Justice Ramakrishnam Raju,

Prof.Chaturvedi,

Sri.Ananda Babu,

Distinguished guests, ladies and gentlemen,

I am greatly honoured to be the Chief Guest at the International Conference on “Global Economic Meltdown – Challenges & Prospects” organized by Sri Ramanuja Mission Trust. I understand that we have, in this august gathering, delegates from foreign countries. It gives me great pleasure to extend a hearty and warm welcome to all of you to this historic city of Hyderabad. I sincerely wish you all a happy and fulfilling stay in our capital city.

In the passing away of our youthful and dynamic Chief Minister Dr.Y.S.Rajasekhara Reddy in an air crash on 2nd September, 2009, I have personally lost a good friend and a great leader; the country has lost one of the greatest champions of the inclusive growth. The poor people have lost their greatest benefactor. Dr Reddy was the best friend of the farmers.

Never in the history of this country, in any five years period in post-independence era, any State has ventured to implement so many developmental and welfare programmes as was done in our State during the five years period 2004-09 under the leadership of Dr.Y.S.Rajasekhara Reddy, for whom inclusive growth was an article of faith. Who could have summoned courage even to think of sanctioning 55 lakhs pensions to the old aged etc., supplying rice at two rupees a kg covering about 80% of the State’s population; supplying 1500 crore units of free power per annum to the farmers; constructing 35 lakh weaker section houses, 30 lakh more houses are under various stages of completion; reimbursing the entire tuition fees for about 25 lakh post-matric students; subsidizing interest by more than 4% per annum in respect of crop loans and 6% per annum in respect of loans to women SHGs, entailing a budgetary expenditure of over Rs.1600 crores; spending Rs.41,000 crores on the massive irrigation programme called ‘Jala Yagnam’, creating a new irrigation potential for about 15 lakh acres in a five years period.

What was impossible for even the most developed countries in the world, Dr.Reddy not only conceived but also implemented successfully the Rajiv Arogyasri Health Insurance Scheme that provides hospitalization expenses upto Rs 2 lakhs per annum per family covering about 80% of the State’s population. This has become a role model for all countries in the world and is by far the noblest initiative taken by any Government in the country. It takes atleast one more hour for me to reel out all the schemes that we implemented in the last five years.

You will be amazed to note that without increasing any tax rate, without imposing any new tax and without increasing the power tariff to any class of consumers atleast once during the last five years, our revenues have grown at 18% per annum during the last five years and as proportion to GSDP, it was the highest for any State in the country. As per RBI  report on the State finances 2008-09, AP stands first both in absolute terms and also in per capita terms in respect of all the four important parameters viz., (1) Plan Expenditure (2) Development Expenditure (3) Social Sector Expenditure and (4) Capital Expenditure.

It was Dr Reddy’s firm conviction that faster economic growth is the only remedy for faster reduction of poverty, as the revenues of the State bear a direct proportionality to its GDP.  His main focus was, therefore, to increase growth and consequently the revenues. You will be happy to note that last five years have been the most glorious years in the history of our State. Our State has not only achieved the highest economic growth rate during this period but was also able to ensure that the fruits of economic development have reached the neediest of the society.    Thanks to many bold and imaginative initiatives taken by our late Chief Minister, the State had achieved an average annual growth rate of more than 10% in GSDP in constant terms for the four years period 2004-08. Because of the impact of the global slow down, our economy too suffered and registered a slightly lower growth rate of 6% for the year 2008-09. Despite this, the average annual growth rate of our GSDP for the five years period 2004-09 was 9.1% as against the national growth rate of 8.5% and as against the average annual GSDP growth rate of 5.7% for the preceding 25 years.

Another matter of great satisfaction has been our performance in agriculture and allied activities, in which sector, in constant terms, our State achieved an average annual growth rate of 6.7% for the five years period 2004-09, as against national figure of 3% for the corresponding period. Higher growth rates in agriculture have naturally benefitted 60% of our population directly dependant on that sector. The best homage we can pay to such a great leader is by resolving to continue all the programmes initiated by him and work towards achieving his unfulfilled desire to wipe every tear from every eye.

Coming to the subject of today’s  Conference, like 11th September, the 15th September has also become a dreadful day in the recent memory of human history, as exactly a year ago, on this very day, Lehman Brothers, one of the world’s greatest financial institutions, which stood the test of time for over one and half centuries, has suddenly petitioned insolvency. It really came as a bolt from the blue, from which, thankfully, the world seems to be slowly but surely recovering. It was initially believed that the fall out could be one of the worst since the times of great depression of 1930s in United States. But unlike 1930s, the world has truly become globalised now and therefore it was expected that the consequences could be all-pervasive and will adversely impact the economies of even developing countries like ours in a large measure.

It is our good fortune to have Dr.Manmohan Singh, the world renowned economist, as our Prime Minister at this most crucial juncture. He was ably supported by experienced economists like Dr.Rangarajan and Dr.Montek Singh Ahluwalia. They have very swiftly responded to this unprecedented challenge and have deftly handled the situation, ensuring primarily that there were no major job losses in the country. The Central Government has come up with three fiscal stimulus packages in a short time of 9 months to ensure that enough liquidity is available in the system for maintaining the economic growth. The Central Government was good enough to relax FRBM conditionality permitting the States to borrow upto 3.5% of their GSDP for the year 2008-09, which has since been increased to 4%. This has gone a long way in making more funds available at a time when almost all the States including our own have suffered loss of revenues because of the impact of the global meltdown. Despite all these great and timely initiatives, the country’s economic growth has suffered a set back with a severe fall in its GDP growth rate for the year 2008-09.

After all, the economic growth is directly proportional to the level of investments. I believe, the net inflow on account of ECB during 2008-09 was only 8 billion dollars as against the previous year’s 22 billion dollars. Similarly, there was a net out flow on account of portfolio investments in the year 2008-09 to the tune of 14 billion dollars as against a net inflow of 29 billion dollars during the preceding year. Our export growth rate has fallen. Undoubtedly, we were adversely impacted, though not as much as we initially anticipated.  This only goes to prove how much the world economy now stands integrated. The Central Government and all the State Governments have a great task at their hand to delicately balance between growth and inflation.

The whole episode is a sad reminder of how human greed has once again taken the toll of the humanity and how unwilling we are to learn the lessons from the past. I sincerely hope that we will be able to tide over the present crisis and be soon back on the path of 9% GDP growth rate.

I once again thank you for the opportunity given to me.

Jai Hind.