Many new welfare-oriented schemes in populist budget; nothing substantial for power sector; no reference to Telangana in Finance Minister’s speech; irrigation allotted Rs.1,210 crore less than last year

A tax-free budget of Rs.1.61 lakh crore, tilted heavily towards populist schemes at the cost of striking the traditional balance between development and welfare of weaker sections, was presented by Finance Minister Anam Ramnarayana Reddy in the Assembly on Monday.

Considering that this is an election-eve year, the budget for 2013-14 was long on form and short on substance. This was evident from the wide disparity between the outlay for non-plan (Rs.1.09 lakh crore), an amount that is essentially spent on salaries, pensions and subsidies, and the plan allocation of Rs.52,955 crore for asset creation and new schemes.

In spite of the massive budget outlay, an amount matched by very few States, irrigation, a sector highly critical to an agrarian State like Andhra Pradesh, was allotted Rs.1,210 crore less than last year in the hope that the Centre would grant national project status for Polavaram and Pranahita-Chevella. There was nothing substantial too in the power sector to pull the State out of the morass caused by the severe shortage and rising tariffs.

Almost all the 24 new schemes listed out by the Minister in the plan budget for 2013-14 were welfare-oriented rather than focussing on infrastructure development. The government also gave allocation of Rs.1,980 crore for Hyderabad Metro Rail Project and Rs.5,395 crore for bringing Godavari and Krishna (Phase III) water to meet the drinking water requirements of the twin cities. Also, the welfare sector was chosen for significantly higher allocations with the outlay for minority welfare catapulting from Rs.488 crore this year to a whopping Rs.1,027 crore. Interestingly, in spite of the three-year-old turmoil in Telangana, the Finance Minister chose not to make any reference in his speech to setting right the regional inequalities.

That the political instability and agitations had taken a toll on the State’s economy was clear as Mr. Reddy projected a growth rate of just 5.29 per cent (at constant 2004-05 prices) in the Gross State Domestic Product, a far cry from the double-digit growth rate registered in the mid-2000s.

Interspersing his 60-minute long speech with quotes from noted economist Amartya Sen and social reformers-cum-writers like Gurazada Appa Rao and Sri Sri, Mr. Reddy described his budget as one that enshrined the priority agenda of inclusiveness of the Kiran Reddy government as never before.

To justify it, he said for the first time, the historic legislation allocating funds to SCs and STs in ratio to their population had been translated into action. Although the budget did not propose any new taxes, the estimated fiscal deficit of Rs.24,487 crore was an indication that revenue would be raised through proposals outside the budget.

The Congress government created history by presenting for the first time an agriculture action plan, though after much hype that it would be a separate budget.