Industrialisation and economic growth may take a backseat in the Telangana region if the Union government gives Special Category Status (SCS) to the Seemandhra region, the successor state of Andhra Pradesh. Besides, tax incentives and other benefits might induce companies to shift their headquarters from Telangana to Seemandhra.
K Sudhir Reddy, president, Telangana Industrialists Federation, says that Seemandhra does not meet a single criteria for SCS. According to the Srikrishna Committee report, Coastal Andhra is a superior economic entity within AP with its per capita GDP much higher than the national average and stands 10th in ranking amongst the states of India. The committee said, “Coastal Andhra and Rayalaseema together can also sustain themselves as a state; in fact they can also sustain themselves separately.”
Reddy suggested that there has to be a similar package for the Telangana region for economic growth, thereby creating a level playing field across both regions. The Planning Commission allocates funds to states through Central assistance for state plans. SCS states enjoy concessions in excise and customs duties, income tax rates and corporate tax rates. This factor in the hands of a non-deserving state can have a devastating effect on other states, he said.
“Telangana is not
an industrially-developed state and hence there are possibilities of migration by the companies due to the special benefits,” Pennar Group chairman Nrupender Rao said, adding that “Parties have won a political battle but are yet to win the economic battle.”
On the repercussions on Telangana, Reddy said that outside of Hyderabad, the Telangana region has virtually seen no industrial development after the formation of Andhra Pradesh. On the other hand, several industries including IDPL, Allwyn, etc. have been systematically closed, he added.
Telangana’s reconstruction requires dedicated focus on industrial development. This is hampered by several problems including shortage of power and inadequate land bank. Telangana is most backward on the industrial front and needs to be given special packages as far as the taxes are concerned, is the argument.