``The state's economy is sound and has shown marked improvement in the last four years with the per capita income crossing the national average and foreign loans being judiciously used to generate capital assets,'' Finance Minister P Ashok Gajapathiraju, party spokesman U Venkateshwarulu and general secretary C Ramachandraiah told newsmen here.

Dubbing as ``bundle of lies'' the Opposition charge that the economy was in a mess due to fiscal profligacy, mismanagement and indiscriminate borrowings, the TDP leaders reeled out figures and economic indicators on relative performance of TDP and Congress governments since 1990 and asserted that external debt was within manageable limit.

The external debt had gone up from Rs 6,125 crore in 1990 to Rs 11,670 crore in 1995, registering an increase of90 per cent during the period when Congress was in power. The debt had now reached Rs 21,321.8 crore, registering an increase of 83 per cent in the last four years, they said.

State Congress president Y S Rajasekhar Reddy had, in an open letter to Chief Minister N Chandrababu Naidu on Sunday, warned that he would approach the President, Prime Minister and the Governor to impose financial emergency since the TDP government had reduced the state from prosperity to penury in the last four years.

Congress leader K Rosaiah has alleged that the policies of the TDP government which benefitted on rich, have pushed the state into an unprecedented financial crisis.

``As of today, our debt burden is Rs 30,000 crore. The fiscal position in Andhra Pradesh is the worst-ever with the government paying Rs 4,000 crore as interest on the borrowed loans,'' he told newsmen at Vijayawada today.

However, the TDP leaders said that in sharp contrast to the ``gross misutilisation'' of World Bank funds during Congress regime,the present government was using a major chunk of these funds to improve social welfare and infrastructure sectors including primary health, education, nutrition, roads and irrigation, besides capital assets generation.

On the controversial Rs 3,320 crore World Bank-aided AP Economic Restructuring Programme (APERP), they said the TDP government had succeeded in getting a Central grant of Rs 1,321.7 crore, amounting to to 58.8 per cent of the total project cost.

``This means that the loan component is only Rs 927 crore and much of it is meant for generation of assets and human resources,'' they said.

Though World Bank loan carried an interest rate of 12 per cent, the burden on state government could be ``hypothetically put at five per cent only'' as major chunk of the funds would come as Central grant, they pointed out.

Justifying the government's decision to go in for World Bank loan, the TDP leaders said ``it is the cheapest available means of borrowing.''

Meanwhile, Congress Legislature Party(CLP) leader in Andhra Pradesh P Janardhan Reddy has demanded a judicial inquiry into the cases of land grabbing and violation of Urban Land Ceiling Act in and around Madhapur where the hi-tech city is located.