The first and foremost one is resource crunch. According to the Sri Krishna Committee, the new state’s position on resources can turn precarious, if due share is not provided from the income generated from Hyderabad, or if the Central government does not come to its rescue.
There might be a shortfall of Rs 17,000 crore for the ensuing financial year 2014-15. To be more precise, an exercise has been done based on the factual data available from the budget estimates of the combined state of Andhra Pradesh for the year 2013-14.
The overall picture of the budget began with an opening balance of Rs 117.07 crore and the receipts were estimated to be Rs1,61,731.8 crore, taking the total budget amount to Rs1,61,848.89 crore.
Revenue receipts were put at Rs127,772.19 crore (79. per cent of the total expenditure.
What remained a contribution to the plan outlay by way of income was just Rs 22.78 crore. The biggest challenge is to build capital assets.
A gross approximation is that we can be optimistic at 50 per cent of the proportion of the revenue of the combined state including capital receipts hovering around '80,000 crore. The least that can be expected would be around Rs 50,000 crore. The chances are that the income generating capacity would oscillate between the lowest of Rs 50,000 crore and the highest of '80,000 crore.
The worrying aspect of the fiscal situation of the new state centres around the public debt at the level of Rs 1,79,637.51 crore.
This was already distributed in the ratio of 58:42 between Andhra Pradesh and Telangana, thus Andhra Pradesh’s burden worked out to Rs1,04,189.46 crore.
The following are options open to the new government:
1) Invite private participation from industries in the form of BOT, BOOT or PPP. If this is done, the burden of revenue generation is to be passed on to the users/public in the form of taxes, cess, etc., which may attract criticism or resentment.
2) Seek loans from public or international agencies like World Bank. Borrowing from international agencies though has its own risk elements.
3) Mobilising donations from the public: Some of the enthusiastic organisations like ABN, Andhra Jyothi have given rise to a new mode of raising resources for the new state. The said electronic channel has started mobilising donations for the construction of new capital.
A still better course of action could be to open an account like the standard ‘CM’s Relief Fund’ on a permanent basis with the title ‘Seemandhra Development Fund’ and ask for donations from the public, philanthropists, industry and every other member of the state.
The new government can secure a tax exemption status for the donations made to this fund and thus make every transaction authentic and transparent.
The next is a Shakespearean dilemma: ‘to be or not to be’; To continue the schemes of the previous government or not.
A sizeable commitment was generated by the implementation of schemes such as fee reimbursement, pensions, and various other welfare measures. Besides these, certain agricultural and non-agricultural subsidies and incentives were offered. The irrigation projects that were already under implementation led to the committing of funds in a large measure. The real dilemma for the new government would be on this account.
On the other hand, the new promises made through the manifesto like the waiver of agricultural loans, enhancement of old age/destitute pensions also result in huge commitment.
The 13 districts of Andhra Pradesh are basically agrarian. Making agriculture a viable vocation is the other challenge. Agriculture in Andhra Pradesh is beset with problems right from the availability of seeds, fertilisers, pesticides and credit.
A systematic and committed effort would only lead to a meaningful beginning in this direction. Industry (except a few Central government undertakings at Visakhapatnam) is conspicuous by its absence in the new state. Except for a few rice mills in Godavari district, ginning mills in Guntur, there are no large industrial units in the Seemandhra region. Turning this region into an ‘industrial state’ is a stupendous task. Small size investments of Rs 4,000 or Rs 5,000 crore will not help.
At least investments of Rs 50,000 to Rs 60,000 crore can make a difference.
What is more worrying is the fact that agricultural activity is not supported by the agri-based nor the agro-based industries. It is in this backdrop, people’s hopes of the new state are high in the development of new ports, new airports, new roads, power plants, industrial corridors.
In addition, development of IT parks, pharma cities, gene-parks, tourist places require significant investments too.
Addressing the future of the youth (rural and urban) is also a great challenge. Only about 15 per cent of the graduates are employable with the required skills.
Even when the Indian economy has registered a growth rate of 9 per cent, employment has grown only at about 2.6 per cent. The mismatch between the skills required by the industry and the skills possessed by the graduates is another issue that needs our attention.
The new state government should focus its attention on this aspect and set up an organisation of the lines of National Skill Development corporation (NSDC).
The new state inherits a long coastline of 972 km. How best this natural endowment be utilised is the next challenge. The entire development activity of the state should be designed around this resource. Port development, tourism, promotion of domestic and international trade through high seas can really make it a Hong Kong or Korea.
Around 20 per cent of doctors, 30 per cent of the software professionals working in the United States hail from the coastal belt.
Lend a helping hand to build new Andhra Pradesh should be the slogan of the new government .
