The following article was written for Niti Central. Pasting it here for reference:
In what is perhaps the biggest swearing-in ceremony ever, Chandrababu Naidu took oath last night as the first Chief Minister of the new State of Andhra Pradesh in the presence of lakhs of people and the who’s who of NDA. Six Chief Ministers and nearly the entire Union Cabinet was present on this occasion along with LK Advani. There was criticism that such extravagance could have been avoided because of the precarious financial condition of the State. Naidu brushed it aside saying this is a celebration of people’s victory and aspiration. However, this is going to be the story of Andhra Pradesh for the immediate time to come – grappling with the massive financial deficit.
Chandrababu Naidu promised waiver on all kinds of farmer loans. Not stopping there, he announced waiver of loans incurred by the women self help groups (DWCRA). He promised people that these will be first two files that he will sign, once he takes oath as the Chief Minister. At that time, the burden on the States exchequer was estimated to be Rs 70,000 crore (Around the year 2012). This promise was made before the process of bifurcation was started.
There was no going back on the promise after the State was bifurcated too. Estimates put the loan waiver amount to burden the new State of AP to the tune of Rs 55,000 crores! A whopping amount, considering the revenue deficit of the State to be Rs 15,000 crores! The fiscal imprudence doesn’t end there – every section of the society was promised with freebies left and right – with revenue such a revenue deficit, it remains to be seen how Chandrababu Naidu will cope up with the fiscal burden of building a new State and living up to his promises. Under normal circumstances, it is nearly an impossible task to arrive at an balance between spending for building the new State and spending for the freebies.
The mindless bifurcation carried out by Sonia Gandhi coupled with the fiscal imprudence of the TDP’s promises is precisely one of the main reasons why the immediate roadmap for the newly formed State of Andhra Pradesh is riddled with question marks. There are many plans on paper; and without doubt there is a huge potential in the people of AP to ensure these plans succeed. However, the immediate term plan will be fiscal prudence and that will go for a toss once the modalities of the loan waiver become evident.
The State needs to build a new capital – all indications from Chandrababu Naidu show that the Vijayawada-Guntur region will be chosen as the new capital. The State needs to build educational institutions like the IITs, IIMs etc. The State needs to build AIIMS type hospitals. The State needs to create employment opportunities for the youth – which means that it has to attract entrepreneurs to setup industries. The State needs to find new avenues to bridge the revenue gap. The leadership needs to show way for the people, so that their emotional attachment with Hyderabad doesn’t become an impediment to progress in this region (an earlier article explains why Hyderabad is such a big bone of contention . All these are no mean tasks – perhaps, the biggest challenge any politician is every facing today.
It is here that people are hoping that the administrative experience and acumen of Chandrababu Naidu will benefit them. This hope primarily arises from because the State has been witness to the transformation that Naidu brought about in the Hyderabad region. At a time, when Bangalore was being unanimously voted as the IT destination of India, Chandrababu Naidu took it upon himself to convince IT giant Microsoft to setup their R&D centre here. His personal interventions meant that Microsoft opened their first overseas centre in Hyderabad. The rest, as they say, is history. A new city – Cyberabad- was created. Sops were announced for companies and procedures were simplified. The result – today Hyderabad contributes to nearly half of Telangana’s revenue! Jobs created are not restricted to IT alone, but to a variety of associated fields too, including the dreaded real estate ones! Today, nearly 20 lakh employees in and around Hyderabad owe their position to the foresight of Naidu then. A new city was literally built out of mere rocks!
And it is with this example that Naidu sounds confident of bringing out AP out of the brink. The TDP has many experienced Ministers too, and above all, there is a friendly Government at the Centre led by a superb leader – Narendra Modi. Speaking at the event yesterday, Venkaiah Naidu also expressed confidence that the combination of Modi and Naidu will ensure that Andhra Pradesh will be back on the developmental track within no time. During his campaign, Narendra Modi laid out specific plans for specific areas in the region. He envisioned Tirupati to be the hub for hardware manufacturing, including electronics; given the long coastline the State has, they envisioned AP to become the ‘cargo hub of Asia; given the abundant growth of cotton, they envisioned a textile hub in the Guntur region; and given the vast tracts of fish farms in the east and west Godavari districts, they envisioned a sericulture hub. Given that the undivided State of AP produced, perhaps the largest number of graduates, both leaders have promised making the residual State of Andhra Pradesh as the hub for education too!
The “been there, done that” attitude of Chandrababu Naidu inspires hope, but one also needs to be cautious if this will turn into overconfidence. Fiscal prudence is the need of the hour – mere slogans won’t help anymore. Naidu, when questioned repeatedly, on how he will achieve all this, replied back saying, “Where there is will, there is way”. Only time will tell how long Andhra Pradesh will take to self sustain itself. For now, congratulations to Chandrababu Naidu for the fightback to come to power again!