Is Telangana a rich State?

By: J R Janumpalli

The claim that Telangana is a rich state should be taken in a different perspective — may be in regards toits potential. It means that it has rich resources and its riches were siphoned off by Andhra colonial government in the last 58 years making it poor. Most of it cannot be reclaimed now. The much touted budget surplus now in TS is a temporary and a passing phenomenon. Based on that it cannot be construed TS as a rich state.

Surplus or deficit in the budget of a state, relatesto its revenue earning and expenditure thereof. If in a year a state government spends less than its revenue it can result in some surplus. Next year if it spends more than the revenue it will be in deficit. Therefore the so called budget surplus of TS on the beginning of bifurcation of the state should be taken as a short lived entity — may be for this year only. In view of the liberal spending of TS government and the changing dynamics of revenue earning in the coming year or so, the scenario can change significantly. The migration of many Andhra establishments, division of assets, sharing of liabilities etc. can impact the revenue of TS. With the penchant of all state governments in India to spend more than their revenue, the surplus of TS budget can be a thing of the past with in no time.

But the present surplus in TS budget tells us a telltale story of the united state. It is a spillover of the erstwhile A.P.government’s expenditure pattern. In the aftermath of 1969 Telangana agitation, Kumar Lalith and Bhargava committees found that Telangana surpluses were spent in Andhra region. After 1972 also the practice continued unabated and part of the revenue of Telangana was continuously spent in Andhra region. It indicates the habitual lopping off Telangana revenue for Andhra resulting in less expenditure than its revenue in Telangana. The same is now reflected as surplus. The so called deficit in Andhra is the result of this unscrupulous practice. Not because of any unscientific bifurcation or injustice as crowed by Andhra politicians in their propaganda. The observation of 14th finance commission corroborates this fact only.

As for Hyderabad revenue, it has a lion’s share in erstwhile Hyderabad state, in A.P. and will have in TS also, like any metropolitan city in India. It will be the same story for Madras in Tamilnadu; for Bangalore in Karnataka; for Calcutta in West Bengal so on so forth. If A.P. is not getting the benefit of it, is not the fault of TS. The residual A.P. has no claim what so ever on it.For, Andhra state when it got separated from Madras state in 1953 and Gujarat when it got separated from Bombay, it was the same situation. Infact andhras and Gujaratis were living in their parent states much more than the 58 years of andhras’ colonization in Hyderabad. Therefore andhras motivated propaganda of Hyderabad revenue for making them deficit, is a totally irrelevant issue and has no merit whatsoever. Any way some of the Hyderabad revenue will be transferred to A.P. as and when their revenue earning institutions and the government establishments translocate to A.P. If they want that part of the revenue they need to go their state for good. If they want to be here and cry for the revenue it does not make sense. It is like they shall reap as the sow.

The central funds are devolved and shared among the states according to certain settled formulas. Of course the backward states get some additional funds and incentives as part of the formulas as central assistance. It can also provide funds to states for some special development projects out of turn. KCR’s often repeated statement that Telangana is rich is creating some avoidable problems here. It is making andhras indulging in irrational propaganda against bifurcation and trying to extort more funds from Center. They are making the issue very contentious. It also is giving a handle to the center to give more fundsto A.P., as TDP is the ally of BJP, as the difference in allotments to the two states in Central budget indicates.

It is also not good for TS government giving much importance to this temporary surplus and go on spending spree on non-plan expenditure, which can have a deleterious effect on its economy in the coming days. Therefore thinking TS state is rich from the point of view of its present revenue is a misnomer. May be it could have become a rich state if it was not merged with Andhra and its resources and revenue was not siphoned off during the last 58 years. It has definitely pushed it backwards. The demerger will stop that diversion, and the state has the potential to be among the rich states like Maharashtra, Haryana and Gujaratin coming years. Yet, government needs to be careful and use its resources prudently without getting carried away by the short-lived budget surplus.

For, richness of TS is not like Brunei or Singapore, whose PCI is more than $ 50,000. Presently the PCI of the richest state in India does not exceed even $2500.

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