Exceptional growth of Telangana economy

It’s no surprise that the Telangana State has been ranked number one in the latest English news fortnightly India Today’s Best Economy State rankings and this speaks about the buoyant economy of the state. There has been a distinct upward shift in the growth path of the economy of Telangana since its formation in June 2014.

The average annual growth of State Domestic Product (GSDP) increased from 4.2% in the two years preceding the formation of the state (2012-14) to an impressive growth of 9.5% during the three years following the formation of the State (2014-17).

While the average annual growth of Telangana GSDP at 4.2% was lower than the all-India average of 6% prior to formation, it achieved an average annual growth of 9.5% in the three-year period after formation which is much higher than the national average of 7.4%.

Telangana stood at 6th place in the rankings of the States by average GSDP growth in the three-year period 2014-17. It is matter of great pride that Telangana achieved double-digit growth of 10.1 % in 2016-17. The higher growth in Telangana was the result of an improvement in the growth of manufacturing and the pickup in the services sector.

There has also been an impressive growth in the per capita income of Telangana. In the three years since its formation (2014-17), the average annual growth of the per capita income of Telangana has been 11.5% which is higher than the national average annual growth of 9.3 % in the same period. The per capita income of State increased from Rs 1,12,162 in 2013-14 to Rs 1,55,162 in 2016-17.

Thus, it is higher by Rs 52,393 as compared with the All-India per capita income of Rs 1,03,219. Telangana is among the top ten States in India in terms of per capita income. This apart, Telangana State stood first among all the States by clocking a growth of 21.10% in its own tax revenue in 2016-17 over 2015-16. As per the pre-actuals for 2016-17, own tax revenue in Telangana amounted to Rs 48,408 crore that year as compared with Rs 39,975 crore in the previous year.

Similarly, the state own tax revenue growth rate in 7 months this year compared to the same period last year is (from Rs 27,082 crore to Rs 31,285 crore) 17.5%. The overall state’s own revenue growth rate as of now stands at (from Rs. 28,587 crores to Rs. 34,473 crores) 20.58%.

The significant pick-up in the growth of the Telangana economy is entirely due to the proactive steps taken by the Government of Telangana. The first major problem that the Chief Minister and his government addressed after assuming charge was the acute power shortage in the State that was adversely upsetting both the industrial and agricultural production.

To tackle the problem once and for all, the State government added power generating capacity of 4,190 MW in the first two years as compared with the installed capacity of only 6,574 MW at the time of the formation of the State. The installed power generation capacity later reached 14,555 MW. New plants construction is going on for another 13,752 MW of power generation.

The government is now supplying power to the industries uninterruptedly and has decided to supply 24-hour power to the farm sector. For this CM has assured to allocate Rs 5,384 crores in the budget next year. The single-window system of industrial approvals known as “Telangana State Industrial Project Approval and Self Certification System (TS-I PASS)” contributed a lot to the growth of economy.

This policy together with uninterrupted power supply paved the way for faster industrial development of the State. Approvals were given within 15 days to 5,289 companies with an investment of Rs 1,11,688 crore and employment potential of nearly 2.4 lakhs. Out of these, 3,477 units have already commenced operations. There has been a global applause contributing further to the investments in the State. Telangana has been ranked number one in rankings of States in Ease of Doing Business.

The government has the wisdom of economy and is fully conscious of the sectors where benefits from the investments are the highest. However, the government is also spending funds to satisfy the basic needs for the welfare of poor and vulnerable. Thus, some money goes to sectors where benefits are not directly visible but contribute to the development of human resources and make them more productive. The government’s decision to go for land records rectification and updating also will add up to 2% growth rate.

Maintaining momentum of economic growth, fiscal prudence and maintaining debt sustainability are the three important factors that contribute for a better economy and the state adheres to them. The broad fiscal policy in India lies with the union government and states are to be alike but cannot be unlike. Telangana is among few select states to become eligible for availing the additional borrowing limit of 0.5% of GSDP taking the total eligibility of the state to 3.5% of GSDP on maintaining all the fiscal parameters within the limits laid down under the FRBM legislation and those laid down by the 14th Finance Commission.

Telangana also makes optimum use of funds under the centrally sponsored schemes and obtains timely release of funds from the center after submitting utilization certificates. Telangana joined UDAY scheme and has taken over Rs. 8923 Crores of Loans to make Discoms more financially healthy and to remove their financial burden.

When Telangana went for selling bonds they were sold overnight. For infusing and instilling confidence in the industry, 24-hour power was supplied to them without any power cuts. After uninterrupted supply for over three months they got confidence. Industries started working in three shifts.

This is how it contributed to the growth of economy. Further, growth of economy could be understood the way the economy rolls fast. For instance, due to copious rainfall paddy production in the state reached about 94 lakh metric tonnes. Four states purchased paddy from Telangana. Even small rice millers were happy.

Restoration of over 45,000 tanks, construction of many major and medium irrigation projects with an annual outlay of Rs 25,000 crore, plans to bring one crore acres of land under assured sources of irrigation and immense potential for the development of fisheries sector in the State added to growth in economy.

The government has started distribution of 84 lakh sheep to 4 lakh Yadava and Kuruma families at 75 per cent subsidy in a phased manner which would create tremendous wealth to them. The government’s commitment to the welfare of the poor and downtrodden is unwavering. As stated by the Chief Minister many a time, mere growth has no meaning and even legitimacy, if the deprived sections of the society are left behind.

Inclusive growth should not only ensure a broad-based flow of benefits and economic opportunities, but also encompass empowerment and participation. The initiatives taken by the government have been entirely guided by these compelling imperatives. Be it a two-bed room scheme or Aasara pensions or subsidized rice or Kalyan Laxmi and Shad Mubarak or any other welfare, are all aimed at, empowerment and participation of vulnerable sections.

The government started its journey slowly but steadily and has become economically very sound state. For nearly six decades, Telangana remained neglected despite its significant share in revenue collections and potential. Telangana is in the process of a major transition from a shackled economy to that of an economy which is being nurtured back to fulfill the long-pending just needs of its people.

Therefore, the growth prospects of Telangana cannot be defined by its past, nor can they be defined by the present. Because of the numerous initiatives taken by the government, the growth prospects are very bright, going by the performance of the State economy and the expansion of the growth possibilities. The reorganisation of the districts will create new growth centers around the new districts, which will further contribute to the growth momentum of economy. (Writer is CPRO of Telangana Chief Minister)

By Vanam Jwala Narasimha Rao