Fresh burden sends Naidu into a tizzy

Fresh burden sends Naidu into a tizzy
EXPRESS NEWS SERVICE

HYDERABAD, MARCH 1: Andhra Pradesh Chief Minister N Chandrababu Naidu is extremely unhappy with the twin budget proposals - increase in the issue price of rice and hike in the price of urea - which will result in an additional burden of Rs 700 crore on the State Exchequer.

The hike in the issue price of rice will mean that the state government's burden on the subsidised rice scheme will go up to Rs 1,700 crore per annum (as subsidy) against the Rs 1,130 crore at present.

"Both the decisions will severely affect the poorer sections of society and the farmers. Moreover, the hike will place a relatively bigger burden on the states which have an extensive public distribution system," Chandrababu Naidu, an important ally of the BJP, said in his reaction to the proposals in the Union budget.

The increase in the price of urea, which is expected to be around Rs 50 per bag, will put an additional burden of Rs 200 crore on the farmers of the State.

The AP government requires as much as 23 lakh tonnes of rice every year for its subsidised rice programme under which it is supplied at the rate of Rs 3.50 per kg to almost 1.13 crore families. Till now, the Centre's issue price was Rs 3.50 per kg for Below the Poverty Line (BPL) families and Rs 9.05 for Above Poverty Line (APL) families.

As per the budget proposals, which will take effect from April 1, the issue price under BPL category is expected to go up to Rs 6 per kg and to Rs 12 in respect of APL. Going by the Lakdawala recommendations, the Centre had been supplying rice under the BPL category for only 50 lakh families in the State whereas the state's rice scheme covers more than double the number.

Though the Finance Minister said that the supply to BPL category would be increased from the existing 10 kg to 20 kg, the benefit is neutralised because of the hike in the price. In any case, it matters little for the State government which is, even now, buying rice at the APL rate and supplying it at a lesser price for BPL families.

On the other proposals made in the budget, the chief minister welcomed the exemptions given to the Information Technology industry and telecom sector, which are expected to significantly boost the growth of IT in the State.

Appreciating the thrust given to the rural development sector, particularly key areas like education, health, drinking water, rural roads and housing, Naidu hailed the increase in the target of self-help groups from 50,000 to 1,00,000 for micro-financing by Nabard.

But, he said the surcharge on Income Tax and the additional cess on petrol would enhance the revenues of the Central Government while not adding anything to the states' kitty. "They should have taken measures for increasing revenue in such a way that the states will also benefit," the chief minister said in a press release.