AP urges FM to forward its World Bank loan proposal

The Andhra Pradesh government has urged Union finance minister P Chidambaram to forward its proposal for third structural adjustment loan (SAL) to the World Bank for the current financial year.

The World Bank officials are expected to visit the state on the issue of sanctioning the SAL once it receives a proposal from the Union government for the same.

The move is a clear indication that the state government is seriously willing to effect a mid-course correction to its free power scheme in order to qualify for SAL. It may be recalled that when the Congress was in the opposition it had been critical of SAL and the strings attached to it.

"The ball will start rolling once the Centre sends a formal proposal to the World Bank. In the meantime, the government will try to take a final decision on the proposed changes in the existing scheme," a senior state government official told Business Standard.

The details of revenue receipts to meet the budgetary expenditure, which were shown in the current annual budget, also include the structural adjustment loan.

Beside SAL, chief minister Y S Rajasekhara Reddy has also reminded the Union finance minister of the incentive grant due to the state on the fiscal reforms front.

"So far we have received about Rs 175 crore from the Centre for the performance during the years 2001-02 and 2002-03. Though the government changed in between, our fiscal performance on reduction of fiscal and revenue deficit and improvement in revenue receipts continued unaffected even in 2003-04. As the financial year is coming to an end, we have urged the Union finance minister to expedite the release of the incentive for which we are eligible. We expect to get about Rs 100 crore under this head from the Centre," a finance department official said.