Vision & Growth Trajectory of Bangaru Telangana

Fulfilling the long cherished aspirations of the people of Telangana to establish their identity and chart their own future, which remained suppressed so far, is the major challenge before the New Government and determined to reinvent and reorient Telangana for this purpose.

The Vision of the State has to reflect the native wisdom of the people to harness the local resources optimally and in the fastest manner possible.

Telangana has suffered on all fronts. With the realisation of separate Statehood, people have realised the fruits of self rule.

In this direction, the Government has committed and determined with active support of people, all the hurdles in the path of development will be overcome and the spirit and dedication with which separate Statehood has been achieved will continue to drive the State towards realising the goal of Bangaru Telangana.

The State Government has envisioned realizing the goal of making Telangana a “Bangaru Telangana” or “Golden Telangana”.

Vision

This State is aimed at accelerating the growth of the economy and to make it meaningful for the poor. This vision has already stirred the imagination of people and is expected to motivate people to greater effort. The Government is of the firm view that growth has no meaning and even legitimacy, if the poor are left to fend for themselves. Despite the focus on inclusive growth, poor people continue to suffer. The new schemes launched by the State Government, such as, Mission Kakatiya, Water Grid, improvement of health facilities and road development are intended to provide a lasting solution to the elimination of poverty and backwardness in Telangana.

A Resourceful State on a Robust Growth Trajectory

GSDP Snap Shots.

• Gross State Domestic Product (GSDP) is the most important indicator for measuring the economic growth of a state.

• GSDP is commonly used as an indicator of the economic health of a State, as well as a gauge of a standard of living of a people in a State.

• GSDP is a broad measurement of a state’s overall economic activity.

• Gross State Domestic Product (GSDP), is a measure in monetary terms the sum total volume of all goods and services produced during a given period of time within the geographical boundaries of the state, accounted without duplication.

• The estimates of economy, over a period of time, reveal the extent of direction of changes in the level of economic development and also the performance made by various sectors towards the overall economy.

• The sectoral composition of Gross State Domestic Product (GSDP) gives the relative position of different sectors in the economy over a period of time which not only indicates the real structural changes taking place in the economy but also facilitates formulation of policies for overall economic development.

• When studied in relation to the total population of the state, they indicate the level of per capita net output of goods and services available or the relative standard of living of the people in the State. These are referred as estimates of Per Capita Income (PCI).

Outlook for 2014-15

• The Gross State Domestic Product (GSDP) of Telangana for the year 2014-15 at constant (2004-05) prices is estimated at Rs.2,17,432 crore as against Rs.2,06,427 crore for 2013-14 indicating a growth of 5.3% .

• The state has witnessed a steady revival in economic growth since FY14, considering a consistently declining trend for two consecutive years i.e. in FY12 and FY13.

• The anticipated GSDP at constant (base: 2004-05) prices for 2014-15(advance estimates) is estimated at Rs.2,17,432 crore as against Rs.2,06,427 crore for 2013-14 indicating a growth of 5.3%.

• This marks a re¬versal of the declining trend since 2012-13 onwards. While in 2012-13, Telangana recorded a growth rate of 4.1%, in 2013-14 it was 4.8% at constant prices.

• The State has grown at a compounded annual growth rate (CAGR) of 9.23% during the period 2004-05 to 2014-15.

• The Year on-Year growth of 5.3% in 2014-15 marks further revival in growth of state post a dip for two consecutive years i.e. 2011-12and 2012-13. Since 2013-14, the State has grown steadily.

• During 2014-15 the services sector recorded the highest growth in GSDP at 9.7%, followed by Industry sector at 4.1%. However, the overall growth was marred by agriculture sector, with estimated de-growth of 10.3%.

• The agriculture sector was affected by adverse seasonal conditions.

• Telangana is predominantly a service-driven economy with services sector estimated to contribute 62.9% of the GSDP at constant prices for 2014-15 as compared to 53.8% in 2004-05.

• The structural composition of the Telangana’s economy has undergone a notable change in the last decade with high growth witnessed in services sector in comparison to agriculture and industry.

• The primary sector in the GSDP has been witnessing a steady declining from 17.9% in 2004-05 to 12.8% in 2014-15. The Industry sector, however, has not varied much.

• The GSDP at current prices for the year 2014-15 is estimated at Rs. 4,30,599 crore as against Rs.3,91,751 crore for 2013-14 with a growth rate of 9.9 per cent.

Trends in Telangana State Domestic Product

GSDP of Telangana State at Current and Constant (2004-05) Prices

Note TRE : Third Revised Estimate

SRE: Second Revised Estimate

FRE: First Revised Estimate

AE: Advance Estimate

• In the Agriculture sector, the livestock segment has performed well and shown a positive growth, while other subsectors i.e. agriculture, forestry, and fisheries have registered a mixed growth.

• However despite a falling share of agriculture and dip in growth, the sector would remain a priority sector for the State to maintain and enhance potential for inclusive growth.

• Nearly, 55.7% of the workforce is dependent directly or indirectly on agriculture in Telangana.

Sectoral Growth Trends

• Growth rate of GSDP denotes the performance of State economy.

• Sectoral performance reflects the change in the magnitude and composition of GSDP of the State economy over time.

• The change in the relative sectoral shares in GSDP manifests the structural change in the economy.

• The economy has been classified as Agriculture, Industry and Services.

• The Agriculture Sector consists of agriculture, livestock, forestry and fisheries.

• The Industry Sector consists of mining and quarrying, manufacturing, electricity, gas and water supply and construction sectors.

• The Services Sector consists of trade, hotels and restaurants; transport by other means and storage; railways; communications; banking and insurance; real estate, ownership of dwellings and business services; public administration and other services.

• During the year 2014-15, the growth rate of GSDP 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 growth estimate of 5.3% of the State would have been better, but for the negative growth of -10.3% recorded in agriculture and allied sector, attributed mainly to the adverse seasonal conditions.

• Agriculture per se was badly hit due to this and recorded negative growth of -21.3%, which was partially compensated by the positive growth trends in Livestock (6.5%), Forestry & Logging (2.7%) and Fisheries (11.4%).

• Agriculture sector contribution declined to 12.8% from 15.1% in the 2013-14.

• 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.

• During the period form 2005-06 to 2014-15, Agriculture sector recorded highest growth rate of 25.2 percent in 2005-06 , the Services sectors with 18.3 percent in 2010-11 and Industry sector with 17.1 percent in 2006-07.

• Within in the Agriculture sector, the only Livestock sector show positive growth rate, while other three sub-sectors have registered a mixed growth over the years.

• Within the services sector, transport by other means and storage; communications; banking and insurance; real estate, ownership of dwellings and business services and other services , have registered a positive growth, while trade, hotels and restaurants; railways and public administration have shown mixed growth over the years.

• Within the industry sector also, all the sub-sectors have registered mixed trend of growth during the period 2005-06 to 2014-15.

Structure of the Economy

• Composition of GSDP is changing significantly over the years.

• Agriculture sector is largely depending on the vagaries of seasonal conditions and receipt of rainfall.

• At current prices, the share of Agriculture sector in GSDP is ranging from 16.5 percent and 20.6 percent during the period from 2005-06 to 2014-15.

• State witnessed the falling share of agriculture sector in overall GSDP as well as fluctuating trend of growth rates for last few years.

• Agriculture sector experienced a decelerating trend in the State in recent years, but it continues to remain a priority sector for the State because of its high potential of employment generation, food security, inclusiveness and sustainability of growth as 55.7 percent of the workforce draws its sustenance fully or partially from agriculture in the State.

• Declining share of agriculture sector in state GSDP is consistent with normal development path of any economy but fast agricultural growth remains vital for creation of employment, generation of incomes and ultimately providing food security to all.

• Indicates shifting of GSDP from agriculture led to industry led and service led economy in recent decade.

• 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 Industry sector is hovering between 25% and 30% during the period from 2004-05 to 2014-15.

Per Capita Income

• 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.

• Per Capita Income of the State at current prices increased to Rs. 1,03,889 in 2014-15, 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 at constant (2004-05) prices has also gone up from Rs. 48,881 in 2013-14 to Rs. 51,017 in 2014-15, registering a growth rate of 4.4 per cent.

• 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. 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.

• Higher per capita income of the state is not only due to the higher growth in Gross State Domestic Prod¬uct but it can also be attributed to faster deceleration in the population growth.

• In Telangana, six out of ten districts have per capita income lower than the State Per Capita Income.

• The districts recording higher per capita income than the state average are Hyderabad, Rangareddy, Medak and Khammam.

• This clearly shows that economic growth is unevenly distributed in the state and more concentrated in and around urban areas

Gross District Domestic Product (GDDP)

• As in other parts of India, in Telangana state also substantial variations prevailing in the levels of develop¬ment across districts.

• Gross District Domestic Product (GDDP) reveal the size of the district economy and also to assess how the district is progressing over a period of time.

• As per the GDDP estimates for the year 2013-14 at current prices, Hyderabad occupies the highest position followed by Rangareddy and Medak districts.

• These three districts account for about 45 per cent of state GDP. On the other hand, the rest of seven districts together account for about 55 per cent of the state GDP.

• GDDP of the three major districts grew at the average rate of more than 10 percent from 2004-05 to 2013-14.

• Whereas, Adilabad district GDDP grew at an average growth of 5.9 percent which is lowest among all the districts during the period.

Per capita Income of Telangana State and All India

District wise- Share of GDDP in State GDP and percentage variation over previous year

• The growth trajectory of the Telangana State reveals many opportunities as well as challenges, which need to be kept in view while formulating policies and programmes.

*Stay for next topic on Industrialiation policy of Bangaru Telangana Tommorrow