Budget proposal to hike financial aid to states welcomed; boost to AP economy likely

Vijayawada: The Centre’s promise in the Union Budget to hike financial assistance to states for capital investment, of the order of one lakh crore for 2022-23 from the revised offer of Rs 15,000 crore this fiscal, is expected to be of help to funds-starved AP in a big way to boost its economy.

Though the budget has not mentioned any major allocation for any scheme or project specific for AP, finance minister Nirmala Sitharaman’s proposal to enlarge the financial assistance to the states raises the confidence of AP government.

The funds can be used for works related to the PM GhatiShakti and other productive capital investment as also for funding priority segments of PM Gram Sadak Yojana, digitisation of economy including digital payments and completion of optical fibre cable network apart from implementation of reforms related to building bylaws, town planning scheme etc.

This apart, AP welcomes the Centre’s proposal to allow states have a fiscal deficit of four per cent of the GSDP of which 0.5 per cent will be tied to power sector reforms in the new fiscal.

As the Union Budget hints at a reduction in import duty on certain inputs for shrimp culture to promote its exports, AP benefit from this as it does a lion’s share in export of shrimps to overseas and the culturing is active in the coastline from Kakinada to Gudur.

Shrimp exporter Ramesh Babu said, “As we import mainly aerators from Singapore and live shrimp brooders from the US, reduction on import duty on them will help us promote shrimps export mainly to the US and other countries. This helps the country earn foreign exchange.”

The proposed reforms in customs administration of special economic zones to make them fully IT-driven and to make them function on the Customs national portal will help ease the doing of business for SEZ units. This will help AP while this reform comes into force from Sept. 30.

With regard to MSMEs, the Centre proposes to extend Emergency Credit Line Guarantee Scheme, Upa, to March, 2023; audits guarantee cover will be expanded by Rs 50,000 to take the total cover to Rs 5 lakh crore to benefit mainly the hospitality and related enterprises being run by micro and small enterprises.

The Credit Guarantee Trust for Micro and Small Enterprises scheme proposed to be revamped to infuse funds. This will facilitate additional credit of Rs 2 lakh crore to expand employment opportunities. The Centre also proposes to roll out a Raising and Accelerating MSME Performance Programme with an outlay of Rs 6,000 crore for five years.

The federation of small and medium enterprises national president APK Reddy said, “There is nothing much encouraging for MSMEs in the budget. However, we appeal to the Centre to protect the existing industrial units, liberalise bank loans irrespective of their NPA status and annual turnover, allow delayed loan repayments and sanction bridge loans and set up more industrial clusters to support them. This apart, the Centre may also give a boost to manufacturing sector in the state by incorporating changes in the budget proposals.”

The budget mentions finalisation of draft detailed project reports (DPRs) for linking Godavari-Krishna, Krisna-Pennar and Pennar-Cauvery and promises support for their implementation once a consensus is reached among beneficiary states.

IMA AP branch president Dr Srinivasa Raju said, “The Centre’s allocation of 2.5 per cent national GDP for health care is inadequate and no lesson is learnt despite all of us facing trouble to deal with the Covid pandemic. There is a need for more funds allocation to prepare the nation for future health risks from pandemics.”

Moreover, except for an offer for finalisation of draft DRPs for interlinking of rivers, there is no mention about AP’s pleas for Special Status, the much-awaited railway zone and allocation of funds for the Polavaram irrigation project in the Union Budget.