Why Jagan should develop capital city

As a young politician, Yeduguri Sandinti Jagan Mohan Reddy deserves appreciation and accolades. You may ask why. India is on the cusp of becoming a major global hub for startups. The phenomenal success of Flipkart and several others in the country accelerated startup culture.

A recent survey said India has more than 18,000 startups. But I don't think this number includes political startups. Politics is complex in nature and success rate in this key space is abysmally low.

While it is an accepted fact globally that over 90 per cent of startups fail, the failure rate in politics is far higher and hovers around 99.99 per cent. That's reason why India is home to just a handful of politicians who established a political party and took it into the corridors of power.

YS Jagan is one among these successful politicians. Also, he made unthinkable possible in politics by trouncing Nara Chandrababu Naidu, a seasoned politician known for his Chanakya tactics, and Pawan Kalyan, a popular film actor, at the hustings.

His poll victory could be gauzed from the fact that Naidu-led Telugu Desam Party's tally had been reduced to just 23 out of 175 seats while Pawan who was in electoral fray for the first time lost from both the seats he fielded himself from.

The Jagan-led YSR Congress Party notched up 151 seats at a strike rate of 86 per cent. That means 86 per cent of YSRCP candidates won the elections. That's a huge achievement for a young party like YSRCP and young politician like Jagan.

But success always comes with responsibility.

Huge victory comes with huge responsibility. As my short travels in few pockets of Andhra Pradesh before elections revealed, the poor and downtrodden believed that Jagan would take care of their interests on the lines of his father late YS Rajasekhara Reddy if he came to power.

They also thought that he would provide better alternative to, better development and better welfare than Naidu. I happened to meet Jagan at a small village in Amadalavalasa Assembly constituency in Srikakulam district during the last days of his 3,648-km Praja Sankalpa Yatra in December 2018.

That way, I had a chance to observe his popularity among AP people from close quarters. I remember telling my friends in Hyderabad when I came back that Jagan would sweep polls hands down even if 50 per cent of those turned up to see him during the historic walkathon, votes for him.

Naidu's last-ditch efforts in the form of large-scale financial sops at the eleventh hour failed to diminish Jagan's popularity among voters.

Going by the path-breaking welfare schemes he announced in the last six months, there is no second opinion that Jagan is offering better welfare measures than his predecessor.

From increasing salaries to small-time employees and rolling out sops for marginalised sections of the society to offering weekly-off to police and creating new government jobs, most of his schemes are innovative.

That way, he proved his supporters right when it comes to welfare measures.

But can Andhra Pradesh, given its precarious financial position, continue such cash-draining welfare measures for long? It obviously can't if the Jagan government fails to take effective steps to increase and strengthen the State's revenue streams.

As per official data, AP posted a revenue deficit of Rs 11,654 crore and fiscal deficit of Rs 33,619 crore in FY19 (for last financial year ended on March 31, 2019). The Jagan government projected a revenue shortfall of Rs 1,778 crore and fiscal deficit of Rs 35,260 crore for the current fiscal which would end on March 31, 2020.

As of this October in current fiscal, the State has a revenue deficit of a staggering Rs 16,405 crore and fiscal deficit of Rs 25,319 crore, which are far higher than projections made in the recent Budget.

Further, there is significant fall in GST, registration fees, excise tax so far this fiscal compared to the same period last fiscal. This indicates a deteriorating financial situation in Andhra Pradesh even as the government pushed up spending on welfare measures.

While uncertainty over Amaravati, the Greenfield capital city planned by the previous government, led to fall in land registrations and other related income, efforts of the government to go for gradual liquor prohibition took toll on income from excise duties.

Liquor prohibition is an ideal move and good for the civil society there if implemented effectively, but the government should focus on alternative income sources to compensate for the revenue loss on this front.

It can partly redeem this loss if it goes for accelerated industrial development. But that's a topic for a different day.

Andhra Pradesh lost a major cash cow in Hyderabad when the City of Pearls went to Telangana in the 2014 bifurcation. Now, it needs a similar cash cow if the Jagan government has to continue all of its welfare schemes without any financial hindrance in future.

For that to happen, one of the key steps the new government should take is that it should put capital city development back on right track. Frankly speaking, AP has a rare opportunity to develop its capital city from the scratch. The Jagan government should use that as an opportunity, not as a burden.

I worked in Dubai and Abu Dhabi, the major cities of United Arab Emirates (UAE), for over four years. Many people have a misconception about Dubai that it is oil-rich and survives on oil money.

But the fact of the matter is that Dubai doesn't have large petroleum reserves. The Emirate of Abu Dhabi is blessed with the huge oil reserves. Though Abu Dhabi and Dubai are part of the UAE as a nation, the two are independent emirates (states) and don't share revenues.

No surprise oil contributes just five per cent (5 per cent) to Dubai's economy now. Tourism accounts for a whopping 20 per cent!

When Dubai could build a marvellous and world-class city in the middle of desert and sand dunes, why can't Andhra Pradesh, which is endowed with beautiful coastline, entrepreneurial streak among its people and great agriculture base, build a world-class city?

We need to remember that Indians played, are playing and will play key role in the inspirational growth of Dubai. AP can tap the talent and entrepreneurial skills in the country to build its dream city.

I am dead sure that the development of the capital is an expensive process. And it will not bring votes for YSRCP in 2024. But a revenue-churning metropolis is essential for the effective implementation of the welfare schemes and freebies which bring votes.

The best example for that is right in the neighbourhood. KCR couldn't have done what he has been doing for the past six years had Telangana not been blessed with bustling metropolis like Hyderabad.

Going by the signals, Chandrababu Naidu is yet to find a reason for his ignominious defeat at the hands of Jagan. But his excessive publicity on Amaravati and investments has cost him dearly as tangible results did not match to the hype. Frequent somersaults on key issues like special category status also had a role.

But politicians in power should always maintain a dexterous balance between key priorities. While Naidu excessively focused on development while ignoring the welfare part, Jagan is currently focusing excessively on the welfare.

The YSRCP leader should learn a lesson from Naidu's defeat and maintain a nice balance between the welfare and the development.

For a poor and developing country like India and the States within, welfare measures are non-negotiable. But development and capital investment are also equally important. If a country and state want to implement welfare schemes, it needs large and continuous flow of funds.

With Fiscal Responsibility & Budget Management (FRBM) norms in place, the State governments can't borrow left, right and centre. It is much more difficult for AP which suffers from large fiscal deficit, lacks industrial base and a proper capital.

Moreover, Jagan took a laudable, game-changing decision to introduce English medium in the government schools. The main objective of this move is to make youngsters employable. But where are the jobs in Andhra Pradesh?

These 'employable' youngsters' will have to go with begging bowl to Hyderabad, Bengaluru, Mumbai in search of jobs. Otherwise, they have to head to the Gulf and the Western World and live there as secondary citizens.

It's time we recognise the fact Indians will no longer be welcome in the West as well as the Gulf as the presence of working Indians is affecting the livelihood of the locals. This can be gauzed from the election victory of leaders like US President Donald Trump who are stoutly opposing immigrations from low-cost countries like India.

Even in the oil-rich Middle East, efforts are under way to replace outsiders with local people in jobs. This trend will gain momentum as population increases in those countries and countries like India will have to find ways to generate jobs for their citizens instead of leaving them at the mercy of other countries. It's no different for AP.

It is pertinent to mention here that late Y S Rajasekhara Reddy played key role in the development of Hyderabad though his predecessor Chandrababu Naidu started the process.

World-class Hyderabad International Airport, 158-km Outer Ring Road, and PV Narasimha Rao Expressway that connects Hyderabad city to airport owe their existence largely to YSR. These three projects literally changed the profile of Hyderabad for better and forever.

Jagan has a similar opportunity to leave his footprint on Andhra Pradesh and its future. More than 35,000 acres of land is at his disposal for building the capital.

A budgetary allocation of Rs 5,000 crore to Rs 10,000 crore a year will be more than enough for the AP government to build a world-class capital in next 10 years.

That's worth spending as the capital city, like Polavaram, will be a boon for the State in long run. Given his entrepreneurial streak, Jagan can build a better capital with better designs than Naidu envisaged. Hope he does, for sake of his people.

Last word: Voters are wise, but they are not visionaries. If that's not true, India would have become a super-rich country and superpower long back.

It's the responsibility of the leaders in power to have a vision for the area and people they rule. And many voters don't even understand manifestos!