AP: An area of darkness

During the recent elections in Uttar Pradesh, Congress General Secretary, Mr Rahul Gandhi, was reported to have told the electorate that he would turn UP into an Andhra Pradesh. He was, perhaps, referring to the all-round development achieved by the State.

The remarks of the scion of the Gandhi family brought out a sharp retort from Mr N. Chandrababu Naidu, the leader of the opposition Telugu Desam Party and Chief Minister of AP for nine years. He said if the TDP had made Mr B. Ramalinga Raju, founder of the erstwhile Satyam Computers share the dais with former US President, Bill Clinton, the Congress, under the late Dr Y. S. Rajasekhara Reddy, put him behind bars. Similarly, if IAS officers were proud ambassadors hard-selling the State as a favourable destination for investment during his regime, the Congress Government was putting them at the CBI's doorstep.

Both Mr Rahul Gandhi and Mr Naidu have a clear point to make. Andhra Pradesh, not long ago was the most happening State. It was among the top five States — the rest being Haryana, Gujarat, Maharashtra and Tamil Nadu — in investments, development projects and overall economic growth. Therefore, promising the electorate of UP a governance modelled on AP, on a growth path, was a political appeal from Rahul.

In the case of Mr Naidu, it is just an expression of frustration regarding the decline of the State and its capital — Hyderabad. A State which he visualised as being on the global map, and for which road shows were taken up to attract the best companies and institutes, with reasonable success. What has resulted in this depressing state of affairs in the largest south Indian State? There are three major factors: Political uncertainty, power shortage and the Telangana issue.

POLITICAL UNCERTAINTY

The sudden death of Dr YSR in a helicopter crash in 2009 led to a dramatic change in the political scenario. The vacuum created by the strong leader hasn't been filled either by his successor Mr K. Rosaiah, an experienced politician or by the present, young incumbent, Mr Kiran Kumar Reddy. The result is that the Government is surviving on a thin majority, with the support of megastar Chiranjeevi, who merged his Praja Rajyam Party with the Congress.

The recent drubbing received by the ruling Congress, led by Kiran Kumar Reddy in the by-elections, clearly weakens him further. The party, along with the TDP, drew a blank in the 7 seats (6 in Telangana) where elections were held. There is dissension between the party and the government, or between the Chief Minister and the Pradesh Congress Committee chief, Mr Botcha Satyanaryana. Groupism, which is the norm in the State Congress (but effectively curbed by YSR), has come to the fore. This has yielded greater scope for the intervention by the high command. It is akin to remote control rule, said Mr Naidu.

In the backdrop of liquor syndicates, mining and sand mafia surfacing, and the warring factions becoming vociferous, the Congress has its task made out to survive till 2014. It's not going to be easy, as the next round of by-elections to the 17 seats vacated by loyalists of Mr Y. S. Jaganmohan Reddy of the YSR Congress could be around the corner. The outcome can surely determine the shape of things to come in Andhra Pradesh.

POWER SHORTAGE

If the political power of the ruling Congress Government is slowly declining, there has been a big shortfall on the electrical powerfront. Being the key engine to drive economic growth, this scarcity has adversely impacted the industry and domestic consumers, and has emerged as the biggest impediment to investments.

To bolster its image, the State Government went gaga on the Rs 5.43 lakh crore-worth MoUs signed during the CII-Partnership Summit in January. But then, the looming power crisis threatens to put a big brake on the realisations. The peak deficit in power is of the order of 2000 to 2500 MW. While the State has a peak demand of 13,000 MW, it is able to meet up to 10,500 MW.

Meanwhile, there has been a big jump in demand for power, driven by the high growth rates in the past decade. The capacity addition hasn't been commensurate through new power projects. For example, in the agriculture sector, the demand has shot up from 12,636 MUs (million units) in 2003-04, to 19,976 MUs in 2011-12. Against an average demand of 296 MU/day during March, the supply was only 254 MU/day.

Deficit in supply of domestic coal and the 41-day strike in support of Telangana by Singareni Collieries last year have put heavy pressure on AP Genco (generation company) and NTPC to go for imported coal. The costs of procurement of imported coal has been put at Rs 1440 crore. This has also forced the present Government to increase power tariff, after 10 years in the State.

Another big worry on the energy area is gas-based power projects. The perennial problem with gas linkages, especially from the promised KG basin, is telling. Due to reduced gas availability, generation from the IPPs (Independent Power Producers) is expected to be only 9140 MUs, against the projected 15,440 MUs. The only way to bridge this gap is through external purchases, which means an additional financial burden of Rs 870 crore, according to the Government.

The electricity generated from hydel sources is expected to be around 6,400 MUs, against 8,100 MUs last year. Renewable sources like solar and wind are still very minimal. The State is also factoring in external power purchase of 12,450 MUs. During 2012-13, the State Government is providing a subsidy of Rs 5533 crore (bulk of Rs 3631 crore for agriculture). In comparison, some neighbouring states like Maharashtra provide Rs 3000crore, TN Rs 4,294 crore, Karnataka Rs 3567 crore and MP Rs 1445 crore.

TELANGANA TANGLE

The Centre's dithering on Telangana has been weighing heavily on the progress of the State. The frequent unrest, strikes, and political exigencies brought in by by-elections and scandals have taken a heavy toll on decision-making and on the bureaucracy. Political stability was the key factor during 1995 to 2009, when Mr Naidu and Dr Reddy ruled the State. Further, both the TDP and Congress under YSR were key political players, on whom the longevity of the respective central Governments, be it the United Front, the BJP-led NDA, or the Congress-led UPA Governments, hinged.

This political strength gave them enough muscle to pull several central schemes, funds, and attract both domestic and foreign investments. They also kept the Telangana issue on the backburner. As for power, the two strongmen, aided by good monsoons, managed supply to farmers, industry, and domestic consumers.

It's another matter that successive Governments have to face the fallout of their politico-managerial tactics. With the mercury already rising, this summer promises to be trying for both the politicians and the people in AP.

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