CM welcomes increase in agri credit

Andhra Pradesh chief minister Y S Rajasekhara Reddy said the Union Budget showed a sense of direction further deepening the Centre's commitment to the initiatives made by the UPA government in the last two years.

Increased public sector investment and equity participation along with viability gap funding in sunrise sectors like semiconductor industry announced by Finance Minister P Chidambaram would greatly benefit the state, he felt.

While expressing satisfaction over the enhancement of credit flow to the farm sector and interest subsidy to farmers, Reddy noted that increase in budgetary allocations to the textile sector and food processing would help the state in augmenting employment opportunities in rural areas. "In a way, the more we work, the more we can gain from the provisions of Union Budget," he said.

According to the chief minister, Andhra Pradesh would gain substantially on the public sector investment front through the Rs 9,000-crore Visakhapatnam Steel Plant expansion plans, Rs 7,500 crore refinery project proposed by ONGC at Kakinada and Rs 8,000 crore chemical complex being planned by HPCL in Vizag.

This apart, over Rs 2,500 crore equity-cum-viability gap funding was expected to come to the Fab City project and around Rs 1,500 crore viability gap fund to the Hyderabad metrorail project, he said.

Funds from the Accelerated Irrigation Benefit Programme (AIBP) is expected to be reduced by about Rs 300 crore to Rs 900 crore as compared to Rs 1,200 crore being projected in the state annual budget. However, this will not have any impact as the government was getting an additional Rs 300 crore through central devolutions, the chief minister said.

However, enhancing old-age pension from Rs 75 to Rs 200 would cause a substantial burden on the state's exchequer as the state is planning to provide old-age pensions to 30 lakh people as compared to the Government of India's sanction of old-age pension to only 7.5 lakh people in the state.

In its annual budget, the state government has proposed to increase old-age pension to Rs 125 from Rs 100. The state government is now under pressure to enhance the pension amount to Rs 200 to all the 30 lakh people.