I am sure; lot of people will pounce on me by reading the heading alone. But since I am not a politician, there is no reason for me to either mince my words or sound diplomatic. I am assessing the future of Hyderabad from a journalistic and academic point of view and hence the above observation. Here are my arguments. There are 5 reasons why I say what I say, and I will elaborate on each.
Hyderabad’s job growth engines are stalling
Any city’s growth hinges on the number of jobs it can create. More jobs mean more income not just for the people but for the state too. Hyderabad’s job growth engines have now begun to stall. What are the sectors that gave Hyderabad its growth over the last few decades? It is Pharma, IT and software, Construction and real-estate and some others like cinema / TV/ media etc. Look at each of the sectors now. Hiring in IT has tapered off. Automation of IT services is reducing the new hire numbers, not just in Hyderabad but whole of India and the world. Pharma is unlikely to add more jobs in Hyderabad. Water scarcity in Hyderabad and pollution concerns are forcing pharma units to look outside Hyderabad. For cinema / TV / media, the best case scenario is status quo as media’s new expansion has to happen in AP to cover that market. Construction and real estate has already been under a cloud. Some migration from Hyderabad to Amaravati will happen in future starting with the shifting of employees next month. This will result in loss of jobs for Hyderabad city. Start-ups have been generating jobs in cities like Bangalore but Hyderabad’s record so far in start-up activity is nothing much to write about.
Hyderabad accounts for a whopping 30% of the state’s population
It is a case of “too big to fail” or “all eggs in one basket”. Rest of Telangana hardly has any economic activity. It does not have any 2-tier cities too. Warangal with approx. 9 lakh population is the second biggest city in Telangana but has no economic activity to speak of. What happens in this kind of a scenario? It is like a family where the big brother has to earn and feed all others who are simply loitering. What happens when he too fails? A downside vicious spiral begins. Hyderabad has to find water, power, infrastructure and clean air for all its residents who will increasingly contribute lesser and lesser to the state’s exchequer. Recent case of Hyderabad water board cutting water supply to industrial units from 30 million gallons per day to about 15 MGD is an example. (READ the Times report HERE). Industrial units are suffering because of too much population.
The state’s priorities are good on paper but bad in practice
Everyone knows about the twin missions of Bhagiratha and Kakatiya. Both are lofty in intention and none can find fault in principle. But there is an economic issue here which hides from public glare. The cost of these 2 missions is in the range of Rs 1 to 1.5 lakh crores. Telangana despite its chest beating as a revenue-surplus state (it might cease to be one in a year) has to bank on loans to fund these 2 missions. Telangana’s debt has already doubled from about Rs 60,000 crs on June 2, 2014 to about Rs 1.25 lakh crs as of today. These 2 missions will further add to the debt burden and if their cost escalates, push Telangana into a debt trap, a point repeatedly being raised by the opposition and trashed by the ruling party. That apart, most irrigation projects in Telangana, being lift irrigation projects, are power guzzlers. Approx. 6000 MW of power is required to run Kaleswaram project alone. (READ Eenadu report HERE) That is an opportunity loss too as that much power cannot be billed to consumers. I seriously doubt if these projects will ever be completed but even if they do, the economic benefits derived from them will be below par. It is a simple logic. Irrigation from gravity is beneficial. Lift irrigation will be too costly and renders benefits which are too meagre. Can’t Telangana find better ways of putting this kind of whopping money to use? The short point is, in this scenario, Hyderabad will only starve for funds going forward as these twin missions will eat up whatever money the city generates.
Telangana has no serious plans for any tier-2 city development
Tier -2 cities are extremely important. Big cities are like cancerous cells. They grow only to destroy everything around. A counter magnet in the state will take the burden out of the cracking infrastructure in Hyderabad and render it better placed to attract investment. Who will go to a city with no water, power, greenery or roads? OK, some uneducated (or undereducated) youth in search of jobs and many drought stricken farmers may go but these are hardly the kind of people who will add to a city’s attraction. A city has to attract top brains who can contribute to the city, but the problem with these top brains is that they usually look for top comfort for their bodies. Cash starved Hyderabad is unlikely to add to the comfort level of its citizens. With no tier 2 city in the vicinity, Hyderabad will increasingly look like an overburdened railway porter.
There are too many cities in south India vying for investments
South India constitutes less than 20% of both the geographical area and population of India but has 3 of the top 6 Indian cities. The whole of north India comprising of more than 10 states has only one big economically functional city (that is Delhi) and it garners default money from these states. The east has anyway fallen off the economic map. West, the economic engine of India has Mumbai along with Pune, Surat and Ahmedabad. But to their advantage, Maharashtra and Gujarat have been strong states with good potential. Hyderabad was counting on 23 districts as its hinterland. It has now been reduced to being the capital of only 10 districts. Agree or disagree, Amaravati is bound to cut into Hyderabad’s pie in future. Hyderabad will have to run that much harder to stay at the same place.
Telangana is blissfully contented in its assessment that they have Hyderabad. It was an asset in the combined state. It still is, but if not handled well, it can very quickly turn into a liability. Remember, Calcutta was an asset for the whole country. Capital was shifted to Delhi, films and businesses shifted to Mumbai and there you go, its downturn began. Its dysfunctional hinterland, which is rest of Bengal and other eastern states, gradually ate into it. Its name changed too. Today, Kolkata is a far cry from the Calcutta of the 50s, which was then widely considered superior to even Singapore and Hong Kong.
Hyderabad beware!! Don’t become another Kolkata!!