Andhra in 2022 !! An economic miracle shaping up like none other !!

andhra-an-emerging-economic-miracleJ.Vishnu Shankar:

Forget for a moment the bitter bifurcation saga. Forget the loss of our dear city of Hyderabad. Forget the failed dream of achieving special status. Forget all the drama about centre’s antics on fulfilling bifurcation promise including the Vizag railway zone. Just take a deep breath and look 5 years ahead.

Cut to 2022. I am saying 2022 as we are already towards the close of 2016 and will step into 2017 very soon. What will Andhra Pradesh look like? Will it still be a state plagued by revenue deficits,  a state without a proper capital and without any prominent educational institutions, a state with no jobs, no companies and inhabited by disgruntled citizens whose potential is sky high but who like the pandavas of Mahabharata have been cheated in a dicey game and have been shunted out ?

Far from it. Andhra Pradesh is now primed to take off on a journey which none would have imagined just a few years back. And this short 5 years journey has all the potential to unfold on a scale grander than anything achieved in the last 500 years or so. No, I am not day dreaming nor is this a poetic hallucination of a die-hard Andhra fan. Plain cold logic and economic thinking suggests that Andhrites can fasten their seat belts for an exhilarating ride unmatched in history and unimagined today.

I will elaborate. Let us look at each of the economic factors that in classic economic theory help a region to prosper and how they are faring in Andhra today.

Urbanisation: Bifurcated AP which constituted 58% of population of united AP had fewer revenues in 2014 than the region which accounted for 42%. Why? The short answer is Hyderabad and the potential of urbanisation. So what will happen by 2022? Three things will happen. 1) Vijayawada – Amaravati- Guntur will assume the form of tri-cities. Population of this region will zoom from the present 20 lacs to about 50 lacs (How? Wait for my next article – Amaravati will add another Vijayawada both to itself and to Vijayawada). 2) Vizag will grow from the present 20 lacs to around 30 lacs and 3) Smaller towns like Tirupati, Kakinada and most importantly Nellore will start looking like cities. This increased urbanisation will unleash economic forces which will lead to higher consumption and hence better revenues for the government.

Infrastructure: A region which has 2 world class ports (Vizag and Krishnapatnam), a coast line of 900 kms, national highways and rail lines across the entire coast and fast growing airports needs only a bit of imagination and tinkering to raise the level of infrastructure to efficient levels. The sad story is these natural advantages have been left unutilised till date and it’s only now that these are being seriously addressed.

Agriculture: Andhra is already known for its agriculture capabilities. By 2022 when Polavaram would have been completed, it would be a unique geography not just in India but anywhere in the world to have 80% of its coastal land properly irrigated. Of course, a big part of Rayalaseema will still be needed to be irrigated. But as Godavari waters drench the coastal land, Krishna will be far more useful to Rayalaseema as is being planned. Add Andhra’s capabilities in marine, aqua, fishing, horticulture, poultry and several allied fields ( AP already has 45% of India’s marine exports) and I have no doubt that Punjab and Haryana will look like dwarfs by 2022.

Industry and Corporate sector: It has always been the one sore note in Andhra’s impeccable CV. But fret not, serious attempts at attracting corporate and industrial investments have been bearing fruit. AP today accounts for the highest bank lending to corporate sector among states and its MOU datasheets have been the best in the country. It would still lag behind established states like Maha, TN, Karnataka and Gujarat by 2022, but would certainly be breathing down their necks by then.

Services: Make no mistake, AP would not make it in IT services of the Infosys, Wipro variety. It is just too late in the day. But as digitalisation takes ground, AP is opening up on several fronts like e-governance and citizen services. These will not grab eye balls like the Software companies of repute but would still create massive jobs that will be spread over several towns and cities. In addition, many other services like retail, real estate, banking, transport, export-import etc will hit very high growth rates on the back of the unfolding story of new capital – increased urbanisation – improved infra – and high agri and industrial growth.

Human resources and man power: Andhra already has the best breed of human resources. Andhra students form the biggest chunk in IITs and IIMs. Andhra NRIs are significant in numbers and contribution. But they did not get enough opportunity so far to contribute to their own state and had to look outwards to earn a decent life. As the tables turn and the state starts creating opportunities for them, their contribution will herald a virtuous cycle of economic avalanche. Add the entrepreneurial instincts that are inborn and are waiting to be unshackled. You have a dream scenario building up in economic mobility.

So what can possibly upset this applecart? Political stability is one. Irrespective of the party which forms the next state government in 2019, it is very important that the dynamism being shown presently in building up the state should be continued. Bitter caste divisions already playing out at some level could the second one. No society which is ridden by caste one-upmanship can expect to grow in any meaningful way. If Andhra politicians could shun petty caste and party politics and work in unison for the next 5-10 years, the state has all it takes to be the next economic miracle.

Hey you guys!! Don’t miss the Andhra bus. Whether you are a corporate investor or an individual looking out for opportunities, this is the best bus arriving in a very long time!!

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