Hyderabad, Aug 2 - Facing the spectre of first drought in six years, the Andhra Pradesh government is gearing up to tackle the situation and plans to come out with a contingency plan within a week.

Admitting that the situation is 'serious' in some districts, Finance Minister K. Rosaiah Sunday said the government would come out with a contingency plan to tackle the situation. He was talking to reporters in Guntur.

Chief Minister Y.S. Rajasekhara Reddy announced some contingency measures Saturday but a comprehensive plan would be released later as the authorities have still not lost hopes of improvement in seasonal conditions in the coming days.

The chief minister himself admitted that the situation was serious except in three districts in north coastal Andhra but he stopped short of declaring a drought.

The Rajasekhara Reddy-led government had good monsoon in each of the five years in its first term but the spectre of drought is looming large over the state in the first year of its second innings.

With about 50 percent of rainfall deficit except in three districts, the state is staring at a major drought and this has raised fears that the state's economy, already affected by the global economic slowdown, might be badly hit.

The government is concerned that the livelihood of about 3.5 million agricultural labour and others in rural areas might be hit by the drought.

However, the government is likely to formally declare drought Aug 16, when the chief minister has convened a meeting with officials to review the seasonal conditions.