State racing towards debt trap

hyderabad:the much-hyped andhra pradesh economic re-structuring project (aperp) being implemented by the govern-ment is leading the government into a virtual debt trap, a study of the project conducted by two ngos says. the centre for environment concerns, hyderabad, and focus on the global south-india pro-gramme of mumbai, the debt trap, instead of being a future predica-ment, has become a living reality.the report prepared by k s gopal, m thimma reddy, raghav narsalay and minar pimple, states that as early as 1996-1997, the gov-ernment had paid rs 2,257 crore to-wards debt servicing while securing a loan of rs 2,750 crore, which means that 82 per cent of the new loan went towards debt servicing only. an alarming fact to be noted is that the public debt of the government has doubled within a short span of five years. in 1993-1994, the public debt was rs 9,955.83 crore, which shot up in 1998-1999 to rs 20,430.28 crore. the government had to spend 16.78 per cent of the revenue expenditure towards debt servicing during 1998-99 alone. the report mentions that aperp, funded mostly by the world bank, envisaged a shift in the government policy from sector-specific guidelines associated with individual projects to comprehen-sive reforms with macro-economic structural changes. these structural changes are going to affect the lives of the poor which can be ascer-tained from the fact that the num-ber of beneficiaries under the sub-sidised rice scheme would be re-duced from 85 per cent to 30 per cent by the year 2001-2002. the reform process is affecting the lives of the common man adversely with an emphasis on cost recovery in higher education and tertiary hospi-tal care to about 30 per cent and 20 per cent respectively. an important recommendation of the world bank is private sector participation in health sector, which brings in the regime of user charges. the aperp during 1999-2004 also involves in restructuring of six important components that are di-rectly related to the common man. the components include district primary education programme, primary health, integrated child development, rural road up-grading and maintenance, irriga-tion rehabilitation and mainte-nance and public enterprise re-form, according to the analysis.