The Hindu Business Line : External borrowings for balanced growth: Naidu

DEFENDING the State borrowings, including funds from external agencies, the Andhra Pradesh Chief Minister, Mr N. Chandrababu Naidu, on Friday said these funds were aimed at bringing in a balanced growth across 24 growth engines charted out by the State under its Vision 2020.

Highlighting the State Government's efforts to bring in fiscal re-engineering, covering cut in establishment costs, prioritising certain sectors for thrust and bringing in reforms in sectors such as power, Mr Naidu said this had enabled the State Government to take itself forward from the 22nd rank in 1995 to the 2nd rank, according to a recent India Today survey.

Under the Vision 2020 framework, the State had planned for an ambitious compounded annual GSDP growth of 10.3 per cent, which includes sectoral component of 5.7 per cent in the case of agriculture, 10.9 per cent in industry and 11.7 per cent in the services sector.

This will call for a massive outlay Rs 30 lakh crore. Of this, the Government sector is likely to contribute about Rs 14 lakh crore and the private sector about Rs 16 lakh crore.

Mr Naidu said since the funds needed to bring all-round development were huge, the Government decided to borrow funds for development at relatively lower interest rate and repay the interest over a 20-year term in instalments. One of the main thrust areas for fiscal management has been better expenditure management, focus expenditure on priority areas, increase in effectiveness in spending through targeting and reduction in waste.

The State debt as percentage of GSDP was 30.1 per cent in 2002-2003 as against the national estimate of 61.4 per cent of GDP during the same period. The total State debt as on 2002-2003 was estimated at Rs 50,083 crore and the funds are being deployed to bring in parity between better developed and underdeveloped parts of the State. This will yield long-term results, Mr Naidu said.

The State external borrowings are estimated at Rs 15,346 crore, wherein the loan component is Rs 8,611 crore and grant was Rs 6,753 crore, reflecting 43.95 per cent as grant. Of this, the World Bank has provided total loan of Rs 8,922 crore, DFID Rs 2,318 crore, IFAD Rs 149 crore, JBIC Rs 3,703 crore and The Netherlands Rs 272 crore.

There has been a special thrust to bring in transparency and accountability in spending money. Therefore, the budgeting has become performance-based and allocations are linked to performance indicators. Andhra Pradesh is the first State in the country to publish a draft budget and introduce public debate on budget as part of the annual fiscal exercise.

The growth rates achieved by the State are significant given the hard times the State had to face. Over the last decade, the State was witness to four drought years and one major cyclone; this has pushed back the economy to some extent.

Therefore, the accent is on making the State relatively drought proof that calls for alternative modes of farm sector growth.

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