8th July 2022 | Telangana economy in Hyderabad State (Agriculture, Industry and Trade); Telangana economy in United AP (1956-2014)- Deprivation and Under development.

Mains Questions of the day:  

1.Explain the status of Telangana Economy during 1956-1970 phase. 

Introduction:

Write briefly about the socio-political condition of Telangana state during 1956-1970 period.

Body:

Explain the state of Telangana-Economy during 1956-1970 phase.

Conclusion:

Content:

• The united state of Andhra Pradesh was formed on November 1, 1956, with Hyderabad as its capital, after the merger of the then Andhra state.
• The economic system of Telangana was done in 3 phases.
• They are: 

• 1956-1970
• 1971-1990
• 1991-2014
• The period 1956-2014 can be divided into “3” parts regarding the state of Telangana.

• 1956-1970 Later stage of merger (1969 movement)
• 1971 1990 Major role of public sector in economy
• 1991 – 2014 Implementation of economic reforms, subsequent phase. 

First Phase (1956 – 1970):

• Implementation of Jagirdar Abolition Act 1949
• 1950 – Hyderabad Tenancy Act.
• The movement that took place in 1969 was a consequence of the development of Telangana in the state of Andhra Pradesh for 12 years from 1956.
• According to the regional committee report issued in 1969, the level of development in Telangana was higher than that of India. 
• The report emphasized that the level of development in sectors like agriculture, irrigation, education, broadcasting and transport was not even half of the national average.
• 1956-57 The total land under cultivation was 123.8 lakh acres in 1967-68. 
• As of 2016, it was at the same level of 124.2 lakh acres. 
• Similarly, the area under drainage. In 1956-57 it was 23 lakh acres and in 1967-68 it was only 26.47 lakh acres with little change.
• It should be noted that the increase in cultivated area and area under irrigation during 1966-68 was nominal.
• Telangana’s area under cultivation in Andhra state is 40% but Telangana’s share in key products was only 27%-35% by 1967-68.
• Animal hospitals are in ratio of 1:1.75 even though livestock is equal in both regions.
• Rural electrification cost less than a third 12.7 crore was supposed to be spent on rural electrification but only 10 crores was spent.
• 100 square miles despite spending 49% on road transport and broadcasting. The area is only 20 miles of road.
• According to Kumar Lalit’s report, the ratio of expenditure in Telangana – Andhra was supposed to be 2:2.5, but in reality it was 1:22.
• During the Second Plan period, the share of Telangana in Andhra Pradesh state revenue was 45% but the expenditure did not exceed 34%.
• Similarly, during the third Plan period, even though Telangana had a share of 42.6%, it did not spend more than 37%, and as a result, agricultural and industrial development did not get the required incentive.
• In early 1950s, people of Telangana region in Hyderabad state, started organizing themselves with a demand for separate state. In 1953 the Indian government appointed the States Reorganization Commission (SRC) to look into various statehood demands in the country. 
• During the period between 1955 September and 1956 November, the people of Telangana launched a series of protests demanding statehood by implementing the SRC recommendations. But intense lobbying by leaders from Andhra state in New Delhi resulted in the merger of Telangana region in Andhra state to form the Andhra Pradesh state.
• Telangana leaders insisted on a Gentlemen’s Agreement before the merger could take place. The agreement was signed by Andhra and Telangana leaders and provided safeguards with the purpose of preventing discrimination against Telangana by the Andhra leaders. However, the agreement was violated.

2.Analyse the impacts of implementation of economic reforms in the state of Telangana.

Introduction:

Write briefly about the reasons for the introduction of economic reforms in India. 

Body:

Describe the impacts of the implementation of economic reforms in Telangana State.

Conclusion:

• Economic growth in the post reform period has not been inclusive. 
• The pattern of development has aggravated inter-state inequality, widened rural-urban disparity and worsened intra-rural and intra-urban inequality.
• In the post-reform period, the growth was led by the private corporate sector.
• The share of the private corporate sector in investment increased while declining of Public sector investments.
• Increase of caual labour.
• The growth process in the post reform-period was widening regional inequality.
• The poorer states gained less from economic reforms and continued to remain poor while developed states other than Punjab gained the most.
• For inclusive economic growth, labour-intensive process of development is vital. 
• It could be achieved by incentivising the small and medium sized firms or farms, in the formal and informal sectors, and imparting education and skills to the people so that they could take advantage of opportunities created by small and medium enterprises.

Content:

• Economic growth in the post reform period has not been inclusive. 
• The pattern of development has aggravated inter-state inequality, widened rural-urban disparity and worsened intra-rural and intra-urban inequality.
• In the post-reform period, the growth was led by the private corporate sector.
• The share of the private corporate sector in investment increased from 28 per cent in 1991-92 to 41 per cent in 2007-08, while the share of the public sector declined from 43 per cent to 24 per cent.
• The private corporate sector led growth was associated with the rent seeking, under-pricing of public sector assets in the process of the privatisation of the public sector and transfer of public and private lands to the corporate sector. 

Increase in casual labour

• With regard to labour market, the employment increased at a low rate of 1.3 per cent per annum and decelerated in the recent years while the growth rate of Gross State Domestic Product (GSDP) accelerated to 7.1 per cent a year.
• The growth of the labour-intensive manufacturing sector has been slow and has been lagging behind the service sector, which is less labour intensive.
• Also, a high growth in the post-liberalisation period has been accompanied by increased informalisation and de-unionisation of workforce.
• Economically and socially deprived sections of society were mostly employed as casual labour.
• These are some of the worrisome features of the labour market.
• Coming to reduction of poverty, the absolute number of poor declined by a meagre one million between 1993-94 and 2004-05 whereas the decline was much higher at 38 million between 2004-05 and 2011-12. Yet there were an unacceptably high number of 270 million of poor in 2011-12. This apart, 80 per cent of the poor continued to be in rural India.

Widening inequalities

• The growth process in the post reform-period was widening regional inequality.
• The poorer states gained less from economic reforms and continued to remain poor till 2014-15 while developed states other than Punjab gained the most.
• Among the major states, Assam, Uttar Pradesh, Jammu & Kashmir, Jharkhand and Madhya Pradesh lagged far behind on level of GSDP per capita as well as growth. On the other hand, Kerala, Andhra Pradesh, Uttrakhand, Gujarat, Haryana and Himachal Pradesh witnessed impressive growth.

Creating employment:

• The growth would be affected and “may also lead to social disarticulation”.
• For inclusive economic growth, labour-intensive process of development is vital. It could be achieved by incentivising the small and medium sized firms or farms, in the formal and informal sectors, and imparting education and skills to the people so that they could take advantage of opportunities created by small and medium enterprises. 

Implementation of economic reforms in Telangana state: 

• Economic reforms in India picked up pace after the 1990s.
• The implementation of economic reforms in the state of Andhra Pradesh also took place almost at the same time. The reforms affected all sectors of the economy.
• A direct impact on the agricultural sector has been seen since the mid-1990s. The WTO Agreement came into force.
• After 1997, protections for commercial movements were removed as trade reforms would allow for remunerative prices in the agricultural sector.
• Productivity markets in the country were also liberalized and the private sector was given an opportunity. Government expenditure has been reduced on several key aspects. The impact of reforms has widened the gaps between economic sectors, between states, between regions within states, and between urban and rural sectors.
• In the context of the economic reforms undertaken by Andhra Pradesh state, it is known how the impact on Telangana’s economy has been.
• Another development during this period was the introduction of district wise revenue assessment process from the year 1993-94. So it is possible to estimate gross domestic income and per capita income of Telangana.
• Similarly, what is the composition of various sectors of the economy? What is the composition of the districts? It is possible to analyze the factors such as how these are changing between the years 1993-94 to 2013-2014.
• From 1993-94 to 2009-10, although the per capita income of the state was lower than the per capita income of the country, the annual growth rate of the state was higher than that of the country.
• Moreover, in 2009-10, the credit growth rate (-0.01) was recorded. 1994-95 The highest growth rate (0.47) was recorded in the state.
• 2005-06 to 2007-08 A single growth rate (0.08%) has been recorded in the country.

Prelims of the day:

1) Consider the following statements regarding Telangana 

1. In 1956-57, the net irrigated area in Telangana as a proportion of net sown area was around 19%. 
2. the share of net irrigated area in the net sown area was 33.0 percent by 1967-68.

Which of the above statements are incorrect? 

1. Only 1
2. Only 2
3. Both 1 and 2
4. None of them

Answer: B

Explanation: 

Irrigation is the lifeline for the development of the agricultural sector: 

• In 1956-57; in Telangana, the net irrigated area as a proportion of net sown area formed 18.5 percent. 
• It increased to 21.3 percent by 1967-68. But in the Andhra region the share of the net irrigated area in the net sown area was 33.0 percent in 1967-68.

2. Arrange the following irrigation sources in increasing order based on the net irrigated area under them by 2011-12 in Telangana?

1. Bore wells
2. Canals
3. Tanks
4. Other wells

A. 3-2-4-1

B. 2-3-4-1

C. 3-2-1-4

D. 2-1-3-4

Answer: A

Explanation: 

3. Consider the following:

1. Deficit budget
2. Not having Coal deposits 
3. Low per-capita income

Which of the above problems of the people of the Andhra State were solved all at once with the merger of the Andhra state with Telangana in 1956?

1. 1 and 2
2. 2 and 3
3. All of them
4. 1 and 3

Answer: C

Explanation: 

The Andhra State at the time of its formation (more precisely between the period 1953 to 

1956) had faced the basic problems of: 

(i) Not having capital city. 

(ii) Not having Coal deposits, 

(iii) Inadequate water sources, electricity, mineral wealth and raw materials, and 

(iv) Low per-capita income 

(v) Deficit budget 

These problems of the people of the Andhra State were solved all at once with the merger of 

the Andhra state with Telangana. 

4.Which of the following committee was established by the government of India to assess the financial and other implications of forming a united Andhra state comprising Telugu-speaking people?

1. Justice Wanchoo committee
2. Kumar Lalith committee
3. Jayabharath reddy committee
4. JM Gilglani committee

Answer: A

Explanation:

Justice Wanchoo was entrusted to report on the financial and other implications and the questions to be considered in implementing the decision to establish an Andhra State consisting of Telugu-speaking areas of the then Madras -State by the Government of India on 19 December 1952.

5.Consider the following statements 

1. Telangana constituted 55 percent of the area in erstwhile Hyderabad state
2. Telangana constituted 60 percent of the population in erstwhile Hyderabad state

Which of the above statements are correct?

1. Only 1
2. Only 2
3. Both 1 and 2
4. None of them 

Answer: C

Explanation: 

Telangana constituted 55 percent of the area and 60 percent in terms of population of the State Of Hyderabad.

6.In which of the following year Bachawat Committee was established for the inter-state distribution of Krishna water?

1. 1969
2. 1973
3. 1970
4. 1975

Answer: A

Explanation:

The government of India appointed a committee in 1969 under the chairmanship of R.S. Bachawat,along with two other members, for the inter-state distribution of Krishna water. 

7.Which committee/report had suggested that the shares of expenditure on agriculture in Telangana and Andhra had to be in the ratio of 1:2 during the initial financial plan years?

1. Srikrishna report
2. Bachawat report
3. Justice Wanchoo report
4. Kumar Lalith report

Answer: D

Explanation: 

As per the recommendations of Sri. Kumar Lalit Report (Sri Kumar Lalit was deputed by the Comptroller and Auditor General of India. to calculate the quantum of Telangana. Surplus)’ the shares of expenditure on agriculture in Telangana and Andhra had to be in the ratio of 2:5. Whereas actual expenditure shares were at 1:2.

8.Which of the following person is not a member of the Gentlemen’s agreement?

1. B Ramakrishna Rao
2. Pattabi Sitaramaiah
3. M Chenna reddy
4. JV Narsingha Rao

Answer: B

Explanation:

Gentlemen’s agreement was signed by: 

(1) B. Gopala Reddy, Chief Minister of Andhra

(2) N. Sanjiva Reddy, Deputy Chief Minister of Andhra; 

(3) G. Latchanna, Minister in the Andhra Cabinet & Leader of the Krishikar Lok Party – a constituent of the United Congress Front which contested the Andhra elections (1955) and formed the Ministry; 

(4) A. Satyanarayana Raju, President, Andhra Provincial Congress Committee; 

(5) B.Rama Krishna Rao, Chief Minister, Hyderabad; 

(6) K.V.Ranga Reddy, Minister, Hyderabad; 

(7) Dr. M. Chenna Reddy, Minister, Hyderabad; and 

(8) J.V. Narsinga Rao, President, Hyderabad Provincial Congress Committee.

 9.In which of the following year Telangana has registered the highest growth rate in agriculture?

1. 2008-09
2. 1998-99
3. 2011-12
4. 1999-2000

Answer: B

Explanation: 

In agriculture, the highest growth rate 43.51%, was recorded in 1998-99.

10.Which of the following reports/committees are dealt with jobs and employment issues in Telangana?

1. Third supplementary report of Telangana regional committee
2. Jayabharath reddy committee
3. JM Girglani committee

1. 1 and 2
2. 1 and 3
3. 2 and 3 
4. All of them.

Answer: D

Explanation:  

All of them.