- Andhra Pradesh has been one of the frontrunners among the progressive states of India.
- The bifurcation of the state will have significant implications on resource flow to the two new States – Telangana and new Andhra Pradesh – and on their economic development.
- In the long run, both of the regions are likely to benefit. But, both of them will face considerable uncertainty in the immediate future.
- Hyderabad will be the common capital of new Andhra Pradesh and Telangana for an initial period of 10 years, after which it will be the capital of Telangana.
- The special position of Hyderabad gives rise to considerable complications in working out both revenues and fiscal transfers for both of the new states.
- Being the center of economic activities and a source of government finance, it will critically define the fiscal prospects of the two states.
The Gazette of India No 6 dated 01 March 2014 notified the Andhra Pradesh Reorganisation Act 2014 (Act 6 of 2014), upon receiving the President of India’s assent. The Gazette of India No 560 dated 04 March 2014, notified 02 June 2014, as the Appointed Day, the day on which the State of Andhra Pradesh was bifurcated into the State of Telangana and the residuary State of Andhra Pradesh.
Lack of adequate and serious consultations with the key stakeholders, absence of consensus amongst key political parties, lack of transparency and cloak and dagger mode of drafting the Bill, the insane pace with which the Bill was pushed through the State Legislature and the Parliament, woefully inadequate discussion and debate that characterized the passage of the Bill, albeit with notable exceptions, are well known to the world.
However, what is not well known to the public include a number of contradictions, omissions, commissions and inadequacies embedded across the Andhra Pradesh Reorganisation Act 2014 that have adverse impact on the health and well being of both successor States. The Act, by its conception and content, has created disequilibrium, with negative consequences to the residuary Andhra Pradesh. In a tearing hurry to please and placate certain sections of the State, the government had inflicted a serious blow to the fiscal health, developmental integrity of Telugu community.
For a decade preceding the reorganisation of the State, the Andhra Pradesh citizens were subjected to an endless saga of misgovernance, corruption, lack of development, which were further compounded by endless procession of agitations, strikes, and civil strife, all of which caused a major setback to the growth momentum and poverty alleviation efforts. The overall slowdown in the economy, contraction of job opportunities, high levels of inflation had created a sense of gloom and doom in the minds of Telugu people.
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