Hyderabad, May 14: Within minutes of taking over as the state’s 14th chief minister, Y.S. Rajasekhar Reddy made Andhra Pradesh poorer by Rs 1,636 crore.
The first file Reddy signed after being sworn in this afternoon declared free power for farmers, the main election plank of the Congress which stormed back to power after 15 years in the cold.
The move will cost the exchequer Rs 436 crore this fiscal. In another populist gesture, the 55-year-old doctor-turned-politician waived power dues of farmers to the tune of Rs 1,200 crore.
The benevolence has come at a time when the state is reeling under a debt burden of Rs 57,574 crore and grappling with a fiscal deficit of Rs 7,338 crore. They marked the return of populism in Andhra, where the late .T. Rama Rao, as chief minister, had launched a cheap rice programme by which people living below the poverty line could buy rice at Rs 2 a kg.
. Chandrababu Naidu, who toppled NTR and ruled the state for nine years before being swept out in last month’s polls, persisted with the scheme but could not sustain it. His Telugu Desam regime was forced to more than double the price to Rs 5.50 a kg in the mid-nineties.
The Desam said the new government’s measures will be a big drain on the exchequer. “We like to caution the Congress government that free farm power will be counter-productive,” said a party spokesperson.
Industry said it had no problem with the government’s move, but added that as long as the state picked up the subsidy bill, the new regime could dole out any kind of sops. “However, such a blanket relief to a single sector will not augur well for the economy,” said a spokesperson of the Confederation of Indian Industry.
Farmers’ associations welcomed the announcement and pointed out that the Desam regime had been providing 80 per cent subsidy to the sector at a cost of Rs 2,600 crore. “Lobbies do not bother about the Rs 3,600 crore annually lost by the government in its advances to major industries. Always a hue and cry is raised only when farmers’ interests are protected,” said activist P. Changal Reddy.
There is also a burden of Rs 800 crore for power purchased for Rabi crops last summer. “With the present announcement, the whopping liability of the state government towards the power utility will be Rs 6,100 crore,” said a spokesman of the state power utility, APTRANSCO.
Reddy hit out at critics of his free power policy, saying it should not be viewed in isolation, as the move would go a long way in reviving agriculture and allied sectors.
Asked how his government would find money to bear the cost of supplying free power to farmers, Reddy said: “Where there is a will, there is a way.”
He said the previous government spent over Rs 350 crore annually on publicity. “We do not need much publicity. We will put the public funds to proper use.” He said his government would “review” all power purchase agreements with private generators to “reduce the cost of power to the public”.
The chief minister told reporters he had asked officials to assess the feasibility of providing one free bulb to every family below the poverty line. “We will work out the scheme soon.”
After his swearing-in, Reddy said his government would compensate families of farmers who committed suicide after their crop failed because of consecutive droughts. “We will soon introduce a proper and effective programme for providing work to the landless and the poor in place of Janmabhoomi (community development scheme) of the Desam,” he added.
As scheduled, Reddy was sworn in by governor S.S. Barnala at the Lal Bahadur Stadium. “I will form the complete cabinet within a week,” the chief minister said.
Three micro-light aircraft hovered over the stadium during the oath-taking and showered flowers and pamphlets. Earlier, Reddy went around the stadium in an open jeep and greeted the 35,000-strong crowd that had gathered.
His wife, Vijaylakshmi, three grandchildren and long-time assistant Suridu accompanied him on the dais.