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What will be the economic viability of the two states that will come into being following the bifurcation of Andhra Pradesh (AP)? If you go by the report of Justice BN Srikrishna Committee, which studied the situation in the state, there is no problem on this front.
"Telangana as a new state can sustain itself both with and without Hyderabad. The other combination of regions - coastal Andhra and Rayalaseema -- together can also sustain themselves as a state; in fact they can sustain themselves separately," the committee cited in its 505-page report.
At present, AP is the fourth largest state in India in terms of area and fifth largest in population. It is ranked third in absolute size of gross domestic product (GDP) and 11th in the country in terms of per capita income. Gross state domestic product in 2011-12 was estimated at Rs 6,76,234 crore.
The Telangana region (excluding Hyderabad) ranks 15th in the list of 28 states in terms of absolute GDP and is listed above the states of Chhattisgarh, Jharkhand, Uttarakhand, Himachal Pradesh Goa and all northeastern states. Telangana (including Hyderabad) ranks 13th in GDP as well as in per capital terms.
Similarly, coastal Andhra ranks 13th in terms of GDP and 10th in terms of per capita GDP. The relatively deprived region of AP is Rayalaseema; but it ranks just a notch below the all-India average in per capita income and its overall GDP is higher than Uttarakhand, Himachal Pradesh, Goa and northeastern states except Assam.
Nevertheless, Hyderabad, with large concentration of economic activity, is going to be the bone of contention between Telangana and Seemandhra (Andhra-Rayalaseema). The city accounts for more than 50% of the state's own tax revenues.
In 2012-13, the state's own tax revenues reportedly stood at Rs 69,146 crore. Of this, Rs 36,400 crore came from Hyderabad and its surrounding Rangareddy district. The revenue from rest of Telangana was Rs 11,207 crore, Andhra Rs 16,729 crore and Rayalaseema Rs 4,810 crore.
According to the Srikrishna Committee, Hyderabad accounts for 99% of the total of around Rs 55,000 crore IT and ITeS exports from the state. Of the 72 notified special economic zones (SEZs) in the state, 37 are located in Hyderabad and Rangareddy. In fact, Hyderabad and Rangareddy districts account for 44% of the registered manufacturing and 39% of the construction activity of the Telangana region.
Other than Hyderabad, Rangareddy and the adjoining Medak and Nalgonda, manufacturing activity in Telangana has not seen much progress. The hinterland's mainstay is mining, poultry, food processing, dairy and farming. The state-owned Singareni Collieries is located in the region.
With an international airport, world-class educational and scientific institutions, a growing industry and the upcoming Rs 16,500-crore metro rail project, central location and suitable weather, experts say Hyderabad will now grow on its own. But if there has to be all-round progress across the region, the people in power have to ensure the development of the districts particularly Warangal, Adilabad, Karimnagar and Nizamabad, which are at a distance of 150 km and above from the city.
If Hyderabad is endowed with a modern airport, coastal Andhra has state-of-the-art seaports at Krishnapatnam, Kakinada and Visakhapatnam. While the Rs 7,300-crore Krishnapatnam is the largest private sector port on the east coast, Gangavaram in Visakhapatnam is a multipurpose all-weather deepest private port. Besides, Seemandhra (Andhra-Rayalaseema) has four airports at Tirupati, Vijayawada, Rajahmundry and Visakhapatnam.
The Chennai-Bangalore industrial corridor passes through Chittoor district, which is in Rayalaseema. The district also boasts having Sri City, the largest SEZ in the state that is attracting investments from many multinational companies. Nellore, on the other hand, is set to emerge as the largest power producer in the state with several power projects proposed to be set up in the district.
A Petroleum, Chemical and Petrochemicals Investment Region is coming up in the Visakhapatnam-Kakinada region in an extent of Rs 604 acres. Apart from a steel plant, Visakhapatnam has a pharma city where several pharmaceutical units are located. On the other hand, Krishna, Guntur, East and West Godavari districts, which are endowed with good irrigation facilities, are known as the rice bowl of India.
One of the negative factors with regards to bifurcation, according to the Srikrishna Committee, is that the land locked region of Telangana may lose out on access and opportunities to eastern coastline, which has major ports. Similarly, Seemandhra could lose a major market inherent in the huge population, business and market concentration of the city of Hyderabad.
