Economic justice and Bifurcation of AP. My thoughts.

                

        As per preamble to constitution of India, we the people of India had resolved (in 1950) to secure to all its citizens justice “political, economic and social”.  Thus economic justice is one of the pillars of the constitution of India and is an inalienable right of all its citizens.

The economic justice as generally understood is reasonably dignified levels of income of all residents, equal access to infrastructure like roads, water, health care, education, food, employment   etc.,. If State could provide facilitating environment where the unemployment levels are near zero, economic justice at least in its rudimentary form would have been achieved.

        Economic justice has been denied to the would be residents of residuary Andhra Pradesh, in the bifurcation of AP.

Further AP Re-organization Act 2014 state that if necessary forest land will be reclassified. Hence, scope for  environmentally unsound decisions was kept open.

        It is an acknowledged fact that would be Telangana State will be a revenue surplus budget state and residuary AP would be deficit state. The above situation is due to the concentrated development of Hyderabad neglecting the rest of Andhrapradesh. This was acknowledged by Justice Srikrishna Commission (Committee for Consultations on situation in Andhra Pradesh report 2010, page 306). Government of India over the period 1956-2014 has located 28 establishments of defence or other strategically important establishments and 40 institutions owned by government of India with national research, development and educational interest exclusively in Hyderabad. Some of which are BHEL, IDPL, ECIL, BDL, INCRISAT, CIEFL, CCMB, Air force Academy, DRDO, Geological survey of India, Survey of India, NGRI, IIT, etc

        In addition to Central strategic, research, defence, public sector units etc numbering 68 as per committee for consultations on the situation in Andhra Pradesh , there are approximately 90 central government departments/ministries ( Income tax, National Highways, Central water commission, central ground water board etc.,) many of which  have regional and field offices pertaining to Andhrapradesh being established only in Hyderabad.  I do not have the list offices that were established in Hyderabad, but it is a well known fact that of all the offices/field units/institutes of central government / central public sector enterprises, more than 90% that were allocated to Andhra Pradesh were established in Hyderabad. This is a disproportionate share. And this resulted the rest of AP being cut off from rest of India culturally, as interaction at people level is minimal.

This discrimination faced by the would be residuary state of Andhra Pradesh   in respect of establishment of central institutions, viz., PSUs, regional/state offices of central government, offices of central autonomous agencies, institutions of international repute like ICRISAT, CIEFL etc and central educational institutions etc., will severely restrict integration at people level with rest of India, and needs to be rectified to ensure equitable distribution. 

How this affects the economy as well as revenues of the state is examined as below.

        Independent India by adopting planned development through its Five Year Plans has been consistently trying to address unemployment and other economic issues. Due to the sustained efforts of all Ministries of Government of India since independence, progress has been achieved. India from being a predominantly agricultural subsistence economy is transformed into a modern economy.  The employment levels were also increased. Further the sectoral composition of Indian economy had underwent changes as follows.

Percentage share of different sectors in GDP at Constant 2004-05  prices:

Sectors	Sector	1950-51	1990-91	2010-11
1	Agriculture and allied activities	56.1	33.3	16.8
2	Industry	14.4	24.1	25.6
3	Services	29.5	42.6	57.6

Source: Economic survey 2010-11

As seen from above, the share of services sector and industry had tremendously increased in the GDP of the country and thereby the employment is also being mainly created in these sectors.

Services sector consist mainly of the following.

Trade, hotels, transport and communication, financing, insurance, real estate and business services, public administration and defense and other services like business/technical consulting, software services etc.,

All the above are concentrated in cities that too mainly in million plus cities and more so in megapolises like Delhi, Chennai, Hyderabad etc,

In the money economy, cities are both sources of employment to the people as well as revenue to the government. Economies of scale and economies of scope help sustain the cities by fostering growth. The availability of large market for selling goods helps in sustaining the growth.

Economy of scale is reduction in cost of production of a product by producing more of the same (ex: machine produced cloth vs handloom). Economies of scale is  reduction in long run average and marginal costs due to production of similar or related goods or services, where the out put or provision of item A reduces the cost of item B. ( Samsung entry into smart phones, electronic goods etc, from parts manufacturer into product manufacturer).  To this we may add availability of skilled manpower that can be poached.  It is a well known fact that most of the skilled manpower from public sector units like M/s IDPL, CCMB etc helped growth of Pharma industry in Hyderabad.

An important aspect to be noted here is that the above central government institutions not only contributed rich cultural interaction but also had contributed to the economy of Hyderabad by spending in salaries, infrastructure etc., in public administration and defense which is today approximately 14% of GDP. A significant amount. It is also to be noted that this spending is recession proof and not subjected to economic cycles and recessions. Secondly, they contribute secondary employment due to demand for food, cloths, services etc, and is a revenue generator to the State Government (VAT on sales).

Thus a population of almost 5 crore, which had in 1956 chosen to make its capital away from their region has now lost not only intellectual capital, educational, health, transport (air) and other infrastructure, but also revenue.  Thus they have been hoodwinked by the political class of India as a whole.

It is a fact that once a city crosses a certain critical mass, then infrastructure and growth both re-inforce each other and city becomes a growth engine.

Constitution of India provided for separation powers through various articles and the fields of power and responsibilities are detailed in part XI.

It is suffice here to state that the revenue resources of States is and had always been insufficient to even to barely administer the state leave alone spend well on welfare measures. Thus States have been chronically dependent on CSS schemes and there have instances where the central funds were alleged to have been diverted to pay for other payments of state, possibly salaries also.

The 3 top most taxes of Centre are corporation tax/ income tax, Customs/excise duties and service tax. All of these are almost exclusively collected in cities.  Similarly 3 top most taxes of State are, Sales tax/VAT, State excise (mainly liquor) and stamps/registrations. Here also the sales and hence revenue to the state government is mainly from cities.

In the bifurcation of Andhra Pradesh, in the run up to the stage of division being inevitable, there was a large fight on which state shall get Hyderabad, the industrial and service mega polis of Andhra Pradesh. The reason being two fold, one the opportunities and access to employment, education , health etc and second, the taxable revenue from the services and industrial sectors being exclusively going to one state only.  Thus on one hand there will be revenue surplus state and on the other hand there will be revenue deficit state. However, the development of a industrial and services Meagapolis in the post independent India is  by the combined and sustained efforts of a single state  and population, is now being assigned to only one state. Almost all state level institutions as captured in the ninth and tenth schedules of the AP re-organization act 2014 itself, are located in Hyderabad. These institutes form only a miniscule part of the establishments that were severely concentrated in and around Hyderabad. Thus loss of Hyderabad is not a geographical area, but a 58 years of shared intellectual, economic and infrastructural and cultural capital. As far as Andhrapradesh and Telugu people is concerned, the entire country was integrated almost exclusively only with Hyderabad by virtue of lot of central ( thus national) employees being stationed at Hyderabad.

In this scenario, central government may have to compensate the residuary Andhrapradesh by establishing sufficient strategic and  central establishments as well as regional offices of central government Ministries/departments/scientific institutions which will help in getting due share of 14% spending in salaries, infrastructure etc., in public administration and defense. This will also help in creating intellectual capital as well as integration with the people of rest of India by virtue of their working here and hence more interaction at people level. If necessary, at least 50% of institutions in Hyderabad that can be relocated should be shifted to Andhra Pradesh.

Further in order to achieve equitable distribution, identify cities that are centrally located, 2 in Coastal Andhra and 1 in Rayalaseema.  There are 13 districts in Andhra Pradesh

In this respect, 3 cities chose themselves, i.e. Visakhapatnam located centrally of North Coastal Andhra( 4 districts of Srikakulam, Vizianagaram, Visakhapatnam and East Godavari), Vijayawada-Guntur located centrally in South Costal Andhra ( 4 districts of West Godavari, Krishna and Guntur, Prakasham)  and Kadapa located centrally in Rayalaseema( Kadapa, Kurnool, Chittoor, and Anatapur) , Prakasham and Nellore Districts ( total 6 districts).

The population and Area that would be served by these 3 cities is as follows.

City	Influence Area/Percentage	Population of su-region / Percentage
Visakapatnam	34,444 Sq Km  / 21.44 %	11,682,651 /25.08%
Vijayawada	45486 Sq.Km /28.39%	16,739,659 /35.94%
Kadapa * includes Prakasham	98001 Sq.Km/ 61.17%	21,552,149 /46.27 %

All the three cities have airports, 4-lane National Highways, and well connected Railway network. Thus an equitable development will happen and will serve all the regions of the state without discrimination. Also cities like Kurnool, Anantapur , Nellore and Tirupati are very close to metros like Hyderabad, Bangalore and Chennai and are located remotely from other places and hence will be more of satellite cities. For better appreciation, a map marking the 3 cities and their Influence area/Population is marked as follows

.

To start with the educational and infrastructure measures specified in AP re-organization Act 2014 needs to be equitably distributed. An exercise is made as follows in this regard.

Infrastructure measures in the act select themselves as follows

Infrastructure	Place
Dugarajapatnam port	Dugarajapatnam - Nellore dt -
SAIL Steel plant	YSR dt
IOCL/HPCL Crude oil refinery/petrochemical complex	Kakinada- Rajahmundry
Vizag-Chennai Industrial corridor	9 Coastal districts
Airports	Visakhapatnam,Vijayawada, Tirupathi
Railway Zone	Guntur/Vijayawada
Metro rail	Visakhapatnam and Vijayawada

Capital is also likely to be around Prakasham/Guntur uplands -Vijayawada i.e. in Coastal districts.

All the above are marked in the map of AP to have an appreciation of regional disparity again.

Rayalaseema has been left out in this infrastructure development proposals. Hence at least educational institutions should be allocated to Rayalaseema.

In this regard a possible solution is attempted as follows. Here, the fact that Visakhapatnam, Vijayawada, Guntur, Tirupathi and Anantapur are already educational hubs with more than one university and medical colleges is also kept in view in this exercise.

Educational institution	Place/region	Rationale
Agricultural university	Eluru/ Coastal Andhra	Located in centre of East Godavari, West Godavari and Krishna districts which are the rice bowl of AP and are full of rich fertile land where 3 crops a year are raised. And the variety of crops is also large. Being in centre of almost entire coastal Andhra makes it accessible to all.
National Institute of Disaster Management	Ongole/ Coastal Andhra	Located in pre-dominatly cyclone prone area and aceesible to entire coast and located almost equidistant from all areas of AP makes it an ideal location.
Tribal University	Vizianagaram/Coastal Andhra	Near to the agency areas of Paderu, ramapachodavaram etc of AP as well as near to Chattisgarh and Orissa  tribal belt
Petroleum University	Kakinada/ Coastal Andhra	Very near to the K-G basin and proposed Petroleum complex.
IISER	Kurnool/Rayalaseema	Near to Hyderabad where many scientific establishments are located paving way for exchange of knowledge
IIIT	Anatapur/Rayalaseema	Already host to Jawaharlal Nehru Technological University and close to Bangalore IT hub.
NIT	Nellore/ Coastal Andhra	Absence of government Engineering college in spite of being a major town
IIT	Kadapa/ Rayalaseema.	The unofficial capital of Rayalaseema and Prakasham and Nellore districts and exactly centrally located for all the 6 districts is served by 4-lane roads, Airport, located on the proposed expressway net work of India ( identified in 2009 by MoRTH) and selected for remote  air connectivity by Government of India in 2014, is far away from metros of Hyderabad, Chennai, and Bangalore and hence requires special attention like North east states/region. It is centrally located to 2.1 Crores Population, almost half of total population of 4.65 crores of AP, and 98001 Sq.Km Area which is approximately 62% of total Geographical area of AP. Further, an extent of 6700 Acres of acquired government land is readily available just adjacent to Kadapa Airport, near Railway Station  and Expressway ensuring excellent connectivity as well as availability of land. The land is an uncultivable waste and will spare conversion of invaluable agricultural land elsewhere and hence will be environmentally sound decision. In addition, the proximity of proposed SAIL steel plant  for which almost 15000 acres of land is acquired and available, uranium mines , uranium fuel processing centre, world’s largest barites mines etc, makes the siting of IIT and IIM as excellent choice for creating conducive climate for industrial and intellectual climate and  development as well as employment opportunities to this drought prone area of Rayalaseema. It is expected that economies of scale and scope can be achieved in this poor area.
IIM
Central University		While Coastal Andhra has Old universities like Andhra University, Nagarjuna University etc, it has a total of 9* regular universities, 3 Private universities besides having specialized Universities like  Horticultural University in West Godavari, Health University in Vijayawada, JNTU in Kakinada etc. And educationally it is well developed. Thus the university should ideally be located in Rayalaseema, which is devoid of institutions of higher learning outside Tirupati and Anantapur, each of which has more than 2 universities, while Kurnool is very near to Hyderabad and remotely located in AP. Thus Kadapa would be an ideal choice.
AIIMS		Here coastal Andhra is served by Dr.NTR Health University in Vijayawada and KGH in Visakapatnam, and medical colleges in Guntur, Nellore, Ongole, Kakinada, Rajhamundry etc. In addition many private Hospitals like NRI Hospital in Guntur, Manipal Hospital and Ramesh Hospital in Vijayawda, Narayana Hospital in Nellore, Apollo Hospital, Care Hospital and Seven Hills Hospital in Visakhapatnam, SAI Hospital and Bollineni Hospital in Rajahmundry.   In Rayalaseema, Tirupathi and Kurnool have old Medical colleges serving people. Hence, Kadapa being centrally located would be an ideal choice. Also the transport facilities in Airport, 4-lane NHs, on proposed Expressway  Network, well connected Railway lines makes it accessible to rest of South India also easier.

As far as KADAPA is concerned, it is known that an extent 6700 Acres Uncultivable waste land just adjacent to Airport is already with Government and can be readily allocated for these institutions. In fact a Sprawling CGO complex can be built immediately.

No such land is available in any other district as a single chink that too adjacent to Airport and almost most of the districts in Coastal Andhra are very fertile agricultural land and any alienation of these lands will drastically reduce the cropped land in AP impinging on food security.

Environmentally also, allocating fertile and rich lands to residential/industrial/office use is not advisable and will be a national waste.  A sound and rational decision keeping in view the needs and necessity of facilities required for the Residuary Andhra Pradesh may help in quelling new demand for Separate Rayalaseema or separate Andhra in the beginning itself.

Or

We may be in for  round 2 of AP division.