New Delhi

April 29, 2004

CHANDRABABU NAIDU LEAVES THE STATE AT RS 50638 CRORES OUTSTANDING LIABILITIES

CENTRE CONVENES HIGH LEVEL OFFICIAL MEETING IN NEW DELHI TO DISCUSS THE FINANCIAL RESOURCES POSITION.

The Centre has convened on Friday a high power strategy meeting of senior officials with the Chief Secretary of Andhra Pradesh in New Delhi, to discuss the Financial Resources Position of Andhra Pradesh for annual plan 2004-05

Puzzle is unravelling of the outgoing TDP Government which has put Andhra Pradesh as a state of bankrupt. Telugu Desam has put the Andhra Pradesh Government outstanding liabilities as on March 2003 at Rs 50638 crores as against Rs 35651 crores in 2001 Actuals.

New thinking amongst the senior secretaries to Government of India is that so long and so far Chandrababu Naidu has been exploiting his nearness to the Prime Minister Atal Bihari Vajpayee and was getting each and everything. Now looking back, none of the officials want to take a risk.

In fact, the decision of the Centre to convene the high level meeting on Andhra Pradesh financial resources was primarily aimed at to solve major fiscal matters.

Quick remidial measures by the Planning Commission have been taken to "whitewash" the misdeeds of Chandrababu Naidu Government, says a senior official of the Planning commission.

To prove the mismanagment of the Andhra economy, Planning Commission has brought out three pages confidential notes on Sources of Financing of Andhra Pradesh
in 2003-04.

This document reveals that Planning Commission extended 61 percent of Plan Finance. But Chandrababu Naidu Government instead of raising resources on its own, to fund the state plan, indulged in reckless borrowing spree amounting to 53 percent. In effect the state economy
has gone for sixers and totally out of control and in a state of shocked bankruptcy.

Planning Commission has put eight brief points which were listed and circulated for the Friday meeting.

Rajiva Ratna Shah Secretary Planning Commission is to preside over this high level meeting in which Mohan Kanda Chief Secretary government of Andhra Pradesh and Principal finance secretary, planning secretary principal secretary information technology, commissioner of commercial
taxes chairman of Andhra Pradesh electricity board are to appriase the Planning Commission.

• Andhra Pradesh Government outstanding liabilities as on March 2003 is expected to be Rs 50638 crores as against Rs 35651 crores in 2001 Actuals.
• Aggregate Plan resources for 2004-2005 estimated to be Rs 11351 cores consisting of Andhra Pradesh own resources of Rs 5126 crores and Central Assistance of Rs 6224 crores.
• Aggregate plan resources as per latest estimate for 2003-04 of state is Rs 10028 crores.
• The tenth plan projection at constant prices is Rs 46614 crores the percentage realisation of the tenth plan is expected to be 38 per cent.
• Debt and GSDP ratio is expected to be 28 percent as against 20 percent in 1997
• Tax GSDP ration in 2001-02 revised estaimate is 7 percent as against 7.4 percent in 1997.98
• Interest payments as a percentage of revenue receipts is expected to be 31 percent in 2003-04 as against 20 percent in 1997.98
• Expenditure on wages interest and pension as percentage of Total revenue receipt is expected to be 63 percent in 2003-2004 as against 60 percent in 97-98.

Sources of financing in 2003-04 Central Assistance : 60.07 percent aggregate resources--- state Own fund (-) Minus 12.89 percent --- State's own borrowing against---97-98 actuals is 52 percent of aggregate resources as against 97-98 actuals.

The Andhra Pradesh has drawn up Medium Term Fiscal Reform Programme (MTFRP) the last release of fiscal incentive grant was Rs 173 crores.