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Regional Disparities in Andhra Pradesh, India XML Template (2012) [3.11.2012–2:12pm] [1–13] {SAGE}LEC/LEC 463791.3d (LEC) [PREPRINTER stage] In perspective Local Economy 0(0) 1–13 Regional disparities in ! The Author(s) 2012 Reprints and permissions: Andhra Pradesh, India sagepub.co.uk/journalsPermissions.nav DOI: 10.1177/0269094212463791 lec.sagepub.com A Amarender Reddy International Crops Research Institute for the Semi-Arid Tropics (ICRISAT), India MCS Bantilan International Crops Research Institute for the Semi-Arid Tropics (ICRISAT), India Abstract India is a federal union of 28 states. The states are further subdivided into districts. Andhra Pradesh is one of the largest states in India. This article examines how regional disparities in Andhra Pradesh have developed since its formation in 1956. A large urban centre (Hyderabad) which acts as a hub for economic activities, has attracted factors of production, and has stimulated income and employment opportunities in the surrounding local economy, but its impact on the peripheral districts is limited. There is a need for policy intervention in these peripheral districts in order to reduce regional disparities. Keywords Andhra Pradesh, India, regional development, regional disparities, regions Introduction This article examines regional disparities in Andhra Pradesh and highlights the role Regional inequalities are a development played by its largest urban conglomeration challenge in most developing countries, (Hyderabad). It tries to answer the follow- especially those with large geographic ing questions: areas under their jurisdiction. Following India’s market liberalization in the early (1) Have the regions and districts shown 1990s, skilled labour and capital in convergence or divergence over the Andhra Pradesh have been drawn from last five decades? the peripheral regions to the core regions, mostly attracted by the high-technology ser- vice sector. Meanwhile, unskilled workers, Corresponding author: women, and the elderly remained in the A Amarender Reddy, ICRISAT, Patancheru 502324, low productivity and less capital intensive Andhra Pradesh, India. agricultural sector. Email: [email protected] XML Template (2012) [3.11.2012–2:12pm] [1–13] {SAGE}LEC/LEC 463791.3d (LEC) [PREPRINTER stage] 2 Local Economy 0(0) (2) What is the pattern of change among In Figure 1, districts are grouped into different sub-sectors of industry, agri- poor, medium rich and rich, based on aver- culture, and services sectors? age monthly per capita expenditure, with (3) What policy options would be effective 1.25 USD/capita/day as poor, 1.26 to 2.00 in addressing regional disparities? USD/capita/day as medium-rich and above 2.00 USD/capita/day as rich. In 2004–2005, District level data on different develop- more than 10% of the rural population in ment indicators are collected for the 23 dis- Telangana lived in poverty in five out of 10 tricts of Andhra Pradesh state comprising districts. In Rayalaseema three out of four three regions1 from the Andhra Pradesh districts fell into this category, but in coastal Statistical Abstracts 1956–1958 and 2005– Andhra only two out of nine districts fell 2007. All the prices are converted into into this category. Telangana region has 1999–2000 constant prices by using the a larger share of scheduled castes and wholesale price index series to calculate tribes (the most backward sections of soci- the changes in per capita income over the ety as recognized in the constitution of period. The analysis has been done by com- India), whose socio-economic conditions paring averages for triennium ending (TE) are far inferior to the upper caste popula- 1958 and 2007 for various development tion. Arguably, Telangana’s development indicators. Most of the comparisons are was held back by the long overhang of feu- made on per capita terms and ratios which dalism (the Nizam of Hyderabad), which are unit free and comparable over the meant that both coastal Andhra and period and districts. Inter-district inequal- Rayalaseema regions were more socially ities are quantified by a Gini concentration advanced in comparison, at the time of ratio (GCR). independence. However, even though human development indicators (see below) are at a higher level in both the Coastal Overview of Andhra Pradesh Andhra and Rayalaseema regions, the and its regions former, the granary of south India, is prosperous due to its highly productive Specific national, regional, and local condi- agricultural sector, while the latter is a tions with specific cultural, historical, insti- drought-prone region with low land prod- tutional, and political legacies all shape the uctivity, low population density, and low particular experiences of sub-national terri- consumer demand (Reddy, 2010). tories and their economic and social devel- Hyderabad is a cosmopolitan urban opment (Pike and Tomaney, 2004). Andhra centre, formed about 500 years ago, and Pradesh state is one of the largest states located in the Telangana region. It consti- in India with a population of 84.6 m in tutes 9.15% of the state population; the 23 districts. The state was formed in second largest city is Vishakhapatnam 1956 by the merging of three regions, (only 2.04%), followed by Vijayawada namely, Telangana, Coastal Andhra, and (1.76%), both of which are located in Rayalaseema. Telangana region occupies Coastal Andhra. In addition to these three the largest geographical area of the state cities, about 45 urban centres exist, but with (42%), followed by Coastal Andhra (34%) little agglomeration effects. Hence, and Rayalaseema (25%). Population dens- Hyderabad attracts capital and labour not ity is highest in Coastal Andhra (367/km2), only from within the state, but also from followed by Telangana (288/km2) and other states and countries, especially on Rayalaseema (213/km2). account of its concentration in IT industry XML Template (2012) [3.11.2012–2:12pm] [1–13] {SAGE}LEC/LEC 463791.3d (LEC) [PREPRINTER stage] Reddy and Bantilan 3 Figure 1. Map of Andhra Pradesh India depicting district level poverty based on average monthly per capita expenditure (USD/capita/day). and both public and private service sectors. Product (GSDP) from about 56% in 1970 Hyderabad city also has better public ser- to about 27% in 2009. However, the share vices like primary health centres, roads, and of population dependent on the agricultural educated and highly skilled labour. Hence sector is stagnant at about 60%, contrary to the gulf between Hyderabad and the the experience of developed countries. poorer peripheral districts has widened. In triennium ending (TE) 2008, the service sector contributed to about 45% of GSDP Sectoral composition of income in Andhra Pradesh, while its share is 82% in and employment Hyderabad (Figure 3). Agriculture contrib- uted to about 24% of GDP in Telangana, The development of the state’s economy is 29% in Coastal Andhra and 27% in indicated by the decrease in share of the Rayalaseema. The growth rate of GSDP agricultural sector in Gross State Domestic was 5.3% per annum between 1970 and XML Template (2012) [3.11.2012–2:12pm] [1–13] {SAGE}LEC/LEC 463791.3d (LEC) [PREPRINTER stage] 4 Local Economy 0(0) 45000 1993-94 40000 35000 2000-01 30000 2007-08 25000 20000 Rupees 15000 10000 5000 0 Hyderabad Coastal Telangana Rayalaseema AP Andhra exc Hyd Figure 2. Per capita DDP at 1999–2000 constant prices. 2010, mainly driven by the service sector in (Figure 2). Rayalaseema region is far Hyderabad. behind both the coastal Andhra and Faster growth in the non-agricultural Telangana regions. Per capita income is sector compared with the agricultural less in Rayalaseema where there is no sector for an extended period and the con- ‘home market effect’ due to less population centration of the service sector in core cities density, lower productivity agriculture and has resulted in increased regional disparities less purchasing power, and no large urban in income between core (urban centres) and centre to support economic activity. periphery (rural). Urbanization is higher in Per capita income both from the agricul- Telangana (31% of the population lives in ture and non-agriculture sectors is highest urban areas in Telangana including in coastal Andhra, which indicates that Hyderabad), followed by Coastal Andhra agricultural income has complemented (25%) and Rayalaseema (23%) (Table 1). non-agricultural income in coastal Andhra Districts surrounding the large urban through backward and forward integration centre of Hyderabad in Telangana region and accumulation of consumption power are experiencing exponential growth in per among the population (Figure 3). Only capita income from the non-agricultural Coastal Andhra has benefited from prod- sector due to a fast-growing urban popula- uctivity enhancing technology in the ‘green tion, in part stimulated by a ‘home market revolution’ period (paddy) and the commer- effect’ (Reddy, 2011). However, the high cialization (such as fruits and vegetables, growth of Hyderabad (the core region) is milk, and meat products) of agriculture not sufficient to increase per capita incomes due to its initial better resource endowment of the remote peripheral districts, namely and subsequent public and private invest- Adilabad, Nizamabad and Karimnagar ment in the agricultural sector. within Telangana. Per capita income in Coastal Andhra is higher than Telangana Human development indicators (excluding Hyderabad), but the Telangana region has shown faster growth since 1999 Regional trends in population density, rural due to the spread effects of Hyderabad literacy, and
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