The Hindu Business Line : TDP manifesto delineates `Vision 2020' goals

THE manifesto of the Telugu Desam Party for the ensuing Assembly elections states that "Vision 2020 is the instrument for achieving the goal of Swarnadhra Pradesh."

The Vision 2020 envisages a growth rate of 10.3 per cent per annum for gross state domestic product (GSDP) and a nine-fold increase in per capita income over a period of 25 years from 1995 to 2020. The share of industry has been stated to increase from 18 per cent in 1995-96 to 21 per cent in 2020-21.

Though this target appears to be modest, according to economists, Dr P. Venkatramaiah and Dr L.G. Burange, it implies a 13-fold increase in 25 years and annual growth rate of 11 per cent in the case of the industrial sector. It envisaged an investment of Rs 11,65,000 crore in this sector which was expected to absorb 8 million workers by 2020.

However, the two economists in their paper published in the volume on "Andhra Pradesh Development" brought out by the Centre for Economic and Social Studies, stated that the required annual growth rates of income as well as employment were "unbelievably high when compared with the past performance."

When the income from industrial sector increased three fold in 25 years preceding 1995-96, "can it grow 13 times in the coming 25 years?" Similarly, when it could absorb only 1.5 million workers in 25 years, "can it be raised to 8 million in the next 25 years,"they question.

Nevertheless, they said that the answer could be in the affirmative if the envisaged investment of Rs 11,65,00 crore materialised but doubted whether the State would be able to attract investments of that order.

The vision document had also recognised that investment of such a high magnitude was not possible with internal savings, but believed that the State could be made an attractive destination from foreign as well as domestic investors. Even if such funding was available, the two economists stated, it would not enhance the levels of living by nine times as envisaged in the document because of the flight of income in the form of profits.

They pointed out that the share of the industrial sector in the state domestic product had increased from 12 per cent in 1980s to 19 per cent in 1990s. However, the increasing share of the industry in the domestic product was not accompanied by increase in the share of employment.

The paper states that liberalisation process had led to a higher growth in the manufacturing sector in the nineties compared to eighties. But after the initial pent up demand for manufactured articles was satiated, the industrial sector was facing a recession. The cheap imports consequent to trade liberalisation as per WTO norms would also affect the demand for products of the domestic industry.

The infrastructure that was being developed in the State was also largely focussed on information technology sector to the "neglect to the industrial sector." The IT sector was growing because of export demand and there was very little domestic demand. "In the long run this cannot be sustained unless domestic demand grows."

The growth of domestic demand to a considerable extent would depend on the increase in the production of the material sector of which industrial sector was an important component, the two economists emphasised.

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