Economies of Telangana and Seemandhra

Economies of Telangana and Seemandhra

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The Telangana movement is a group of related political activities organized in order to support the creation of a new state of Telangana, from the existing state of Andhra Pradesh in South India. Telangana, the new state proposed corresponds to the Telugu-speaking portions of the princely state of Hyderabad (in pre-independent India). On 30 July 2013, the Congress Working Committee approved a motion for a separate Telangana to the central government.

The process of converting Telangana to be the 29th state of India with 10 Districts is expected to be completed in 4–5 months once the Parliament passes the Act. Hyderabad will be the joint capital of Andhra Pradesh and Telangana for 10 years.

In the following blog post, I will be discussing the impact this division will have on the economy of Telangana and Seemandhra.
Literacy in Andhra Pradesh in general, Telangana in particular: Andhra Pradesh, which has a literacy rate of 67.7 percent ranks among the least literate states of India. It ranks 26th in the country out of 31 states and Union Territories. It is the most backward state in Southern India. As many as eight districts of Telangana out of 10 (including Hyderabad) figure among the most backward educationally. Mahbubnagar has the least literacy rate, both among males (40.8 per cent) and females (18 percent). The entire Telangana, except Hyderabad city and Ranga Reddy Urban areas which are Hyderabad, has lagged behind educationally. Not a single mandal of Telangana has the national literacy rate of 74.04 percent. Coastal Andhra districts account for 33 out of 45 rural mandals which exceeds the national literacy rate (the rest being Rayalaseema).

The mandals with lowest literacy rate of less than 20 percent are more in Telangana, as a consequence: 35 such mandals are in Telangana, almost three times those in Coastal Andhra (14). There are only two such mandals in Rayalaseema. District-wise, Adilabad has most of these mandals (14), followed by Mahbubnagar (9), Medak (6), Khammam (3) and Nizamabad, Karimnagar and Nalgonda (one each).

Although Telangana accounts for half of the state’s population, less than 25 percent of educational institutions from primary to college level are
situated in the region. Only 15 percent of aided junior colleges are in Telangana while it has only two medical colleges. As many as six medical colleges are in the other areas. Only 26 out of the 72 government ITIs, 20 of the 91 polytechnic colleges are in Telangana. Of the total expenditure of Rs. 1150.2 crore the state has incurred on the aided degree colleges since 1956, coastal Andhra has the lion’s share of 73.71 percent while Telangana got a paltry 10.43 percent. The corresponding share of the two regions in the expenditure incurred on the aided junior colleges is 62.71 percent and 9.45 percent, respectively.

Analysis & Inference:
These numbers taken from Telangana.org clearly indicate that Telangana region is far behind in terms of the educational infrastructure available, whereas the Seemandhra region has a welldeveloped educational infrastructure. It also indicates that once separated, Telangana will have to

invest huge amounts of capital for the infrastructure. While Seemandhra will have to invest huge amounts in building a new capital, it is not urgent as Hyderabad is available for the next 10 years. This indicates that in terms of educational infrastructure, Seemandhra is the clear winner and is expected to fare better then Telangana for a few decades to come. Irrigation and river water distribution:

Of the three regions of the state, Telangana has the largest area, with 11,48,000 sq. km, followed by coastal Andhra with 9,28,000 sq. km. The cultivable area is estimated at 64,02,358 hectares in Telangana and 46,33,304 hectares in the Coastal Andhra. But 13,12,795 hectares or 28.33 percent of the cultivable land in the Coastal Andhra is being irrigated under canal irrigation system, whereas 2,66,964 hectares or 4.17 percent of the cultivable land in Telangana is receiving canal waters.

The entitlement of Telangana of waters of Krishna and Godavari rivers is 975 tmc. Ft. In 1974, 800 tmc.ft water was allotted to AP by the Bachawat Award to Andhra Pradesh. A re-distribution of this in 1981 saw coastal Andhra getting the major share with 377.07 tmc, Telangana 266.783 tmc and Rayalaseema 123 tmc. Telangana’s share in Godavari waters is 709 tmc.ft of the state’s total
allotment of 1,495 tmc.ft. Out of its total share 1153.50 tmc (from all sources) barely 380 tmc is used for irrigation.

The amount spent for irrigation purpose in Telangana so far is Rs. 4005 crores while that spent in Coastal Andhra is Rs. 19,693.50 crores, nearly five times higher. In terms of percentage, while Telangana got a mere 15.5 percent, coastal Andhra got 76 percent. If the principle of expenditure proportionate to cultivable area were to be followed (as it should be), Telangana, with 44.28 percent cultivable area should have got an equivalent amount and coastal Andhra 32.04 percent. Instead, coastal Andhra got more than twice its share. Since 1956 to date, the additional irrigation potential created in Telangana is only 5 percent since none of the planned irrigation projects have been completed although they were planned 30-40 years ago. The 12 projects sanctioned for Telangana at an estimated cost Rs. 5,449.53 crore to provide for 10.08 lakh hectares have been progressing at snail’s pace for decades.

Analysis & inference:
Again, as the numbers indicate, Seemandhra comes out as the clear winner of the two. But the question needs to be asked – is development of Telangana being hampered due to the bias of the Andhra Pradesh govt. or is it due to the inefficiency of the ministers and the govt. bodies in implementing the measures suggested. One might be forced to point to the example of Sriram Sagar Project. This project which was commissioned in 1963 is yet to be completed – with the first stage of the project taking as long as 33 years for completion. Such inefficiencies do make us point the finger at the corrupt governing bodies in Telangana. Which of the two versions are true can only be judged when the inevitable division does happen and the future development of the two states is tracked.

The statistics also indicate that a huge riot will happen when the division does occur in terms of the river water distribution. This could have a huge negative impact on the development of Seemandhra as all the major rivers in the state flow from the Telangana region to Seemandhra region. Telangana region could exert more control over the waters citing the land area and
developmental issues, thus starving the other region of the water share it used to enjoy in the past. Telangana might as well look at this as “justice” or “revenge” for years of “discrimination” whose root causes are yet to be explored.

Industrial development & employment in govt. and industries: Industrialization of Telangana has been restricted to the Hyderabad city and Ranga Reddy district due to their physical proximity to the seat of the government. Industries in other parts of Telangana did not take off other than those set up prior to 1956.

Several industries in Telangana have been allowed to become sick with government refusing to help out to restore them. Today, more and more PSUs such as Allwyn Auto and Republic Forge, located in Telangana are being closed down by the government for various reasons. Those threatened include Antargoan and Sirpur Sirsilk Mills. Others in the line for closure are Nizams Sugar factory, FCI at Godavarikhani and Miryalguda Sugar Mill.

According to data, a major chunk of the existing medium and major industrial units in Telangana are owned by people from coastal Andhra. Of the 10,000 odd units located in Telangana, only 1250 units are owned by the native Telanganites. Coastal Andhra industrialists own 6000 units and the rest are owned by outsiders from different parts of the country. Employment:

Daily Wages Workers in various Factories – 1996 – Wages (Average) Region

Number Percentage

Coastal Andhra 3,16,321 67.7
Rayalaseema

69,1675 14.9

Telangana

81,095

17.4

Source: Telangana.org
Employment in State Government Sector as on 30-6-1983
Region

Gazetted N G O’s Class IV Contingency

Total

Andhra Districts 15,278

2,23,256 1,10,058 21,672

3,33,900

Telangana

1,09,427 27,146

13,801

1,68,327

44,703

1,168

74,038

7,717

Hyderabad City 5,149

22,448

Source: Telangana.org
In the words of Telangana.org: “The entire government and its various departments are dominated by people of Coastal Andhra. This pattern has been a blatant violation of agreement to share government jobs between Andhra and Telangana in the ratio of 2:1. Out of 14 lakh jobs in the government today (1997 figures), Telangana’s share has been barely two lakhs and these too are in lower levels. Similarly, of the 531 judicial officers, only 92 belong to the region. Of the 22 judges in the state high court, there are only two representing Telangana. Moreover, no one from Telangana could become the advocate-general since the state was formed in 1956. On the educational front, of the 96,031 primary teachers, only 15,921 belong to Telangana. All the top

and middle level jobs cornered by Andhra people: there’s not a single secretary in the government today belonging to Telangana. Out of 140 heads of department in the government barring a handful, all are from Coastal Andhra. Public and private undertakings, autonomous bodies, corporations and universities have been made the monopoly of Andhras.

Rules have been twisted, manipulated or simply ignored to ensure government jobs went to those from coastal Andhra and to keep out Telangana people. The present trend is to keep out the Telangana people even from the posts of peons, bus conductors and drivers. The new recruits are all brought over from coastal districts. This strategy has been adopted since 1956 despite agreements entered into, working out the procedure and share. For instance, in 1966, all of the 70,000 vacancies, of which 90 percent went to the people of Andhra.

The latest example is that of recruitment of more than 200 munisif magistrates, the highest post under direct recruitment. In course of time, they will become district and high court judges. Evidently, with an eye on capturing these crucial posts, the procedure has been changed, more centers of examinations opened in coastal Andhra towns, and it was ensured that an overwhelming majority of examiners chosen belong to Coastal Andhra: 50 of 55 judgesexaminers were Andhras. The written examination was held on February 23, 1997. The results were predictable: 68 candidates (80 percent of them
from Andhra region) passed from Hyderabad; Warangal (the only center in Telangana) was only 15. Visakapatnam accounted for 85, Vijaywada 75 and Tirupati 47 successful candidates. Only 30 candidates out of 290 called for interview are from Telangana.”

Central Government Industries
After 1947, the Government of India undertook an extensive industrialization program all over the country. The establishment of BHEL, ECIL, IDPL, IDL, HMT, etc., formed a part of this agenda. However, in defiance of the Gentlemen’s Agreement, these industries recruited 90 per cent employees from non-Telangana regions. Of the remaining 10 per cent, the employees were predominantly in the lower order occupational categories like sweepers, watchmen, security guards and they belonged to Telangana.

It may be mentioned here that the Central Government initiatives, instead of ensuring equitable growth and fair development, exacerbated the inequalities. The ancillary industries that developed in and around these major industrial units exclusively belonged to the settlers and employed migrants. Some claims include unwritten rules including co-opting the few educated Telangana administrators and rejecting deserving Telangana applicants.

Some more employment statistics:
Employment in Nationalised Banks in Andhra Pradesh – 1996 -1997 Regions

Employment

Total Percentage

1.Coastal Andhra

42,000

70

2.Rayalaseema

5,000

9

3. Telangana

7,000

11*

4. Non-A.P.

6,000

10

Total

60,000

100

*includes second generation settlers. Source: Survey Data
Employment in Ambedkar Open University. Hyderabad, 1996 -1997 Employment

Coastal Andhra

Rayalaseema

Telangana

Total

1. Teaching

23

4

18

45

2.Administrative

15

4

12

31

3. Technical

21

3

24

Total

59

8

33

100

Employment structure in APSRTC – 1997
Regions

No. of Employees

%

Coastal Andhra

16250

65

Rayalaseema

3750

15

Telangana

5000

20

Total

25000

100

Source: Fieldwork, APSRTC, 1997
Analysis & Inference:
The data clearly indicates that the no. of Telangana people in the various jobs is very less when compared to the Seemandhra region. This could also be due to the fact that literacy is very poor in Telangana when compared to Seemandhra. How this type of employment statistics will affect the future development of the two states depends on the policies they adopt once they are formed. Reservation of seats for the people of Telangana in Telangana is to be expected and the govt. may try to throw out the people from the other region either slowly or in one shot.

How these events will unfold will have a huge impact on the development of the two states. Any aggressive policy adopted by the future Telangana govt. might lead to a civil riot which will hamper the development of the state. As of now, if Telangana were to adopt an aggressive strategy, both states’ economies will be affected deeply. But if a more diplomatic strategy is adopted, then it could lead to a very good development of Telangana as lots of new job opportunities will be created for the future generations. Seemandhra, which is yet to establish a capital will have to create sufficient job opportunities so that its educated youth do not suffer. Conclusion – Economic pros & cons from a neutral perspective: (Data source: Business Line)

Will the two states which will be formed after the splitting of Andhra Pradesh have economic stability? If you go by the report of Justice BN Srikrishna Committee, which studied the situation in the state, there is no problem on this front.

“Telangana as a new state can sustain itself both with and without Hyderabad. The other combination of regions – coastal Andhra and Rayalaseema — together can also sustain themselves as a state; in fact they can sustain themselves separately,” the committee remarked in its 505-page report.

At present, in terms of land area, Ap is the fourth largest state and fifth largest in population. It is ranked third in absolute size of gross domestic product (GDP) and 11th in the country in terms of per capita income. Gross state domestic product in 2011-12 was estimated at Rs 6,76,234 crore.

The Telangana region (excluding Hyderabad) ranks 15th in the list of 28 states in terms of absolute GDP and is listed above the states of Chhattisgarh, Jharkhand, Uttarakhand, Himachal Pradesh Goa and all northeastern states. Telangana (including Hyderabad) ranks 13th in GDP as well as in per capita terms.

Similarly, coastal Andhra ranks 13th in terms of GDP and 10th in terms of per capita GDP. The relatively deprived region of AP is Rayalaseema; but it ranks just a notch below the all-India average in per capita income and its overall GDP is higher than Uttarakhand, Himachal Pradesh, Goa and northeastern states except Assam.

Nevertheless, Hyderabad, with large concentration of economic activity, is going to be the bone of contention between Telangana and Seemandhra (Andhra-Rayalaseema). The city accounts for more than 50% of the state’s own tax revenues.

In 2012-13, the state’s own tax revenues reportedly stood at Rs 69,146 crore. Of this, Rs 36,400 crore came from Hyderabad and its surrounding Rangareddy district. The revenue from rest of Telangana was Rs 11,207 crore, Andhra Rs 16,729 crore and Rayalaseema Rs 4,810 crore. According to the Srikrishna Committee, Hyderabad accounts for 99% of the total of around Rs 55,000 crore IT and ITeS exports from the state. Of the 72 notified special economic zones (SEZs) in the state, 37 are located in Hyderabad and Rangareddy. In fact, Hyderabad and Rangareddy districts account for 44% of the registered manufacturing and 39% of the construction activity of the Telangana region.

Other than Hyderabad, Rangareddy and the adjoining Medak and Nalgonda, manufacturing activity in Telangana has not seen much progress. The hinterland’s mainstay is mining, poultry, food processing, dairy and farming. The state-owned Singareni Collieries is located in the region. With an international airport, world-class educational and scientific institutions, a growing industry and the upcoming Rs 16,500-crore metro rail project, central location and suitable weather, experts say Hyderabad will now grow on its own. But if there has to be all-round progress across the
region, the people in power have to ensure the development of the districts particularly Warangal, Adilabad, Karimnagar and Nizamabad, which are at a distance of 150 km and above from the city.

If Hyderabad is endowed with a modern airport, coastal Andhra has state-of-the-art seaports at Krishnapatnam, Kakinada and Visakhapatnam. While the Rs 7,300-crore Krishnapatnam is the largest private sector port on the east coast, Gangavaram in Visakhapatnam is a multipurpose all-

weather deepest private port. Besides, Seemandhra (Andhra-Rayalaseema) has four airports at Tirupati, Vijayawada, Rajahmundry and Visakhapatnam.
The Chennai-Bangalore industrial corridor passes through Chittoor district, which is in Rayalaseema. The district also boasts having Sri City, the largest SEZ in the state that is attracting investments from many multinational companies. Nellore, on the other hand, is set to emerge as the largest power producer in the state with several power projects proposed to be set up in the district.

A Petroleum, Chemical and Petrochemicals Investment Region are coming up in the Visakhapatnam-Kakinada region in an extent of Rs 604 acres. Apart from a steel plant, Visakhapatnam has a pharma city where several pharmaceutical units are located. On the other hand, Krishna, Guntur, East and West Godavari districts, which are endowed with good irrigation facilities, are known as the rice bowl of India.

One of the negative factors with regards to bifurcation, according to the Srikrishna Committee, is that the land locked region of Telangana may lose out on access and opportunities to eastern coastline, which has major ports. Similarly, Seemandhra could lose a major market inherent in the huge population, business and market concentration of the city of Hyderabad.
So in conclusion the major question in the development race between Telangana and Seemandhra is where will Hyderabad go? As of now, it seems like Telangana will win the race for Hyderabad. But a lot can happen in ten years. Or Seemandhra, which has its own revenue generation points like Tirupati and Vishakhapatnam, might end up winning the development race
without Hyderabad. What will actually happen is yet to be seen.

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