Andhra Pradesh seeks to become a $2.5 trillion (Rs 216.48 lakh crore) economy by 2047, meaning that it would have to grow over the next 22 years at a CAGR of 13.53% from its current (2024-25) GSDP of $190 billion (Rs 16.41 lakh crore). That is, the economy has to expand by 13 times in 22 years.
Theoretically, it may be possible, but practically, an unnerving target. Post bifurcation, AP’s growth rate has been flat, relative to Telangana. Further, fiscal prudence, (or the lack of it) is also a matter of concern for both Telugu States. While revenue from own tax sources and Central transfers amount to Rs 1.77 lakh crore, AP’s debt is Rs 4.91 lakh crore (2023-24). In other words, AP has a current debt liability thrice that of its annual income. Some of this accumulated debt is certainly attributable to profligacy, or mismanagement.
So, achieving such an ambitious growth target while balancing its liabilities will definitely be a tough call.
Assuming that governance improves, own revenue sources diversify and expand, identification and prioritisation of growth sectors is properly done, strong Central budgetary support is likely, and favourable global investment climate prevails over the next two decades, near 13% growth is feasible. But then, these are too many ifs. Good to have an ambition, but it is better to be realistic.
Now that the context has been set, let us examine the Finance Minister’s Budget speech. To my mind, the FM perfectly identified the key growth engines for the country – (1) Agriculture (2) MSME (3) Investment and (4) Exports. Funds should flow within the above framework over the next few years. I steer clear of the persistent demands like Polavaram, Railway Zones, new capital, etc. because they are somewhat politico-economic in nature. Special dispensations can always be found for them if political cards are played well. So, let us limit the discussion to what the current budget can give to the Telugu States.
Within the domain of agriculture, the one that catches my attention is the PM-Dhan Dhanya Krishi Yojana. Andhra and Telangana already have six notified aspirational districts. The new scheme envisages that 100 districts with low productivity, moderate crop intensity and below-average credit parameters are picked for this scheme. If both the Telugu States can get at least 10 additional districts under the new scheme, primary economy will expand and the slogan - ‘produce only if you can process’ acquires meaning.
Focussing on pulses, using India Post as an institutional mechanism for providing multiple services to the farmers is a meaningful initiative. While pointing out that 45% of our exports are done by MSMEs, in one fell-swoop, she widened the ambit to cover a much larger number of enterprises under the definition, as the turnover limit goes up to Rs 500 crore which is very significant. If we can leverage these growth engines, both the Telugu States will develop rapidly. But as always, it is a big ‘if’.
KN Kumar IAS (Retd)
Former Chairman, Meghalaya Farmers’ (Empowerment) Commission