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Prospects & policy challenges for Bangaru Telangana

Prospects & policy challenges for Bangaru Telangana
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The talk of Telangana is a rich state has been evoking a sharp reaction in political and financial circles for some time. It is true that during...

The talk of Telangana is a rich state has been evoking a sharp reaction in political and financial circles for some time. It is true that during agitation for separate statehood, K. Chandrasekhar Rao (KCR) claimed that after separation, Telangana would become a “rich state” and this has been proved true by the recent 14th Finance Commission report, that states of Gujarat and Telangana as “revenue surplus states”.

KCR assumption was based on the imbalances in the combined state between revenue collection in Telanagana and corresponding expenditure. True to the claim, Lalit Committee reported that during the period 1956-57 to 1967-68 the Telangana region generated 41.7% of state revenue but only 36.8% was spent for the region. That has sown seeds for state bifurcation in 1969.

As per the 14th Finance Commission report, the gap was further increased and between 2004-05 and 2012-13, where Telangana contributed 49.5% to combined state revenue but only 38.5% was spent for the region. It was the unrestrained foresight and tireless efforts of KCR that made Telangana a reality after nearly six decades of struggle for a separate State.

Present Gross District Domestic Product (GDDP) data of Telangana state indicates that three districts, Hyderabad, Rangareddy and Medak together account for more than 55 percent of the State income (GSDP), while so called prosperous districts like Nizamabad, Adilabad, Karimnager and Warangal share around 22 per cent of the State GSDP.

The per capita income of Hyderabad at 1014-15 constant prices is Rs.2,94,220/- which is much higher than the state average per capita income of Rs.1,29,182/- and the gap is increasing over time. With per capita income of Rs.1,80, 039 Rangareddy appears to be rich but except few areas geographically closer to capital, the district is one of the poorest in the state. Though Telangana is rich in terms of surplus in revenue expenditure gap, barring Hyderabad, the state is actually poor in income levels and this is a big challenge to make state prosperous.

Agriculture and allied sectors is the mainstay in Telangana has been continuously performing and Gross Value added at current prices for the year 2015-16 is about 14 per cent and declined from 16.1 per cent in 2011-12. Rainfed agriculture on which 90 pe rcent of rural population depends is expected to record negative growth due to drought in the current year.

Industrial sector in the state contributes to state SSDP around 24 but mostly active in Rangareddy, Nalgonda and Medak districts with over 80 per cent gross value addition from these districts. Further, the sector has not been generating any significant employment opportunities in recent years. The challenge for policy makers is establish agro based industries in countryside and train rural youth for increased opportunities as was done in China.

Like in any other developing economy, service sector contributes lions share to state GSDP with 62 per cent but again mainly concentrated in metropolitan Hyderabad area. The challenge is to create additional opportunities in other districts where huge talented and qualified work force is available. Similarly, Telangana lags behind in many indicators of social development compared to national average particularly in literacy and health compared to several progressive states like Kerala and Tamil Nadu posing disturbing challenges.

As KCR has given a call for Bangaru Telangana, an analysis of prospects and challenges would be of immense value. Simply dreaming about Bangaru Telangana would be a mistake on part of policy makers, particularly when opposition parties have been questioning the increase in state debt after TRS assumed power. It is interesting to note that India Credit Rating Agency (ICRA) gave A minus status to the united Andhra Pradesh but after bifurcation it gave A category status to Telangana and it surely indicates the state’s potential.

The A category increases the state levels of availing the loans with lower interest from national and international agencies. At this point "Attitude is everything." It is this factor what makes the difference between those who succeed and those who fail. If you want to prosper, think big and that is what KCR has been doing to create Golden Telangana or popularly called as Bangaru Telangana.

KCR approach reminds experience of New Zealand in the last quarter of 20th century with huge financial crisis mainly due to energy and oil shortages. That made then Prime Minister Rib Muldoon to initiate “Think Big” with economic interventionism as an economic strategy favouring big government intervention in the development process to correct market failures and promote the general welfare.

The “Think Big” schemes saw the government borrow heavily from international agencies, running up a large external deficit, and using the funds for large scale projects to create assets. Economic intervention was aimed at a variety of political or economic objectives, such as promoting economic growth, increasing employment, raising wages, reducing prices, promoting equitable distribution of wealth and serving interest rates, promoting public welfare and addressing market failures. Think Big did have a large positive impact on New Zealand economy.

International best seller “The Magic of Thinking Big” makes a thought provoking claim that, one need not have a great intellect or an extraordinary talent but if you know how to Think Big and have big plans , You can become successful in life you can become the person you want in life. He suggested that the major difference between the people who are very successful is not their intelligence or talent but the way they think and believe. The size of the ‘Success’ is determined by the size of your belief and thoughts. The author David Schwartz closes the book with a quote “A wise man is the master of his own mind, A fool is a slave to his”.

Politically speaking, think big means that if you have something valuable in mind, a service to offer, an idea to develop, or even your own talent to use, then you owe it to yourself – and to your voters – to increase its scope. There is no point in settling for anything less than the full potential of it can do to people and state. That is what exactly KCR aspires to deliver to the people in Bangaru Telangana. Thinking big needs vision to see big, courage to venture because if you do not nothing is gained and stubborn because opposition will express doubts about it along the way.

KCR has emerged as the supreme leader of Telangana with leverage and flexibility to run the government. No politician in the state can match his vision, intelligence and administrative skills. It is an opportunity for Interventionism to identify and select government priorities in economy with special privileges and subsidies for some sectors at the expense of others. Albert Einstein said that "It’s not that I’m so smart, it’s just that I stay with problems longer."

Yes, in his political life of over three decades KCR has seen enough problems and lived with problems. Since people also gave him a mandate, it his responsibility to fulfil aspirations of the people. When you can see, hear, and feel your vision, then you simply have to pursue it, however crazy it might seem to others. The fact is KCR has strongvision and the courage to create Bangaru Telangana.

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