financial help to bridge the gap, provision has been made for only Rs 4,500 crore as against Rs 6000 crore last year.
Rosaiah, who broke all records by presenting his 16th budget, admitted that he could not allocate more to power utilities because he had to take care of the priority sectors — irrigation and welfare.
The overall revenue surplus is expected to be mainly in the form of higher flows from Sales Tax, Excise, Motor Vehicle Tax and Stamps and Registration.
But the key to the surplus of Rs 3,548 crore lies in the government’s ability to sell lands from which it hopes to mobilise exactly the same amount.
The government has failed to sell lands during the current year owing to the general recession but is confident that its proposals would find buyers in the coming year.
New taxation proposals as the year progresses also cannot be ruled out. In fact, to a question from mediapersons, the chief minister said that it was only because the government increased taxes in the present year that he he could present a budget of this size.
Rosaiah also lost no opportunity to emphasise the “impact’’ of the ongoing Telangana statehood agitation on the economy. “AP would have done extremely well given our excellent track record and good machinery but for the trials and tribulations in the recent past.
But it is my firm belief that if we sink our differences and join hands to bring back the State on the right track, we can once more shine as a model,” Rosaiah said in his speech.
Another worrying factor is the steadily growing debt burden on the State.
The government indicated that borrowing during 2010- 2011 would be of the order of Rs 21,753 crore. With this, the accumulated debt of the State would reach a whopping Rs 1.32 lakh crore, larger than the size of the budget itself. Debt servicing alone would drain the Exchequer of Rs 10,738 crore in the new fiscal. Not surprisingly, the overall fiscal deficit during the next year is expected to be around Rs 13,000 crore. For irrigation, the outlay is Rs 15,011 crore as compared to Rs 15,481 in 2009-10.
–Agencies