Reinventing Telangana: Opportunities many, challenges galore

The newest State in India, Telangana, shows impressive figures on the economic performance front, whereas in respect of human and social conditions, it appears to be lagging behind.

First the good news. The Budget for 2015-16 and the Socio-Economic Outlook 2015 (Reinventing Telangana: First Steps) presented on March 11 state that the Gross State Domestic Product (GSDP) growth was estimated to be 5.3% for 2014-15 as against 4.8% in the previous financial year 2013-14. A day before Chief Minister K Chandrashekar Rao claimed in Assembly that Telangana would be the second wealthiest State in the country after Gujarat. The Chief Minister claimed that the Telangana was likely to get nearly Rs 6 lakh crore from the Centre in the next five years. This comprises Rs 3.75 lakh crore in Non-Plan and Rs 2.25 lakh crore under Plan categories.

The State would also get Rs 17,000 crore more in addition to 14,000 crore allocations under the Fiscal Responsibility and Budget Management (FRBM), he claimed. He also pegged hopes on the NITI Ayog which has replaced the Planning Commission.

The Socio Economic Outlook 2015 also reflects his enthusiasm and points out that the growth in the GSDP (from 4.8% to 5.3%) marked the beginning of the “reversal of the declining trend registered during the past three years.”

The growth would have been higher but for the agriculture and its allied sectors recording a negative growth of minus 10.3 per cent. The sectoral analysis reveals that during the year 2014-15, the growth rate of Gross State Domestic Product is highest in services sector with 9.7% followed by industry sector with a growth of 4.1% and agriculture sector expected a negative growth of (-)10.3%.

The contribution of agriculture sector declined to 12.8% from 15.1% in the previous year. The contribution of the industry sector is estimated to be 24.3% without much variation compared to the past year and the Services sector is estimated to contribute a higher percent of 62.9%, as against 60.3% in 2013-14. The decline in the share of agricultural sector is almost compensated by the services sector, which increased its share from 51% to 57% during said period. The share of the industry sector is hovering between 25% and 30% during the period from 2004-05 to 2014-15.

Per capita income higher than national average
Chandrashekar Rao also stated that even the per capita Income of Telangana State was certainly more than the national average. The per capita income gives a better idea about the level of development in a State, which is a proxy indicator for the standard of living of the people. As per the Advance Estimates for 2014-15, the per capita income of the State at current prices increased to Rs 1,03,889 from Rs 95,361 in 2013-14, registering a growth of 8.9 per cent, which is higher than the national per capita income of Rs 88,533. The per capita income in the State has remained consistently higher than the national per capita income throughout the period from 2004-05 to 2014-15. The per capita income of the State increased from about Rs 24,409 in 2004-05 to Rs 1,03,889 at current prices in 2014-15.

Population decline helps per capita growth
Suffice to say that the State is firmly entrenched on the path of progress, what with vital economic indicators showing reversal of deceleration in the economy. Let us juxtapose them against the socio-human factors.

The new State of Telangana has with a geographical area of 1,14,840 sq. km and having a population of 3,51,93,978 as per 2011 census; it is the 12th largest State in terms of both area and the size of population in the country.

The growth in the Per Capita Income, higher than the national average, can also be attributed to the increasing fall in the population numbers in the State.

The growth of total population in the State has moderated to 13.58% in the decade 2001 to 2011 from 18.77% in the preceding decade.

The Per Capita Income in six out of 10 districts is below the national average of Rs 74,920. As many as 9 out of the 10 districts in Telangana are backward and even received the Backward Regions Grant Fund (BRGF).

Neglect of farm sector
The increasing neglect of farming sector and resultant farmer suicides has not been made any mention by Finance Minister Eatala Rajender.

There has been a negative growth of 10.3 per cent in agriculture and allies sectors and one can guess the adverse impact on the rural population which comprises 61.33 per cent of the total population. Migration from rural areas to urban areas is increasing by the day and the Socio-Economic Outlook says the urban population in the State has grown by 38.12%

in the decade 2001 to 2011 as compared with 25.13% in the preceding decade. Next take the sex ratio of the State. It is the number of females per 1,000 males and the figure at 988 in Telangana is higher than the national average of 943 in 2011.

Wait before you feel elated, here is a pointer to a related stark situation – the sex ratio of children in the age group of 0-6 years has declined from 957 in 2001 to 933 in 2011.

Odisha, Chhattisgarh ahead of TS in literacy
Telangana lags behind the national average in the literacy rate. This depressing news comes at a time when the State looks to offsetting the deceleration in agriculture sector with impressive performance of services sector. The literacy rate at 66.46% is lower than the national average of 72.99%.

It is a matter of concern that the literacy rate is lower than those in some of the lower income States like Odisha, Chhattisgarh and Madhya Pradesh. The literacy rate in the State varies from 55.04% in Mahabubnagar to 83.25% in Hyderabad.

While the male literacy rate is 74.95%, the female literacy rate is much lower at 57.92%. The literacy rates among the SCs and STs is 58.90 and 49.51% respectively.

The Outlook cautions that “Improving the literacy rate in general and that of the SCs and STs in particular is a major challenge before the State government.”

Dropout rate very high
Another feature on the literacy front is the high dropout rate in the State, particularly among the SC and ST students in classes I to X. The dropout rates are 40.3% for SC students and as high as 62.8% among the ST students.

Not a healthy indicator
A number of health indicators in Telangana need to be addressed for improvement. In six out of ten districts of the State, the infant mortality rate (IMR) is found to be much higher than the national average of 40 (per 1,000 live births). The maternal mortality rate (MMR) at 152 (per 1 lakh population) is very high in the district of Adilabad as compared with the national average of 167.

Even a cursory comparison of the growth trajectory of the State points out several opportunities for faster growth, should the KCR government overcome the attendance challenges as well. As the very title of the Socio-Economic Outlook 2015 – Reinventing Telangana, First Steps – points out, Care and follow-up need to be shown with regard to policies and programmes.

The government would do well to constantly remind itself of an apt observation from a famous economist James Cash Penney in this regard: “Growth is never by mere chance; it is the result of forces working together.” It has to reach out to the opposition and make a collective effort zealously to ameliorate the living conditions of Telangana, thus paving way for ‘Bangaru Telangana.’

By: Balaram Keelapattu