‘Telangana Model’ shows the benefit of splitting big states, highlights ‘The Economist’

In a detailed analysis, ‘The Economist’ presented the growth and development story of Telangana under the leadership of KCR over the past decade. It highlighted that Telangana has not only surpassed many expectations but has also set a precedent for the benefits of creating smaller states.

It said that since its creation in 2014, Telangana has experienced remarkable economic growth. Initially, it was the 10th in per-person income among India’s states. However, by last year, it had surged to boast the highest per-person income among any decent-sized state, trailing only behind the smaller states of Sikkim and Goa. The state’s GDP growth has consistently outperformed that of India as a whole, and with just 2.7% of India’s population, Telangana’s share of the national output has grown by nearly 20%, reaching 4.8%.

Hyderabad, the state capital and economic powerhouse, has been at the forefront of this growth. The city is a thriving multilingual, multireligious metropolis with a burgeoning high-tech industry. It houses the largest Amazon office globally, and both Microsoft and Google are expanding their substantial presence. Furthermore, Hyderabad has become a significant hub for the pharmaceutical industry.

The Economist traces Telangana’s journey back to 1956 when it became part of the newly formed Andhra Pradesh. Decades of perceived discrimination and neglect led to a prolonged struggle for statehood, culminating in the creation of Telangana by an act of India’s Parliament in 2014. The challenges were numerous, as Telangana was the poorer part of Andhra Pradesh, landlocked and with only one major city, Hyderabad. 

‘The Economist’ said that KCR, the first chief minister, transitioned from leading the statehood movement to effectively governing the new state. The new government took pragmatic steps to assure businesses and investors that their interests were secure. 

It added that between 2014 and 2023, Telangana’s electricity generation capacity increased from 7.8GW to 19.5GW, and several projects were initiated to improve water supply for drinking and irrigation. Welfare schemes for farmers were also rolled out, contributing to overall development.