The Hindu Business Line : State Budget in for mid-course correction

Hyderabad, Nov. 19 The Andhra Pradesh Finance Minister, Mr K. Rosaiah, on Wednesday hinted at some mid-course correction of the State Budget due to lower than projected cash inflows and unprecedented impact on the real estate sector leading to lower than expected revenues.

The State Government had programmed expenditure of about Rs 1 lakh crore for 2008-09 (both plan and non-plan) and wanted to raise about Rs 12,000 crore from land sale in and around Hyderabad and other cities in the State.

However, the downturn in the real estate has impacted the State Budget. Of the Rs 12,000 crore income planned from real estate sale for the Budget, it has garnered about Rs 3,000 crore due to the slowdown.

Realty bites

The Finance Minister told Business Line that the Government is confident of meeting its targets but did not want to sell land at lower prices to meet the financial commitments.

“We will sell them only when the prices are appropriate,” he said.

“Every year, this is the time for some mid-course correction and consideration of supplementary demands. This year too is no exception. However, due to general economic slowdown, the impact is pronounced this year,” he explained.

The financial recession across the globe has meant lower than projected inflows into the country and lower investments. This has meant that the tax collections and consequent devolutions could be lower to the State.

“In such a scenario, we are evaluating various options to ensure that the committed budgetary investments are made. However, we are not looking at any new avenues to raise funds as of now,” he clarified.

“During the year, the Government has also taken up a few new social welfare measures which have added to overall finances. Therefore, we are closely monitoring the situation and take an appropriate decision,” he said.

FRBM Act

Referring to the Fiscal Responsibility and Budget Management Act, Mr Rosaiah said, “We need to conform to its stipulations as agreed by finance ministers. We do not have any plans to deviate from its objectives.

“The entire budgetary process is transparent. And if any changes are made, including supplementary demands, they will be debated before implementation.”

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