INCOME AND EXPENDITURE
Telangana is a victim of plunder of its financial resources in the integrated state of Andhra Pradesh.
On the eve of formation of Andhra Pradesh itself, Telangana was a surplus area with regard to its Revenue Income and Expenditure, where as Andhra was a deficit state.
Underscoring the dangers involved in the amalgamation of a surplus area with a deficit state, the States’ Reorganization Commission recommended continuance of Telangana as a separate state.
Yet, the amalgamation took place because of the manipulative politics; but it was not unconditional.
One of the conditions of merger of Telangana with Andhra was not to allow diversion of Telangana’s surplus income for the benefit of the other region. But this condition, like several others, was observed more in its breach all through.
Consequently, Telangana is lagging behind the other region in all spheres of its development.
Whenever the question of formation of
The Backdrop:
When the idea of forming the erstwhile Andhra state, segregating the Andhra area from the then composite state of
Is the proposed
Elaborating further the inadequacies of the proposed Andhra state and the difficulties it was bound to face, Dr. Ambedkar said:
“Andhra is
Source: Writings and Speeches of Dr. BR Ambedkar (Vol)
Yet,
The sales tax receipts of the Andhra region are very negligible:
As expected and explicitly expressed, the financial troubles for the newly formed Andhra state started right from the day of its inception! It is discernible from the statements made by panic-stricken political functionaries of the state government and the analyses made in the media. To cite a few examples:
Neelam Sanjeeva Reddy, the then Deputy Chief Minister of Andhra state, expressed his agony about the financial problems of the state on the floor of the State Assembly as under:
Wherever we go, the farmers are asking for irrigation and electricity facilities. Where can we fetch them from? (25-02-1954)
Now we are dragging on with a deficit of 18 crore rupees. We are not in a position to pay salaries to the staff unless the central government comes to our rescue. (05-11-1953)
Andhra Government had to borrow 6 crore rupees in the very first year of its inception. (25-01-1956)
Bezawada Gopala Reddy, the then Chief Minister of the Andhra state, too expressed anxiety over the financial plight of the new state in the following words:
Out of 22 crore rupees of revenue receipts, administrative expenditure alone is eating away 20 crores. (Andhra Assembly 15-09-1954)
He expressed similar concern outside the assembly also:
Regular payment of monthly salaries to the teachers too has become a difficult exercise.
(Andhra Patrika: 01-10-1953)
On the ongoing debate about the innumerable problems confronting the then Andhra state, a reputed Telugu daily of those times, Andhra Patrika, made these comments:
The financial condition of the
(03-12-1954)
There is a huge deficit in the revenue of the State. It is not at all possible to take up any new projects.
(09-02-1956)
Now there is no possibility of using revenue receipts for developmental works; nor is there any likelihood of it even in the coming five years. Floating loans for developmental works has become impossible.
(06-07-1955)
It was at that time the Government of India had set up the States Reorganisation Commission (SRC) in order to examine the question of reorganising the Indian states and make recommendations there for. The SRC, in its report, categorically and unequivocally recommended retention of Telangana as a separate state. In this context the SRC elaborately listed out the reasons for making this recommendation. With regard to the financial soundness of the Telangana region vis-à-vis the chronic financial deficit and uncertainty of the then Andhra state, the SRC made the following observation:
The existing Andhra state has faced a financial problem of some magnitude ever since it was created; and in comparison with Telan- gana, the existing Andhra state has low per capita revenue. Telangana, on the other hand, is much less likely to be faced with financial embarrassment… Whatever the explanation may be … the result of the unification will be to exchange some settled sources of revenue, out of which development schemes may be financed, for financial uncertainty similar to that with which Andhra is now faced. Telangana claims to be progressive and from an administrative point of view, unification, it is contended, is not likely to confer any benefit on this area. (
Such was the pathetic plight of the erstwhile Andhra state! It was a real hand to mouth struggle in the areas of finance and development. For coming out of such a mess, all hopes of Andhra leaders were pinned down on the formation of Visalandhra (the present Andhra Pradesh). But the SRC was not in favour of unsettling the financial stability of Telangana for bailing out the then Andhra state from its chronic financial instability.
A Conditional Merger:
Then, the Andhra leadership indulged in lobbying and manipulative politics. Innumerable promises of protecting the interests of Telangana were made in the event of its merger with the Andhra state. The national leadership succumbed to the pressure of the Andhra leaders and gave green signal for the merger of surplus Telangana with the deficit Andhra, subject to providing several statutory safeguards to the people of Telangana. It was made abundantly clear that the merger was neither unconditional nor would it be eternal. The political leaders of Telangana (not the people) trusted the national leadership and entered into an agreement which has come to be known as the Gentlemen’s Agreement. One of the important clauses of that Agreement was to prohibit the diversion of Telangana revenue surpluses to meet the deficit of Andhra region. The relevant clause reads as follows:
The expenditure of the Central and General Administration of the State should be borne proportionately by the two regions and the balance of income from Telangana should be reserved for expenditure on the development of Telangana area.
Violation of Conditions:
But the violation of this clause, along with several other clauses of the Gentlemen’s Agreement, started from the very first day of the formation of Andhra Pradesh by the very same gentlemen who inked their signatures on the Agreement. These violations included, among other, the diversion of the revenue surpluses of Telangana to meet the deficit of Andhra region. Regarding the quantum of Telangana revenues diverted to the Andhra area, it was established by the enquiries instituted by the Government of India and the State Government that between 1.11.1956 (i.e. the day of formation of the State) and 31.03.1957, spanning a period of just five months, more than 41% of the Telangana revenue income was diverted to the Andhra region (See Table II) to meet its insurmountable financial problems. And this illegal and unethical diversion did not stop with those five months; it continued unabated. This became one of the principal reasons for the revolt of people of Telangana in 1968-69 and reiteration of their demand for separation of Telangana from the forced merger with Andhra.
Telangana Surpluses – Pre 1969 Scenario:
Consequently, the governments of the time at the Centre and in the State were compelled to assess the quantum of Telangana surpluses diverted to Andhra region for the period from 01.11.1956 to 31.03.1968. The first exercise on this count was done by K. Lalit, an Officer on Special Duty, deputed by the Comptroller and Auditor General of
| Table - I | |||||||
| Revenue Receipts of Andhra and Telangana from 1-11-1956 to 31-3-1968 | |||||||
| (Rs. In Lakhs) | |||||||
| S.No. | Year | Andhra | % of Total | Telangana | % of Total | Total | % of Total |
| 1 | 1956 - 57 | 1,450.01 | 57.00 | 1,093.88 | 43.00 | 2,543.89 | 100 |
| 2 | 1957 - 58 | 3,987.84 | 63.98 | 2,244.79 | 36.02 | 6,232.63 | 100 |
| 3 | 1958 - 59 | 4,085.05 | 60.50 | 2,667.18 | 39.50 | 6,752.23 | 100 |
| 4 | 1959 - 60 | 4,743.30 | 57.88 | 3,451.10 | 42.12 | 8,194.40 | 100 |
| 5 | 1960 - 61 | 5,176.53 | 60.69 | 3,352.36 | 39.31 | 8,528.89 | 100 |
| 6 | 1961 - 62 | 4,766.00 | 55.57 | 3,810.83 | 44.43 | 8,576.83 | 100 |
| 7 | 1962 - 63 | 6,027.51 | 57.22 | 4,506.55 | 42.78 | 10,534.06 | 100 |
| 8 | 1963 - 64 | 7,567.08 | 59.78 | 5,091.79 | 40.22 | 12,658.87 | 100 |
| 9 | 1964 - 65 | 7,780.57 | 59.14 | 5,375.91 | 40.86 | 13,156.48 | 100 |
| 10 | 1965 - 66 | 7,769.37 | 56.07 | 6,087.29 | 43.93 | 13,856.66 | 100 |
| 11 | 1966 - 67 | 8,681.33 | 55.21 | 7,044.00 | 44.79 | 15,725.33 | 100 |
| 12 | 1967 - 68 | 9,866.16 | 59.48 | 6,720.47 | 40.52 | 16,586.63 | 100 |
| Total | 71,900.75 | 58.29 | 51,446.15 | 41.71 | 123,346.90 | 100 | |
Source : Report on the Quantum of Telangana Surpluses (Kumar Lalith Report) Govt. of A.P.,1969
It is clear that the contribution of Telangana to the State’s Revenue receipts was, on an average, 41.71% of the total receipts during the initial 12-year period of State’s existence, as against 58.29% of the other region. It should be remembered that the population of Telangana during that period was around 35% of total population of the State, while that of Andhra was about 65%. It means that the per capita tax effort was higher in Telangana than in Andhra.
Table - II
| Transfer of Telangana Surplus Revenue Income to Andhra from 1-11-1956 to 31-3-1968 (Rs. In Lakhs) | ||||
| | | | (Rs. In lakhs) | |
| Year | Receipts | Expenditure | Surplus Transferred | % of Revenue Transferred |
| to Andhra | to Andhra | |||
| | | |||
| 1956 -57 | 1,093.88 | 644.58 | 449.30 | 41.07 |
| 1957- 58 | 2,244.79 | 1,896.67 | 348.12 | 15.51 |
| 1958- 59 | 2,667.18 | 2,242.69 | 424.49 | 15.92 |
| 1959- 60 | 3,451.10 | 2,598.16 | 852.94 | 24.72 |
| 1960- 61 | 3,352.36 | 3,000.34 | 352.02 | 10.50 |
| 1961- 62 | 3,810.83 | 3,381.37 | 429.46 | 11.27 |
| 1962- 63 | 4,506.55 | 3,837.69 | 668.86 | 14.84 |
| 1963- 64 | 5,091.79 | 4,228.95 | 862.84 | 16.95 |
| 1964- 65 | 5,375.91 | 4,764.70 | 611.21 | 11.37 |
| 1965- 66 | 6,087.29 | 5,555.39 | 531.90 | 8.74 |
| 1966- 67 | 7,044.00 | 6,376.45 | 667.55 | 9.48 |
| 1967- 68 | 6,720.47 | 6,526.31 | 194.16 | 2.89 |
| Total | 51,446.15 | 45,053.30 | 6,392.85 | 12.43 |
Source : Report on the Quantum of Telangana Surpluses (Kumar Lalith Report) Govt. of A.P., 1969
It is also clear that the diversion of Telangana revenue income to the Andhra region went on throughout that period, unabated. During the very first year and itself, it was a staggering 41.07% of Telengana revenues. During 1956-57 1967-68 it was, on an average, 12.43% .
The condition stipulated in the Gentlemen’s Agreement was essentially related to the Revenue Income and Revenue Expenditure and the resultant Revenue Surplus or Deficit. It was not very much relevant to the Development Expenditure. According to the norms laid down by the Planning Commission and the Government of India, the major determinants of allocation for development expenditure are: population, geographical area, per capita tax effort and per capita income. At that point of time the population of Telangana was more than 35% of the State’s population. The per capita tax effort of Telangana was higher and the per capita income was lower, as compared to the Andhra region. On all these counts the Telangana region was entitled to around 40% percent of the allocation out of the total development expenditure of the State for that period. But, while computing the Telangana surpluses vis-à-vis the development expenditure, it was strangely restricted to 33.3% of the total expenditure. It was not even proportionate to the population of the region; leave alone the area’s higher per capita tax effort and lower per capita income. As a result, the quantum of Telangana surpluses determined was far lower than what the region was legitimately entitled to.
Whatever be the figures arrived at, the indisputable fact underscored by Lalit and Bhargava Committees was the blatant and constant diversion of Telangana income to the Andhra region violating all the norms laid down, all the safeguards given and all the agreements arrived at as pre conditions for the merger of Telangana with Andhra. Thereby the colossal recurring damage caused to the development of Telangana cannot be easily assessed. It was aptly summed by the Bhargava Committee in the following words:
If the amounts of surplus found which remained unspent in any year had actually been spent in that very year or in the year succeeding, the amount of development which could have been brought about by such amount could have been much larger than would be possible on 31st March 1968 or thereafter. The obvious reason is that there has been a continuous rise in the price level. The result of this rise in prices is that, for doing the same amount of development work which could have been done earlier, the amount that will have to be spent after 31st march 1968 would be very much larger… If these amounts had been spent in those very years when they were available for development, the prompt execution of the works of development would have given its own return and that return would have further accelerated the pace of development.
(Report of the Bhargava Committee)
These observations of the Bhargava Committee get reflected in various spheres of development that has taken place in the Andhra region at the expense of the Telangana region. For instance:
i) By the time the state of Andhra Pradesh was formed, two major irrigation projects of Andhra area namely, the Godavari barrage at Dhavaleswaram and the Krishna barrage at Vijayawada were dilapidated and needed immediate renovation and reconstruction. The then Andhra state was totally bankrupt and was completely helpless to take up those works. The merger of Telangana became a boon for the Andhra region. The surplus revenues of Telangana came handy to the Andhra bosses of the new state. These two projects which were almost dead were not only reconstructed but the ayacut was also substantially increased. These two projects put together now irrigate more than 25 lakh acres in karif and nearly half of it in rabi.
ii) Had those surpluses of Telangana region been spent on the Sriram Sagar Project, at least half of the Telangana region would have become prosperous – perhaps more than the now affluent delta region. The construction of Sriram Sagar Project was deliberately kept in abeyance to facilitate the diversion of Telangana surplus revenues to the Andhra region. It is now more than four decades that the work on this project was initiated; but not even half of it is completed. Out of 20 lakh acres of ayacut proposed to be brought under this project, not even 5 lakh acres get irrigation facilities, that too for one crop, even to this day.
Will the powers that be able to assess the recurring and cumulative loss caused to Telangana on this score?
Who will be able to determine the quantum of compensation and who will pay it to undo the colossal damage done to the region and its people?
Telangana Surpluses – The Post 1969 Scenario:
The experience of the people of Telangana in the integrated state of Andhra Pradesh was so bitter, during the initial twelve year period itself. In order to prevent the recurrence of similar experience regarding the income and expenditure of the Telangana region, it was reiterated that all the details of the income and expenditure for Andhra and Telangana regions should be shown separately in the annual budget of the State. It was followed for a couple of years; but was given up abruptly without any valid reasons. As a result, the Andhra bosses got a free hand to do anything to deprive Telangana of its rightful share in the financial allocations. And everything went on unnoticed, and is still going on clandestinely. It has not stopped at that. On the contrary, the Andhra leadership has been arguing, day-in and day-out, that the Telangana region is getting a lion’s share in the financial allocations while the other regions are foregoing their rightful share. Ironically, and also sadly, the Telangana leadership never dared to question this untenable claim of the Andhra leadership; obviously for its own survival. As a result, the damage caused today to the Telangana region from 1970 onwards is much more than the damage done during the preceding spell of 12 to 14 years. The fact, even to this day, is that the financial resources which legitimately belong to Telangana are being diverted for the development of other regions. In the absence of related details in the budget statements and lack of transparency in the functioning of the State Government, one has to decipher the details from a variety of other documents.
Rosaiah’s Statement – An Analysis:
An analysis on this count is made on the basis of the statement made by K. Rosaiah on the floor of the State Assembly in March 2007. It clearly establishes the fact that the revenue income of Telangana is more than that of the other regions put together; and, the expenditure incurred in this region is far less than its income. Rosaiah tried to camouflage the issue, yet he could not cover up the stark realities.
The Details:
Five members of the AP Legislative Assembly asked the then Finance Minister, K. Rosaiah, to furnish the region-wise details of revenue income and expenditure for a period of three years. In reply to this question the Finance Minister placed details on the table of the House, during its Budget Session in March 2007. They could be seen in Tables III and IV:
Table-III
a) Revenue:
| | Region | Year-Wise Revenue (Rupees in Crores) | |||
| 2003-04 | 2004-05 | 2005-06 | 2006-07(Jan/07) | ||
| 1. | Andhra | 2796 | 3494 | 3702 | 3690 |
| 2. | Rayalaseema | 730 | 867 | 1004 | 987 |
| 3. | Telangana | 5565 | 4725 | 5935 | 6093 |
| 4. | Head quarters | 5095 | 8311 | 9708 | 9319 |
| | Total | 14186 | 17397 | 20349 | 20089 |
| 5. | Others | 3220 | 3283 | 4055 | 4980 |
| 6. | Grand Total | 17406 | 20680 | 24404 | 25069 |
Source: LAQ NO.7406 (Starred) of A.P. Legislative Assembly Session – 9
Table-IV
(b) Expenditure:
| S.No | Region | Year-Wise Plan Expenditure (Rupees in Crores) | |||
| 2003-04 | 2004-05 | 2005-06 | 2006-07(Jan/07) | ||
| 1. | Andhra | 3848 | 3799 | 4532 | 3489 |
| 2. | Rayalaseema | 2150 | 2411 | 2684 | 2881 |
| 3. | Telangana | 5158 | 5546 | 711 | 5987 |
| 4. | Head Quarters | 706 | 893 | 976 | 682 |
| | Total | 11862 | 12649 | 15303 | 13039 |
Source: LAQ NO.7406 (Starred) of A.P. Legislative Assembly Session - 9
The statement made by K. Rosaiah Is analysed in two parts: one pertains to Revenue Income and the other to Expenditure.
Revenue Income:
The region-wise break up given by K. Rosaiah is not only intriguing but is also inexplicable. It is not clear as to on what basis and with what authority he had segregated headquarters from the rest of the Telangana region. It goes contrary to the established policy of the State Government contained in Letter No 7193/68-1 dated 03.02.1969 of the Finance Secretary of the State Government which inter alia elaborated the principles of computing the income of different regions. The relevant extract of the Letter says:
The receipts accruing in the respective areas will be credited to those regions while the receipts at the headquarters will be credited to the Telangana region except in cases where they specifically relate to Andhra region.
Similarly the Finance Minister had not given the region-wise breakup of the receipts under the Head ‘Others’. These two are evidently aimed at artificially trimming the revenue income of Telangana. In spite of this jugglery, he could not hide the fact that even if the income of the Headquarters is not taken into account, revenue receipts of Telangana continue to be far higher than the revenue receipts of Andhra and Rayalaseema regions put together. It could be clearly seen in the following Tables:
| Table – V Region wise Brake up of Revenue Income Excluding | ||||||
| | ||||||
| S. No | Region | Year-Wise Revenue (Rupees in Crores) | |||
| 2003-04 | 2004-05 | 2005-06 | 2006-07(Jan/07) | ||
| 1. | Andhra | 2796 (30.75%) | 3494 (38.45%) | 3702 (34.78%) | 3690 (34.26%) |
| 2. | Rayalaseema | 730 (8.02%) | 867 (9.54%) | 1004 (9.43%) | 987 (9.16%) |
| | Total of Andhra & Rayalaseema | 3526 (38.77%) | 4361 (47.99%) | 4706 (44.21%) | 4677 (43.42%) |
| 3. | Telangana | 5565(61.23%) | 4725 (52.01%) | 5935 (55.79%) | 6093 (56.58%) |
| | Total of Regions | 9091(100%) | 9086(100%) | 10641(100%) | 10770(100%) |
By furnishing these figures, K. Rosaiah had admitted that even without reckoning the revenue receipts of the Headquarters, Telangana’s contribution to the State’s revenues is far higher when compared to the contribution of the other two regions, put together or separately as detailed below:
| Telangana between 61.23% and 52.01% |
| Andhra between 38.45% and 30.75% |
| Rayalaseema between 09.54% and 8.02% |
| Andhra & Rayalaseema between 47.99% and 38.77% |
What more evidence is required to prove that the contribution of Telangana to the State’s Revenues is always higher than the other two regions, even after showing the income of the Headquarters separately?
If the incomes of the Headquarters and Telangana are taken together, and rightly so, the contribution of Telangana on one hand, and Andhra and Rayalaseema put together on the other, the position would be as shown in Table VI:
| Table – VI Region wise Brake up of Revenue Income Including | |||||
| S. No | Region | Year-Wise Revenue (Rupees in Crores) | |||
| 2003-04 | 2004-05 | 2005-06 | 2006-07 (Jan/07) | ||
| 1. | Total of Andhra & Rayalaseema | 3526 (24.05%) | 4361 (25.06%) | 4706 (23.12%) | 4677 (23.28%) |
| 2. | Total of Telangana with Head Quarters | 10660 (75.95%) | 13036 (74.94%) | 15643 (76.88%) | 15412 (76.72%) |
| | Total of AP | 14186(100%) | 17397(100%) | 20349(100%) | 20089(100%) |
Therefore, the contributions of two principle regions of the State to the State’s revenues are as under:
| Telangana between 76.88% and 74.94% |
| Andhra & Rayalaseema between 25.06% and 23.12% |
If the region-wise details of Receipts under the Head ‘Others’ also are provided, the contribution of Telangana is bound to go still further up.
a) Plan Expenditure:
With regard to expenditure the information given by Rosaiah consists of only Plan Expenditure and not Revenue Expenditure. The purpose of not revealing the details of Revenue Expenditure is, obviously to hide the fact of overspending in Andhra region more than its Revenue Income permits and also to conceal the fact of under spending in Telangana, in spite of a higher level of Revenue Receipts in the region. In the absence of details of Revenue Expenditure, an assessment is made about the quantum of Plan Expenditure vis-à-vis the levels of Revenue Income. It could be seen in Table VII:
b) Expenditure:
| S. No. | Region | Revenue Income | Plan Expenditure | Excess(+) or Shortfall(-) of 4 over 3 |
| (1) | (2) | (3) | (4) | (5) |
| 1. | Andhra | 13,682 | 15,668 | 1,986(+) |
| 2. | Rayalaseema | 3,588 | 10,126 | 6,538(+) |
| 3. | Telangana | 22,318 | 17,402 | 4,916(-) |
| 4. | Head Quarters | 32,433 | 3,257 | 29,176(-) |
| | Total | 72,021 | 52,853 | 19,168(-) |
Source: LAQ NO.7406 (Starred) of A.P. Legislative Assembly Session – 9
The points to be noted here are:
i. During the period chosen by Rosaiah, Plan Expenditure in Andhra and Rayalaseema is far in excess of the Revenue Income of those regions.
Where that money has come from?
ii. During the same period, the Plan Expenditure in Telangana is far less than what the Revenue Income of the region facilitates.
Where that money has gone?
iii. The Plan Expenditure in the Headquarters, for the said period is far, far below its Revenue Income.
What has happened to that huge component of Revenue Income? In which region and for what purpose it was spent?
Answers to these questions will show as to which region is denied of its rightful share and which region is the beneficiary.
What about the Income from the sale of Telangana lands?
Another important factor which does not figure in the statement of Rosaiah is the income, running into several thousands of crores of rupees, accruing through the indiscriminate sale of Telangana lands, especially in and around the city of
Telangana’s Contribution to State’s Exchequer:
In this context the primary reasons for higher contributions of Telangana to the revenue income of the State need to be perused.
The Sales Tax receipts and Excise Collections constitute a substantial part (around 80%) of the State’s revenues; and the Telangana region is the major contributor to both these heads. To substantiate this position, region-wise details pertaining to Sales Tax receipts and Excise Collections for a few years, as an example, are furnished in Table VIII:
Table – VIII
Region-Wise Breakup of Sales Tax Collections
| S.No | Region | Collection | Percent of Total |
| 1 2 | Andhra & Rayalaseema Telangana | 2000-01 (Rs in Lakhs) 139,843.33 433,796.29 | 24.38% 75.62% |
| 3. | AP Total | 573,639.62 | 100% |
| 1. 2. | Andhra & Rayalaseema Telangana | 2003-04 (Rs in Lakhs) 179,211.75 583,902.25 | 23.48% 76.52% |
| 3. | AP Total | 763,114.00 | 100% |
| 1. 2. | Andhra & Rayalaseema Telangana | 2005-06 (Rs in crores) 206,983.75 646,370.94 | 24.26% 75.74% |
| 3. | AP Total | 853,354.69 | 100% |
Source: Directorate of Economics and Statistics, Govt. of AP; Statistical Abstracts of the Years concerned
Table – IX
Excise Collections in Telangana vis-à-vis the Total Collections in the State
(Rs. In Crores)
| S.No | Year | Total Collections (AP) | Collections in Telangana | % Of Telangana |
| 1 2. 3. | 2008-09 2007-08 2005-06 | 5753.43 4056.86 3436.63 | 4077.45 2966.13 2460.63 | 70.86% 73.11% 71.6% |
Source: Office of the Commissioner of Prohibition and Excise, Govt. of AP.
It is clear that the Sales Tax Receipts and Excise Collections together contribute nearly 80% of the State’s own tax revenues. State’s own taxes include, besides Sales Tax and Excise Collections, Taxes on Motor Vehicles, Stamps and Registration. Land Revenue, Professional Tax, Electricity Duty, NALA etc. This aspect is amplified in the following Table:
Table –X
Share of Sales Tax and Excise Collections in the Total Revenue from State’s Own Taxes
(Rs. In Crores)
| S.No | Year | Total Collections (AP) | Share of ST & Excise | % Of Total Tax Revenue |
| 1 2. 3. | 2008-09 2007-08 2006-07 | 33358 28794 23926 | 27605 23067 18904 | 82.75% 80.11% 79.01% |
Source: Socioeconomic Survey, 2009-10; Planning Department, Govt. of AP
It is evident that the revenues from other taxes of the State Government constitute only a minor part of the total revenue of the State’s Taxes.
In addition to the State’s own tax and the non-tax revenues, there will be a flow of resources from the Central Government. These flows include, among others, devolution of share in the central taxes and grants based on the recommendations of the Finance Commission, grants and assistance from the Planning Commission, funds for externally aided and centrally sponsored schemes.
While determining the state’s share in central taxes and grants-in-aid, the Finance Commission gives sufficient weightage to the backward regions within the state. Therefore, Telangana is entitled to a higher share in these revenues as well.
All these factors clearly establish that around ¾ th of Revenue income from the State’s own tax revenues and non-tax resources is contributed by the Telangana region. Regarding the share of Telangana in the flow of resources from the Central Government, it cannot be in any case less than 50% if the norms laid down by the Finance Commission and Planning Commission are scrupulously adhered to. The sum and substance of this entire scenario is that the contribution of Telangana to the State’s exchequer is more than the contribution of Andhra and Rayalaseema put together.
Expenditure on Telangana:
But the vital question to be answered is as to what proportion of these resources is spent for the Telangana region? There was a possibility of assessing this aspect until early 1970s because of the condition to show the details of region-wise income and expenditure, separately, in the annual budgets of the State. The State Government abruptly and arbitrarily abandoned this practice for the reasons that are so obvious. Therefore, a different methodology needs to be adopted to make an assessment.
Under the alternative method, evaluation can be made not necessarily on the basis of actual expenditure incurred, but also on the basis of targets achieved in physical terms. For instance, in the field of canal irrigation it could be a region-wise breakup of the extent of area getting irrigation facilities through that canal system under major and minor irrigation projects built and maintained by the Government. By any logic the ratios of land under canal irrigation between the regions will also reflect the ratios of expenditure as well. Similarly, the proportion of expenditure can be evaluated by the number of units on which the government spends, such as the number of teachers working in the institutions managed and aided by the government, the number of students studying or number of seats available in government funded educational institutions. In some cases figures relating to actual expenditure incurred can be culled out from the orders of the government issued periodically or sporadically to release funds for various activities of the government.
By adopting this methodology an assessment is made to arrive at the ratios of expenditure between Andhra and Telangana regions in certain vital spheres of State’s activity. In this context it is to be kept in view that the population of Telangana is about 41% of the State’s total population. Geographically it covers 41.67 % of the total area of the State. The region’s contribution to the State’s exchequer is substantially more than that of the other regions.
a) Canal Irrigation:
The Directorate of Economics and Statistics publishes, every year, the details regarding the area irrigated by different sources. Canal Irrigation is a major segment and the entire expenditure of constructing major and medium irrigation projects together with the canals and also their maintenance is borne by the government. Spending on irrigation projects is always a major component of the government’s expenditure. It is needless to say that distributive justice among the regions should be ensured in this regard. But the facts and figures published by the Government itself are appalling. During the year 2007-08 a total of 16, 10,000 hectares were irrigated under canal system. Out of this the area irrigated in Telangana was 2, 22,000 hectares, i.e., a mere 13.79%. Even during the best of times, it was, at the most, 18%.
Does it not mean that out of the total expenditure incurred on major and medium irrigation projects, Telangana accounts for less than 1/5 th of it?
b) Social Welfare:
The government spends huge amounts on social welfare programmes. Most of these programmes are regulated through the white ration cards issued to the people who are below the poverty line. The schemes include provision of subsidized rice, kerosene, sugar, housing, pensions, medicare (Aarogyasri) and so on. The white ration card has thereby become an important identification card for availing of the benefit of these schemes. Now the question is: What should be the number of cards issued in a region? It should naturally be related to the population of the area and poverty levels therein. The population of Telangana area is about 41%. Therefore the number of white ration cards issued in the region should be at least 41% of the total number of cards issued in the state, if not more, because of relative poverty factor in the region. But the number of white ration cards issued has all along been around 36-37%, according to the figures published by the Government. Consequently, the loss to the poor people of the region could be seen hereunder:
i) White ration cards 36-37%
ii) Subsidized Rice 37%
iii) Housing (Indiramma Houses) 33.85%
Sources: Socioeconomic Survey, 2009-10; Planning Department, Govt. of AP Directorate of Economics and Statistics
Medicare (Rajiv Aarogyasri) Figures are easily not available: but situation cannot be different as it also is dependent on the white ration cards.
c) Education:
i) Collegiate Education:
It is well known that the salary component paid to the teaching and supporting staff of these institutions constitutes more than 90% of the total expenditure. The region-wise details of staff working in such institutions and thereby the extent of expenditure incurred on them culled out from the official statistics for the year 2007-08 are given hereunder:
Table –XI
Number of Teachers in Government and Aided
| S. No | Region | No. of Teachers | Actual % | Entitlement % |
| 1. | Andhra | 8828 | 70.5 | 59.31 |
| 2. | Telangana | 3709 | 29.50 | 40.69 |
| 3. | Andhra Pradesh | 12,537 | 100 | 100 |
Source: Statistical Abstract, 2008; Directorate of Economics and Statistics, AP
A look at the quantum of Grant-in Aid released by the State Government to Private-Aided Colleges for the year 2008-09 throws some more light in this regard. It could be seen in the following Table:
Table –XII
Grant-in-Aid Released to Private Aided Degree Colleges (2008-09)
| S. No. | Region | Grant-in-Aid(in Rupees) | Actual % | Entitlement % |
| 1. | Andhra | 1,521,445,289 | 75.25 | 59.31 |
| 2. | Telangana | 49,89,60,900 | 24.75 | 40.69 |
| | Andhra Pradesh | 202,14,05,189 | 100 | 100 |
Source: Commissionerate of Collegiate Education, Govt. of Andhra Pradesh
This disparity has been there ever since the formation of Andhra Pradesh.
ii) University Education:
There are six (old) universities with regional jurisdictions offering facilities of general education. The disparities with regard to Per Capita Block Grant could be seen in the following Table:
Table –XIII
Per Capita Block Grant to the Six Old Universities (2004 to 2009)
| S. No | Region | University | Per Capita Block Grant |
| (In Rupees) | |||
| 1. | Andhra | I. Andhra | 35,500 |
| | II. Nagarjuna | 22,700 | |
| | III. Sri Venkateswara | 37,500 | |
| | IV. Sri Krishna Devaraya | 25,000 | |
| | | Avarage per capita | 30,175 |
| 2 | Telangana | i. Osmania | 17,400 |
| | | ii. Kakatiya | 14,000 |
| | | Average per capita | 15,700 |
Source: Budget Documents for the Years 2004-2009 presented to the AP Assembly
This has been going on for the last five decades.
iii.) Professional Education:
Cost-wise professional education, especially in the areas of Medicine and Engineering is the most expensive component of the system. Every additional seat enormously adds to the expenditure. The region-wise expenditure naturally depends upon the number of seats available in every region. Therefore, a perusal of region-wise breakup of seats in these courses also connotes the ratio of expenditure. Tables XIV presents this picture.
Table –XIV
Disparities in Facilities of Professional Education
| S. No. | Courses | No. of Seats | ||||||
| Total (AP) | Andhra | % of Total | Entitlement % | Telangana | % of Total | Entitlement % | ||
| 1 | Medicine | 18,000 | 1200 | 66.67 | 59.31 | 600 | 33.33 | 40.69 |
| 2 | Engineering | 3,760 | 2,625 | 69.82 | 59.31 | 1,135 | 30.18 | 40.69 |
Source: AP State Council of Higher Education
This has been the scenario, all through, not withstanding constant protests, agitations going on in the State, demanding the separation of Telangana from Andhra Pradesh.
d) Crop Insurance:
Table XV
Crop Insurance Fund Allocation for the year 2008 - 09
(Rs. In Lakhs)
| SNo. | Region | Amount Released | % |
| 1. | Andhra & Rayalaseema | 77,897.33 | 97.23 |
| 2. | Telangana | 2,223.14 | 2.77 |
| | Total | 80120.47 | 100 |
Source: Agricultural Insurance corporation of India
This discrimination is persistent; in fact, the Telangana region should get a major share of this fund as the region is more prone to frequent crop failures. What is important to underscore here is the audacity of the State Government to pursue its blatantly discriminative policies even in the midst of an intensified agitation in Telangana.
Table XVI
NABARD Funds 2008 – 09
(Rs. In Lakhs)
| S. No. | Region | Amount Allocated | % |
| 1. | Andhra & Rayalaseema | 12,236.42 | 93.79 |
| 2. | Telangana | 809.72 | 6.21 |
| | Total | 13,046.14 | 100 |
Source: G.O. Rt. No. 1845 dated 11-12-2009 of PR & RD Department, Govt. of A.P.
e) Agricultural Loans:
Table XVII
Long Terms Loans by AP Co-operative Bank (2006 - 07)
(Rs. In Lakhs)
| Total Loan (AP) | Andhra Share | % of Total | Entitlement % | Telangana Share | % of Total | Entitlement % |
| 13,797.96 | 10376.25 | 75.20 | 59.31 | 3421.71 | 24.80 | 40.69 |
Table XVIII
Short Terms Loans by AP Co-operative Bank (2006 - 07)
(Rs. In Lakhs)
| Total Loan (AP) | Andhra Share | % of Total | Entitlement % | Telangana Share | % of Total | Entitlement % |
| 314172.21 | 217354.41 | 69.18 | 59.31 | 96817.80 | 30.82 | 40.69 |
Source: AP State Co-operative Bank Ltd.
The cooperative sector of the State also is following the footsteps of the State Government in denying the Telangana region and its farming community their rightful share even with regard to repayable loans.
Conclusion:
These are only the samples. The situation is not different in other sectors as well. The net result is that the Telangana region is contributing more revenues to the State’s exchequer than the other regions; and, in turn, its getting far less than what it is entitled to in the realm of expenditure. It has been going on for more than half a century, causing immeasurable damage to the economy and people of the region. To epitomize it in one phrase the region has been “plundered”. It is nevertheless, not an unexpected development. The SRC itself was prophetic by observing,
One of the principal causes of opposition to Visalandhra also seems to be the apprehensions felt by the educationally backward people of Telangana that they may be swamped and exploited by the more advanced people of the Coastal areas...The real fear of the people of Telangana is that if they join Andhra they will be unequally placed in relation to the people of Andhra and in this partnership the major partner will derive all the advantages immediately while Telangana itself may be converted into a colony by the enterprising Andhras”.
(SRC Report:
What had happened later to Telangana because of its merger with Andhra is precisely what was predicted by the SRC!
Now the questions before are:
i.) Will the powers that be willing to assess the recurring and cumulative loss caused to Telangana in the integrated state of Andhra Pradesh?
ii.) Will they be able to determine the quantum of compensation to undo the damage done to the region and its people?
iii.) Who will pay the compensation?
iv.) Would it be possible to correct the situation and prevent its recurrence within the integrated state of Andhra Pradesh?
The only answer to these questions and the only remedy to all the maladies is restoration of status quo ante that existed prior to 1.11.1956, i.e., FORMATION OF
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