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Belying doomsday prediction

Belying doomsday prediction
Highlights

Notwithstanding the continuing political rhetoric on the fiscal woes of Andhra Pradesh, the state, according to the official data itself, recorded an impressive economic growth.  

Notwithstanding the continuing political rhetoric on the fiscal woes of Andhra Pradesh, the state, according to the official data itself, recorded an impressive economic growth.

While reasserting that the bifurcation of state has put tremendous stress on financial and other resources, the Governor’s address states that the state of Andhra Pradesh could register a double digit growth rate.

Andhra Pradesh recorded an impressive growth performance of 10.99 per cent in the fiscal year 2015-16.The trend is promising in the current financial year too. The state recorded an equally impressive growth rate of 12.23 per cent during the first-half of the financial year 2016-17 and is all set to maintain the double digit growth rate.

After the state reorganisation, Andhra Pradesh is predominantly an agrarian economy and agricultural sector continues to provide the much-needed impetus to the state’s buoyant economy. Agriculture and allied sectors have shown a phenomenal growth rate of 24.44 per cent during the first-half of this financial year (April –September, 2016).Surprisingly, this remarkable growth rate was achieved despite 28 per cent deficit rainfall in the state.

However, a disaggregated view of state’s agrarian economy has its own share of discrepancies. It is the allied sectors like fisheries that have provided the much- needed momentum to the state’s unprecedented growth rates in agriculture and allied sectors.

The sectoral composition of growth rates in this sector reveals this. For instance, agriculture still recorded a not so impressive growth rate of mere 3.69 per cent while fisheries registered a remarkable growth rate of 42.57 per cent. Even the other allied sectors like live stock (14.91%) and horticulture (18.33%) have also provided the support to the agricultural sector.

This indicates the importance of allied sectors in the agrarian economy that provides sustainable incomes for the rural households. In fact, even in the united Andhra Pradesh, the growth rates of allied sectors were much higher than those of national growth rates in these sectors that form a significant part of the rural economy.

The residuary state of Andhra Pradesh inherits the growth legacy of the united state in the allied sectors. Andhra Pradesh leads in the production of oil palm, papaya, citrus and chillies and is second in the production of mangoes and tomato in the country. Horticulture sector is essential for food and nutritional security.

Rayalaseema can emerge as a horticulture hub. This would provide the value addition to the perennially drought-stricken region of the state and help in bridging the regional imbalances in the state economy which has a potential to endanger the integrity of the state.

Andhra Pradesh faces the twin problems of drought and floods. Given the grave implications of nature’s vagaries for the state’s agrarian and rural economy, allied sectors like livestock can be an alternative and dependable source of income generation even during times of severe drought.

Andhra Pradesh has an immense potential in other allied sectors too. For instance, Andhra Pradesh accounts for 70 per cent of the total culture of prawn in the country and occupies a share of 45 per cent in the total seafood exports in the country.

Fisheries sector that provides employment to 14.5 lakh persons significantly contributes to the state’s economy. The state aims at emerging as the ‘Aqua Hub’ of the world. This is a double-edged sword for the state as it can usher in prosperity, while causing an irreparable damage to the food grain production.

Andhra Pradesh is considered as the granary of India. The sign of disastrous push towards aqua farming at the cost of paddy cultivation is already evident in several coastal districts. The state has to carefully study the implications of this growth strategy for its eco-friendly and sustainable development path.

Andhra Pradesh, in fact, maintains a healthy composition of growth. Not just the allied sectors, even the industrial and the modern services sector are also showing a promising performance. For instance, industry sector registered a growth rate of 9.98 per cent and services sector has grown at a rate of 9.57 per cent in the first half of the financial year 2016-17.

The macro-economic data released on the eve of the budget in the Governor’s address to the joint session of the state legislature disproves the skepticism and pessimism purveyed for the purpose of political project that Andhra Pradesh has been totally ruined due to bifurcation of the state.

It remains a fact that the residuary state of Andhra Pradesh certainly was at loss as it lost the vibrant capital city that remained a growth engine in the united state. But, it’s an equally important fact that the state has a remarkable potential for economic performance and a doomsday prediction is totally unwarranted.

The state government may give the credit for such a remarkable macroeconomic performance to its skillful handling of the economy. The Governor in his address said, “…despite the fact that the state reorganisation had put tremendous stress on the financial and other resources, my government’s unflinching commitment to withstand the challenges and pursue specific growth strategies has started yielding fruitful results.”

But, the fact remains that even after the bifurcation the state has its own advantages too. For instance, Telangana has largely inherited the information and technology sector of the united state. Andhra Pradesh has inherited the marine economy of the united state due to its 974 km long coast line.

In fact, this long coast line has a potential to transform the state into a logistics hub and a gateway to East. Instead of harping over the bifurcation that would only further rub salt to the wounds, the wisdom lies in leading the state to new frontiers of economic prosperity capitalising on its strategic advantages and innate potential.

For instance apart from its specific advantages in agriculture, horticulture, sea foods, the state has an immense potential in the tourism sector that can provide employment, earn foreign exchange, etc. The state is known for its divine destinations, heritage centers.

It still has a huge untapped potential in heritage, religious, eco, beach tourism. But, ensuring biodiversity, preserving fragile eco systems, rejuvenation of local economy are vital while promoting tourism. The tourism should be promoted as an eco-friendly growth engine.

The state has lost the IT and ITES sector to Telangana in the wake of bifurcation. The attempts to create an IT base in Visakhapatnam in the united state did not yield significant results. The new state of Andhra Pradesh is now embarking upon remapping the IT sector. With its vibrant diaspora, the state can rebuild the IT sector.

With its robust agriculture and allied sectors, the state has an attractive potential in agro processing, food processing industries. The central government has to proactively come forward in helping the state in its reconstruction post bifurcation. The imminent challenge is to address the regional imbalances.

While, the Amaravati capital-centric model is quite euphoric, there is a simmering discontent in the backward regions of the state like North Coastal Andhra and Rayalaseema and deserves an immediate attention.

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