Eight Years Of Telangana: The Hits, The Misses, And The Challenges Ahead

by Gampa Sai Datta - Jun 2, 2022 07:28 PM +05:30 IST
Eight Years Of Telangana: The Hits, The Misses, And The Challenges Ahead Telangana
Snapshot
  • To fuel the next growth cycle, Telangana must focus on spreading Hyderabad's prosperity towards its interiors, building world-class infrastructure and decreasing the cost of doing business.

On June 2nd, 2014, Telangana State was formed by dividing Andhra Pradesh after a prolonged struggle for a separate State.

Unlike the new States, which typically face 'capital' crunch in terms of both city and money, Telangana was formed with the well developed mega city of Hyderabad as its capital. It positioned the new State financially on better terms.

The first Chief Minister (CM) of Telangana, K Chandrashekar Rao (KCR), who led the latter phase of the Telangana movement with 'Neellu, Nidhulu and Niyamakalu' (Water, Funds and Jobs) used the available financial resources to fulfil his poll promises and some objectives of the struggle for a separate State.

The main achievements of Telangana as a separate State can be broadly classified under the headings 'Economy', 'Electricity' and 'Empowerment'.

Economy

Telangana has consistently recorded high GDP growth in the last eight years on the economic front. Its GDP growth at constant prices (2011-12) increased from 6.8 per cent in 2014-15 to 11.2 per cent in 2021-22, and the youngest State's contribution to India's GDP at Current Prices raised from 4.1 per cent to 4.9 per cent between 2014-15 and 2021-22.

In these eight years, Telangana's GSDP at current prices has more than doubled from Rs 5.1 lakh crore to Rs 11.6 lakh crore.

Similarly, the state's Per Capita Income (PCI) at Current Prices has more than doubled from Rs 1,24,104 in 2014-15 to Rs 2,78,833 in 2021-22. In comparison, the all India PCI at Current Prices has not even doubled in this period.

Also, the share of the agriculture and allied sectors in the total Gross State Value Added (GSVA) of the State increased from 16.3 per cent in 2014-15 to 18.3 per cent in 2021-22.

The development of agriculture is crucial for Telangana as the sector employs 48.4 per cent of the state's population.

But challenges like regional inequality in growth and attracting investments remain in Telangana. For example, between 2015 to January 2022, districts like Sangareddy and Rangareddy attracted investments of over Rs 16,000 crore in the industrial sector, but districts like Mulugu and Adilabad have not received even Rs 100 crore as investments.

Electricity

An increase in 'Electricity' production is one of the state's significant achievements. Telangana is a semi-arid and plateau region with rivers like Godavari and Krishna flowing at a much lower surface level than most of the state, making the state's agriculture sector dependent on borewells.

The State government's move to provide 24-hour free electricity to farmers offered respite. To implement this, the State government has primarily focused on the power sector in its initial years.

Telangana used to experience a peak demand shortage of 2,700 MW and a load relief of 4-8 hours at the time of its formation in 2014. Also, industries in the State had to experience two power holidays a week.

The State government's focus and the union government's cooperation led to the installed capacity of power in Telangana increasing from 9,470 MW in 2014-15 to 17,218 MW in 2020-21.

With this, Telangana has emerged as the only state to supply 24x7 free power to 25.92 lakh agricultural consumers and uninterrupted supply to both industrial and service sectors.

From 2014-15, the State government has incurred an expenditure of Rs 39,200 crore on subsidies to the agriculture sector for the free power supply. At the all India level, Telangana consumes the highest percentage (41.25 per cent) of electricity for agriculture purposes (24077 GWh out of total energy sold of 58,365 GWh).

But this primacy of agriculture in the power sector fuelled by subsidies could become an irrevocable burden on the state finance in the long run.

Also, the dominance of thermal power (55 per cent) is not such a progressive factor. The share of Renewable Energy in the total Installed Capacity of Telangana is 22 per cent (lowest in southern Indian states), while it is 65 per cent in neighbouring Karnataka.

Empowerment

Since 2014, the reorganisation of administration by increasing the number of districts from 10 to 33 has brought the seats of power nearer to the public. This move coupled with consistently high economic growth, has helped increase land prices throughout the state.

Many efforts by the state government, like agriculture investment support of Rs 10,000 per acre each year, under the Rythu Bandhu scheme, to 63 lakh beneficiaries; increase in overall gross irrigated area from 62.48 lakh acres (in 2014-15) to 136.86 lakh acres (in 2020-21) by commissioning and completion of irrigation schemes and projects like Kaleshwaram Lift Irrigation project, renovation of 27,665 minor irrigation tanks and water bodies under 'Mission Kakatiya,' etc. has economically empowered the agriculture-dependent rural Telangana.

The introduction of initiatives such as TS iPASS to provide clearances to all projects within 30 days has empowered entrepreneurs in the state. Between 2014-15 and 2021-22, 18,761 proposals with an investment of Rs.2,26,806 crore were approved under TS iPASS.

The empowerment of youth by increasing job opportunities is another achievement since the formation of Telangana. For example, in the IT sector alone, jobs have increased from 3.7 lakh to 6.28 lakh between 2014-15 and 2020-21.

Under Mission Bhagiratha, launched in 2016, the Telangana government provided tap water to every household in 23,890 rural and 121 urban habitations. According to the centre's Jal Jeevan Mission data, households with functional tap connections are 100 per cent in the state. This mission has empowered women to some extent by decreasing their effort to procure water for their households.

But the challenges like rising income inequality, allegations of concentration of power and failure to increase government job recruitment which is one of the main demands of the Telangana movement, are derailing the progress on this front.

Kaleshwaram Lift Irrigation project (Photo: YSR/Twitter)
Kaleshwaram Lift Irrigation project (Photo: YSR/Twitter)

Challenges And Need For New Direction

As understood from the above information, the KCR-led Telangana state government has given utmost importance to the agriculture and irrigation sector since the formation of the State.

The increasing subsidies provided by the State and rising debt burden have raised questions about the development model, particularly after the Sri Lankan economic crisis.

Thus the youngest State of India, despite its many achievements in the last eight years, needs a new direction with new priorities.

For example, Telangana lacks regional level infrastructure facilities like expressways. Also, mass public transportation for Hyderabad, like metro rail, has not seen any expansion.

While relatively poorer states like Uttar Pradesh are implementing numerous expressway projects crisscrossing the northern State, Telangana, even with the required financial capacity, has not built even one kilometre of new expressway in the last eight years.

Construction of expressways would help trickle down the development and wealth concentrated around Hyderabad mega-city towards the interior districts.

Similarly, in Hyderabad, the Strategic Road Development Programme (SRDP) focuses on building flyovers and roads. While other mega cities like Delhi, Bengaluru and Chennai are rapidly expanding their metro rail connectivity, Hyderabad Metro Rail (HMR) is limited to 69 km, with phase II still in the planning stage for just 31 km.

Though the services and industries sector remains the dominant sector in Telangana's economy with a share of 61 and 20.4 per cent, respectively, in the Gross State Value Added (GSVA at current prices in 2021-22), it has not received the priority it needs.

Hyderabad mega city and its surrounding areas are the engine of Telangana's economy and fuel for the state's exchequer.

For example, IT exports from Hyderabad increased from Rs 66,276 crore to Rs 1.4 lakh crore in the last eight years. But it is nowhere near Bengaluru, which recorded IT exports of 4.5 lakh crore.

Thus instead of getting complacent about its wealth creation since its formation, Telangana must continue its efforts to excel. Any lack of frugality and misplaced priorities for short term political gains would hamper the long term growth of the state amidst increasing competition among Indian states and cities across the world.

To fuel the next growth cycle, Telangana must focus on spreading Hyderabad's prosperity towards its interiors, building world-class infrastructure and decreasing the cost of doing business.

Rapidly expanding mass transit systems like the metro in Hyderabad and taking up RRTS (Regional Rapid Transit System) projects similar to Delhi NCR to connect Hyderabad with the remaining urban centres in the state could be some ways to achieve it.

Telangana has the financial capacity, and the need is of political will. Thus the ball is in CM KCR's court.

Gampa Sai Datta covers infrastructure issues for Swarajya and India Infra Hub. He is specialised in Urban Policy and Governance from Tata Institute of Social Sciences (TISS), Mumbai.
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