The Hindu Business Line : AP budget likely to be lower by Rs 20,000 cr

The Andhra Pradesh State budget for 2008-2009 is likely to be about Rs 80,000 crore about 20 per cent lower than Rs 1,00,000 crore announced by the Finance Minister, Mr K. Rosaiah, during the budget earlier this year.

The shrinkage is due to the general impact of slowdown and lower than projected fund flow from sale of land.

He said the State was banking on additional funds from land sale. The State Government is in the process of mobilising additional Rs 10,000 crore through market borrowings.

The State Finance Department has approached the Reserve Bank of India to allow the State to raise up to Rs 1,000 crore initially till the Central Government accords clearance to amend the Fiscal Responsibility and Budget Management (FRBM) Act.

Such an amendment will empower the State Government to raise additional funds and also bring in flexibility in terms of overall deficit cap.

According to Government sources, in spite of heavy subsidy burden and also the need to meet the requirements for the ongoing projects, the State Government has not resorted to overdraft or ways and means.

The cut in budget allocations could potentially impact several sectors including irrigation which was allocated Rs 16,500 crore.

The Government has also directed the officials concerned to assess the financial position of Maytas Properties and Maytas Infra, both promoted by the promoters of Satyam Computer Services, now in controversy.

This was necessitated due to the latest developments and fall out of concerns of financial crunch.

However, the Government has currently ruled out disturbing the contracts awarded to Maytas Infra.

More Stories on : Budget | Andhra Pradesh

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