The Government of Andhra Pradesh has committed itself to a policy of economic reforms and liberalization with a view to ensure higher growth rate and improvement in quality of life of its citizens.  As a part of the process Government intends to reduce the involvement of the state or the public sector in the economic activities and concentrate its efforts on Good Governance and provision of social services such as education and health care.

 

In the past, the public sector played an important role in economic development of the State.  State Level Public Enterprises (SLPEs) were set up specifically to meet felt gaps in the social and economic development, such as industrial growth, economic development of weaker sections of society, employment creation, provision of amenities, health, education, etc. The SLPEs contributed significantly to the economic and social development of the State. It is to the credit of the Public Sector, that various services like electricity, transportation, medical care; irrigation, etc have reached people in far off places. The operations of SLPEs laid the foundations for entrepreneurship and some of the well-known industrial enterprises in the State including Dr.Reddy's Labs would have not come up but for the support from the APIDC, APSFC and State Government. The SLPEs also helped the people in rural areas to upgrade skills and technology and to set up micro enterprises for self-employment. SLPEs also played a significant role in poverty alleviation programs of the Government. 

However, over the years, there has been serious deterioration in the performance of public sector, and today public sector is considered a serious drag on the economy of the State.  The SLPEs suffer from over manning and poor performance and have become a vehicle for inefficient use of financial resources of the State. As against the declining efficiency of SLPEs, private sector enterprises have emerged as an alternative force to reckon with. Today, there is no business that private sector cannot operate.  

 

Andhra Pradesh has, as on date, 40 Public Sector Enterprises. These enterprises employ approximately 3.50 lakh people, have over Rs.5242.46 Crores in paid-up share capital and over Rs.1,869 Crores in accumulated losses. There are also 73 cooperatives in which the State Government is the dominant shareholder. These include 18 sugar mills and 12 spinning mills.  The cooperatives employ over 29,000 people, have over Rs.1000 Crores in paid-up capital, and accumulated losses of over Rs.250 Crores. 

 

The gross equity investment by the State Government in the SLPEs is in the order of 4328.48 crores as at end of 1999-2000.  This constitutes about 83% of the equity capital of the SLPEs, the balance equity of RS.913.98 crores being raised from other sources, bulk of which is again from Central Government or Financial institutions.  There is negligible private investment in SLPEs.

 

The gross debt extended by Government to SLPEs stand at Rs.5387.96 crores as at the end of 1999-2000.