The Hindu Business Line : I've inherited a debt-trapped State: Rosaiah

"I feel sad that I have inherited a completely debt-trapped State, with adverse asset-liability ratio, lower GSDP (Gross State Domestic Product) growth rate compared to the national average, eroded Human Development Index and a State with an annual agricultural growth rate of 1.14 per cent for the last 10 years as against what was 3.19 per cent for preceding decade," the Finance Minister, Mr K. Rosaiah, lamented while presenting the Budget.

Nearly one-third of the 31-page budget speech of Mr Rosaiah was devoted to how the economy of the State was eroded during the nine-year regime of the Telugu Desam Party headed by the former Chief Minister, Mr N. Chandrababu Naidu. The Finance Minister said that he wanted to share the "facts on State finances" in his Budget speech as the new Government could not come out with a white paper on State finances, which had been the practice, due to time constraint.

Terming as "highly lopsided and fanciful" the policies of the previous Government, Mr Rosaiah said it had led the State into high level of indebtedness in less than nine years. Despite registering a very high growth rate in tax revenues, and having raised a tax amount of Rs 1,65,911.50 crore, the State suffered a huge cumulative revenue deficit of Rs 21,720.92 crore for the period. As a result, a large part of the borrowings of the State Government, essentially meant for creating new assets, had gone into meeting revenue deficit.

Consequently, he said, despite borrowings going up to the tune of Rs 57,588 crore, no major new asset had been created in the last nine years. The fact that the Government had spent only Rs 22,276.44 crore on capital expenditure bear ample testimony to the mounting unproductive expenditure of the State Government in the past decade.

From 1995, the Minister stated, no new major industrial project had come into the State, nor did the Government complete any new major irrigation project. On the other hand, many large and medium industrial units were closed down causing loss of employment to lakhs of industrial workers. The average annual growth in employment in the State during 1994-2000 had fallen to 1.1 per cent from 2.4 per cent during 1983-94.

He said that the State had slipped from 9th position to 10th position in terms of Human Development Index in 2001. The asset liability ratio of the State fell from 1.01:1 in 1995 to 0.63:1 for the year 2002-03. Considering the report of Comptroller and Auditor-General, the State, which was solvent in 1994 "is no more so." The GSDP of the State during 2002-03 has fallen to 2.43 per cent as against the national average of 4 per cent, signifying that the economic growth of the State had taken a "severe beating."

The Finance Minister said that the agricultural GSDP in the State has fallen from Rs 13,305 crore in 1994-95 to Rs 12,000 crore in 2002-03 at constant prices, clearly bringing home the point that the already low income of people engaged in agriculture had further fallen during the period of the previous Government.

The "impoverishment" of the people dependent on agriculture was the reason for the unprecedented number suicides. "The farmers in our State are truly in distress and need a healing touch immediately."

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