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The ‘new’ Andhra Pradesh, or Navyandhra as it is being described, faces varied challenges.
The new State starts off with a deficit budget of ₹13,000-15,000 crore and has to generate revenues and invest in developing new infrastructure.
CM Chandrababu Naidu has promised to waive farm loans and the financial burden, estimated at over ₹50,000 crore, will hurt the State’s finances.
The first challenge would be to get substantial assistance from the Centre. Higher-education institutions and research institutes need to be developed. Right now, most of these are located in and around Hyderabad, and will eventually become Telangana’s.
The Centre has promised to provide an IIT and an IIM besides a few central universities and research institutes for new AP. At present there are four major universities — Andhra University, Nagarjuna University, Sri Venkateswara University and NTR Health University.
On the power front, Andhra Pradesh has an installed generation capacity of 10,500 MW with another 2,500 MW in the pipeline. Nearly 2,500 MW of installed capacity is in the private sector; of these, gas-based plants are not generating at full capacity due to shortage of fuel supplies from the KG basin.
The biggest promise made by the Centre is to complete the controversial Polavaram project, which has been declared a national scheme.
The multi-purpose project, originally conceived by the British, seeks to stabilise the Godavari and Krishna deltas and provide additional water for irrigation and industries apart from generating 900 MW of power. The multi-crore project faces contentious issues of submergence, deforestation and rehabilitation across Odisha, Chhattisgarh, Madhya Pradesh and now Telangana. Several cases are in courts, including in the Supreme Court. About ₹6,000 crore has been spent and another ₹10,000 crore is required, according to estimates. In Khammam district, 205 villages with a population of 1.40 lakh, mostly tribals, and in West Godavari, 71 villages in two mandals with a population of 36,900, also tribals, will be submerged.
This has emerged a big issue between Telangana and Andhra Pradesh. Water sharing will be another issue that the two States will have to resolve. The sharing of water from the Krishna and the Godavari is a tricky and emotional issue to be addressed by a Central Board.
Andhra Pradesh has a strong presence of agriculture in the East and West Godavari districts, Krishna, Guntur, Vizianagaram and Srikakulum.However, 70 per cent of this agriculture is dependent on monsoon and ensuring water on a steady basis will be a challenge.
Promotion of allied activities and establishment of agri and food processing industries is also vital. Though Hyderabad will serve as the joint capital for 10 years till Andhra Pradesh develops its own seat of power, AP has to contend with the revenue loss from the city, which contributes significantly to the exchequer. This leaves Naidu with the task of mobilising funds to create infrastructure, raise revenue collection and service the accumulated loans.
One challenge that Naidu is rather confident of facing is attracting IT companies and creating an IT and telecom hub in coastal AP. This is expected to spur the job market and boost the economy as well.
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