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Mainstream, VOL LIII No 24 New Delhi June 6, 2015

Major Development Challenges facing the Telangana State

Saturday 6 June 2015, by C.H. Hanumantha Rao

It is a privilege for me to get this opportunity for meeting and interacting with the first elected representatives of the Telangana State. After its creation as a separate State, Telangana is better placed in several respects. It has the usual advantages of viability of a smaller State in terms of area and population as well as relative homogeneity of its history and culture. There is a predominance of weaker sections in the State—BCs, SCs, STs, and minorities together constituting nearly 90 per cent of its population. This underlines the need as well as possibilities of achieving inclusive growth because of political empowerment of weaker sections. They now have control over their resources and the power to shape their destiny.

The State of Telangana has the advantage of ‘surplus’ revenues on account of under-spending in the region in the past. On the basis of the data for the last 10 years, the projections made by the 14th Finance Commission show higher revenues and lower expenditure per capita for Telangana when compared to Andhra. The Bhargava Committee had brought out the same position for the 1950s and 1960s. This position persisted over the last 60 years, but remained hidden so far because the accounts related to the undivided State as a whole. Now it has come into the open because of bifurcation showing higher per capita revenue expenditure with revenue deficit for the Andhra Pradesh State and revenue surplus with lower per capita revenue expenditure for the Telangana State. Therefore, the misinformation being spread, particularly in Delhi, that Andhra Pradesh is a victim of bifurcation whereas Telangana is an undue beneficiary will not carry any credibility. The real position needs to be explained effectively by the elected representatives of Telangana.

However, the greatest asset for the Telangana State is non-monetary, that is, the emergence of peoples’ power out of protracted struggle, particularly over the last decade. This is exemplified by grater awareness among the people, their unity and capacity for community action. No doubt, they have high expectations from governance, but if their power is properly harnessed by securing their effective partici-pation in the Panchayati Raj institutions, the results can be encouraging from better designing of the schemes as well as ensuring greater accountability of performance. The spontaneous response to the Mission Kakatiya from different sections of the rural population for restoring and renovating tanks and the immediate positive response of the Chief Minister to the requests from the people for more grants towards restoration of certain tanks, as seen in Nalgonda the other day, is an encouraging development. The decline in surface irrigation and excessive dependence on well irrigation can be reversed by Mission Kakatiya.

The NITI Ayog has been set up at the Centre for strengthening the planning process as a ‘think-tank’ as well as cooperative federalism through greater participation of States. In fact, way back in the mid-eighties, when I was in the Planning Commission, the then Prime Minister, Rajiv Gandhi, had visualised making the Planning Commission basically a ‘think-tank’ working on long-term issues of development rather than becoming a bureaucratic machinery concerned with day-to-day issues. He had pioneered the introduction of Information Technology so as to benefit from globalisation and, at the same time, strengthen the Panchayati Raj institutions by empowering the common people with a view to ensuring to them the benefits of development. As a member of the task force he had constituted for this purpose, I could see how difficult it is to strengthen such grassroots institutions because of resistance from vested interests, even as the spread of information technology and globalisation was a resounding success.

The NITI Ayog as a think-tank at the national level can be effective in a large country like ours with enormous regional diversity only if decentralised planning below the State level is taken up seriously by strengthening the State Planning Boards as think-tanks with necessary competence and autonomy. But this issue was not even raised in the course of the recent debate when the NITI Ayog was constituted. Except in a few cases, State governments and their Planning Departments have always been lukewarm to the idea of strengthening the State Planning Boards with necessary autonomy. Periodically, there has been talk at the national level about strengthening decentralised planning in the country at the village, block and district levels. There was even a Centrally Sponsored Scheme for strengthening State Planning. I myself chaired a Committee on District Planning in the mid-eighties but the reports, even though they evoked much interest following their submission, are still gathering dust.

Resistance to decentralised planning by devolving functions, finances and functionaries from the State to local levels was conspicuous in Andhra Pradesh. A devolution index constructed by the National Council of Applied Economic Research showed this to be a mere 50 per cent for Andhra Pradesh as against 75 per cent for Kerala, 70 per cent for Karnataka and 67 per cent for Tamil Nadu. Contrary to Rajiv Gandhi’s perspective, instead of empowering people at the grassroots, the Andhra Pradesh Government preferred to float top-down schemes like ‘Rajiv Palle Bata’!

The Telangana State has emerged at a time when globalisation is in full swing, economies experiencing accelerated growth in their incomes with increasing inequalities. But increase in inequality in the context of globalisation is not inevitable, as theoretically there is no inherent ‘cause-and-effect’ relationship between them. If different regions and groups of people have equal access to infrastructure, assets, quality education, credit, etc., globalisation need not lead to the rise in inequalities. The prevailing inequitable socio-economic structure within the country and not globalisation as such is responsible for the increase in inequalities. As it is, globalisation, which could be initiated with a stroke of pen in India, has moved at a much faster pace than social change, including decentralisation of development, which is a more difficult process.

In China, for example, despite radical socio-economic transformation achieved in the early stages of development, globalisation in the recent period has led to high inequalities, higher than in India and even higher than in the USA, the land of capitalism. A study by the IMF attributed this to unequal access to quality education in China in the post-globalisation period. Also, lack of democracy there results in special privileges being enjoyed by the limited groups of people having political clout.

I would, therefore, like to conclude by suggesting that Telangana can derive maximum benefit from globalisation, in terms of growth as well as social equity, by trusting and empowering people through decentralisation of development and by ensuring universal access to quality education. The ‘KG to PG’ scheme, proposed by the Chief Minister, is highly promising in this context. There has been a great demand for education, especially from the poorer sections, as a means of employment in Telangana, particularly because of uncertain prospects from agriculture. I had noticed this way back in the early seventies in the course of my exercise as a member of the Committee on Perspective Planning for Telangana, and this trend continues as brought out recently by the Srikrishna Committee Report.

[Inaugural Address at the Interactive Orientation Programme for Elected Representatives (Telangana Rashtra Samiti) of Telangana State, Nagarjuna Sagar,

May 2-3, 2015]

The author is the Chancellor, the ICFAI Foundation for Higher Education, Hyderabad, and Honorary Professor, Centre for Economic and Social Studies, Hyderabad.