The first thing that our government did in 2004 was to implement a large number of programmes to immediately reach out to the farmers and other rural artisans who were in serious distress. These included waiver of the power dues of farmers, supply of seven hours free power to farmers, reschedulement of loans and interest, etc.
AP's Capital Expenditure in absolute terms is the highest for any state in the country. As private investments always grow in proportion to public investments, there was an overall spurt in investments in the state in an unprecedented manner, leading to the highest ever economic growth rate of 9.1 per cent for the five-year period 2004-09, higher than the national growth rate of 8.5 per cent for the same period.
With the revenues of the state registering a healthy growth, the government implemented a large number of welfare schemes to benefit the poorest of the poor like never before, not only in our state but in any other part of the country.
We have provided good health security to about 80 per cent of the state's population. Our women SHG programme is one of the best in the world. Half of the country's bank lending in this sector is in AP. The state has implemented a scheme for complete reimbursement of tuition fees in an unprecedented manner to benefit more than 20 lakh post-metric students belonging to BC, SC, ST and minority communities in the state.
As per the latest report of RBI on state finances for the year 2008-09, AP stood first in the country in respect of its allocation on plan expenditure, development expenditure, social sector expenditure and capital expenditure.
We have done a commendable job even in the industries sector by achieving an annual growth rate of 10 per cent, as against the country's growth rate of 8.8 per cent. Our greatest performance was, however, in agriculture.
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As against the national target of 4 per cent annual growth rate, our state achieved a very high growth rate of 6.4 per cent for the period 2004-09 — up from 3 per cent in the preceding five years. We have been supplying more than 1,500 crore units of free power annually, catering to about 60 lakh acres. We firmly believe that as long as the subsidies go towards enhancement of production and increases in rural incomes, they cannot be considered populist.
Nevertheless, we are no exception to the ongoing global economic slowdown. As per the recently revised CSO data, our state — which registered an annual GSDP growth rate of 10.08 per cent in constant terms for the four-year period 2004-08, as against a national growth rate of 8.92 per cent — has to be content with just 5.6 per cent growth rate for the year 2008-09, because of the slowdown.
Consequently, financial resources too fell sharply. As per latest estimates, revenue receipts are likely to fall short by Rs 8,000 crore from the budgeted estimates, while there will be a short-fall of Rs 10,000 crore on account of capital receipts.
This is quite a big resource gap. The enhancement of fiscal deficit eligibility to 4 per cent is a small concession. The need of the hour is to raise resources and spend it on capital asset creation (infrastructure), even if it means a little rise in inflation figures in the short run.
We cannot afford to allow our economy to get into a morass. The 13th Finance Commission should give a serious thought on how to make more resources available to states like ours which are already mid-way in the implementation of a large number of infrastructure projects. Keeping them on hold for whatever reason is not in national interest.
There are varying estimates about the gas availability in the K-G basin. RIL has already started commercialisation of gas from their D6 block. The first land fall point for the gas in K-G basin is in East Godavari District of Andhra Pradesh. It is unfortunate that our state does not get any share in the royalty or in the profit share.
We do not enjoy any priority in allocation nor in pricing. This is completely unjust. The extreme interpretation of the Constitutional provisions about the offshore resources should not be invoked to deny the people of our state their due share.
(Excerpts from the speech of Andhra Pradesh Chief Minister YS Rajasekhara Reddy at a meeting of the 13th Finance Commission on July 20, 2009)