One of the major arguments for a separate state of Telangana has been that since the formation of Andhra Pradesh, this region has been neglected and even discriminated against, resulting in economic and social hardship. Compared with coastal Andhra, it is alleged that Telangana has low per capita income, lower access to employment, lower business opportunities and low access to education and so on. It is also alleged that most of the higher level economic opportunities are appropriated by those belonging to coastal Andhra.
When a study of rate of change, growth rate and shares in the state economy is evaluated, nothing unusual has emerged. Telangana, excluding Hyderabad, currently has a share of 36 per cent in state population and 41 per cent in land mass. Any development parameter that is consistent with these shares can be considered on par with the population and share of land mass. Indeed, one finds that at a reference point in the past, such as the census 1961 since when factual data are available, the shares of Telangana were far too low. In recent years, however, the shares of Telangana for many common development parameters are in league with the share of population or area, often being higher. There are a few crucial indicators on which Telangana is lagging behind, and they appear to have occurred due to structural causes of the economy and also due to concentration of economic activity in Hyderabad.
Overall, in spite of 50 plus years of policy protected planning and execution, one finds regional variations in the economic development of AP. The rate of growth in the development parameters summed up below is found to be robust both in Telangana and coastal Andhra. Disturbing, however, are the growing levels of inequity within Telangana and Rayalaseema, and within the deprived population groups. Contrastingly, the evidence suggests that the inequity in income has declined in coastal Andhra. It is essential to take a note of inequity differentials between the haves and have-nots in Telangana, especially amongst the SCs, STs and minorities. Such deepening inequity in Telangana cannot only sustain the separatist agitation but it can also carry it further and increase its intensity. The masses, therefore, can be easily used as tools of agitation by motivated groups and even political parties.
Further, is important to take a medium to long term perspective so far as the future development of the state. An understanding of the perspective of the Telangana issue within a poverty, deprivation and empowerment framework does not compulsorily support partitioning of the state. It is a fact that most of the economic and developmental parameters show that Telangana (excluding Hyderabad) is either on par with or a shade lower than coastal Andhra; but once Hyderabad is included, the situation in Telangana is far better. Coastal Andhra has natural advantages and a long history of development in agriculture, but it is the Telangana region which has shown commendable growth in agriculture during the past three-four decades. Thus, on the whole, it would appear that the deprived region is Rayalaseema not Telangana. Telangana region is found to be relatively less serviced by commercial banks. Due to concentration of services such as education and health facilities, and service sector employment in Hyderabad city, other parts of Telangana are under-serviced. There is an urgent need to remove these anomalies from Telangana.
economic inequality within the region is an important indicator of the unrest within communities. This analysis of income change in rural areas over a period of one decade suggests that, in Telangana, the relative income growth has occurred only amongst the richest, whereas the poorer and the most deprived have experienced considerably large decline in relative income over the reference period.
While the farmers in all regions have shown stable income, the real income of the agricultural wage labourers has declined considerably in Telangana, whereas it has increased considerably in coastal Andhra. Similarly, the SCs, STs and minorities in Telangana have suffered a decline in income during the past decade or more, whereas these communities have gained substantially in coastal Andhra. The upper castes have gained considerably in Telangana while there is erosion of relative income amongst the rich in coastal Andhra. These trends and intra-regional differentials in income distribution are corroborated by an advance analysis. However, of all the regions, it is Rayalaseema which has experienced broad based decline in living standards in AP during the reference period. This fact gets support from the measurement of ‘monthly per capita consumption expenditure’ which is far too low in Rayalaseema.
Human development is a comprehensive measure of deprivation in communities. The evidence suggests that coastal Andhra is successful in maintaining the levels of human development compared with Telangana and Rayalaseema where there is a decline during the reference period. But the decline is far steeper in Rayalaseema. There are a number of queries and doubts which emerge in the minds of policy makers and people at large as to what would be the economic viability of the states which may be formed if AP is bifurcated.
Consider the status of the regions (various combinations) within AP in terms of the GDP and per capita income. AP is the 4th largest state in India in terms of area and 5th largest in population. It ranked 3rd in terms of the absolute size of GDP in the year 2007-08. In terms of per capita income, however, AP is just above the all India average and occupies the 11th position.
An interesting scenario emerges if various regions of AP are compared between themselves and with the other states in India. For example, Telangana region (excluding Hyderabad) ranks 15th in the list of 28 states (excluding AP) in terms of the absolute amount of GDP, and is listed above the states of Chhattisgarh, Jharkhand, Uttarakhand, Himachal Pradesh, Goa and all the Northeastern states. In terms of per capita income, Telangana (excluding Hyderabad) is a notch higher than the all-India average. Telangana (including Hyderabad) ranks 13th in GSDP as well as in per capita terms. 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. Coastal Andhra stands out as a superior economic entity within AP, and its GDP will be 13th largest compared with the states of India. In terms of per capita GDP, it is much higher than the national average and stands 10th in ranking amongst other states. Thus, from the point of view of the size of economy, Telangana as a new state can sustain itself with and without Hyderabad. The other combination of regions - coastal Andhra and Rayalaseema together can also sustain themselves as a state and even separately.
These are the days of economic reforms and globally a period when economic blocs consisting of many smaller nations are being formed in the interest of enhancing economic opportunities, markets and employment. On the other hand, there are a number of arguments that favour smaller states with respect to governance and inclusive development. Smaller states can give greater representation and access to governance. For example, it is possible that the STs and Muslims in AP may get a relatively better say in governance in the state of Telangana. However, this will not be the case in coastal Andhra due to relatively smaller share of these communities there. Thus, the argument in favour or against separation on the issue of governance and representation can work both ways and the impact will not be uniform on all segments of the newly formed states. Generally, it is believed that larger states are difficult to govern especially when governance is centralised in the state capital. These are the days of decentralisation of governance through the 73rd and 74th amendments; and AP has resorted to the Mandal system of governance since long. Therefore, this maturing process of decentralisation of governance does support sustenance of a unified AP.
In recent years, the shares of Telangana for many common development parameters are in league with the share of population or area, often being higher. There are a few crucial indicators on which Telangana is lagging behind, and they appear to have occurred due to structural causes of the economy and also due to concentration of economic activity in Hyderabad.