Two years of Telangana: Radiating growth after fission

Belying dire predictions on security and capital flight, the K C Rao govt has had an impressive performance on law & order, state finances, water and road projects

India's youngest state of Telangana was in the news last month when Tim Cook, global chief executive of Apple, the iconic information technology (IT) company, came here to launch the company's first development centre outside America.

Ready numbers of skilled personnel, clutter-free infrastructure and the presence of global IT companies such as Microsoft and Google helped the choice of this city. And, the pro-active role of the state government has been cited as an equally important factor, in convincing the Apple leadership.

Completing two years of statehood, Telangana has steered clear of all the pre-bifurcation rhetoric that was built around the possible downside of being a separate state.

This in itself is an achievement. Helped in good measure by the Chandrashekar Rao government's record on law and order, managing the power supply and creating a positive investor perception, say observers.

As the new state emerged out of the initial uncertainties, the leadership was able to confidently negotiate with sibling Andhra Pradesh and with the central government on matters involving the state's interests, instead of posturing or fighting with Andhra Pradesh and the Centre in the second year.

Prior to the bifurcation the combined state had a severe power shortage. The then government had imposed power holidays on the industrial sector for the three years prior to bifurcation. There was a view that the situation might worsen in Telangana, if separated, as the region has a huge mismatch between consumption and generation.

However, since June 2014, the new state has witnessed two scorching summers without any power issues. People started taking serious note of the new government's ambitious announcements once the first summer went by without a power crisis.

During 2015-16, lending to small and medium enterprises (SMEs) in the state grew 161 per cent from the previous year to Rs 17,000 crore. An indication of how the normalcy achieved in power supply, along with policy encouragement, helped these units return from the brink of collapse in only a year. According to the advance estimate, the manufacturing sector grew 9.5 per cent, as compared to 5.3 per cent and 5.8 per cent growth in 2013-14 and 2014-15, respectively.

Despite a near two per cent fall in the primary sector, growth in Gross State Domestic Product improved to 8.1 per cent, from 7.5 per cent the previous year.

After electricity, the second biggest uncertainty was about state finances. There were predictions of a drastic fall in tax collection, with the likelihood of reverse migration of people from Andhra from Hyderabad. Some sections warned about flight of capital, as most of those who'd established businesses in the city were of Andhra origin.

None of this happened. Partly as the government quickly reached out to people and businesses, assuring status quo and equal treatment. The achievement on law and order came as evidence that it meant what it had promised on security to people of all regions.

There was a 60 per cent jump in overall budgetary expenditure at a little over Rs 1 lakh crore during 2015-16, the first full financial year of the new state, compared to Rs 62,306 crore for the 10-month period between June 2014 and March 2015. The state's own revenue grew by 18 per cent in each of these years, far above that in the two politically turbulent years of combined Andhra in 2012-13 and 2013-14.

"Revenue-surplus Telangana has a stronger set of fiscal indicators, better than of Andhra Pradesh, as government finances was one of the three core issues around which the whole movement for separate statehood was built - that Telangana was generating more funds compared to the spending being done in this region under the undivided state," K Nageshwar, a political commentator and academician, told this newspaper.

Soon after coming to power, the TRS government had announced five ambitious plans, three on water and the other two on development of roads and health infrastructure. Of the three water projects, Mission Kakatiya was meant to rejuvenate 46,000 small lakes in five years at an estimated cost of Rs 22,000 crore, to be able to store 265 tmc (thousand-million cubic ft) of water. Mission Bhageeratha, for piped water to every house in the entire state by 2019, has an estimated cost of Rs 35,000 crore. The biggest is construction of irrigation projects at a total cost of Rs 81,000 crore to be able to fully utilise the state's river water allocation, totalling 1,250 tmc, beside 150 tmc in surplus generation.

Opposition parties have backed these programmes, though raising questions about allegedly inflated costs.

According to reports, activity on lake rejuvenation and the drinking water grid is in full swing; work on the larger irrigation projects have just begun. A visible improvement in the road network is seen in rural areas.

Government spending is also heavily loaded with social sector schemes. Social security pensions and the farm loan waiver together account for Rs 36,000 crore or 57 per cent of the total non-plan spending proposed in 2016-17.

Chief Minister K Chandrashekar Rao said his government was already reaping the political dividends from implementation of these programmes, citing the victory in every election in the state in the past two years.

Critics, however, point out at a visible neglect of the education and health sectors. "Telangana ranks low on human development indices and the government should have taken up improving these two areas on a priority basis. That has not happened," C Ramachandraiah, social scientist and activist, told this newspaper.