A Position Paper for Socio Economic and Political Transformation of Through Ten Strategic Interventions Prepared by: Dr. Mazher Hussain Overview: 1. Financial Inclusion: Accessing Bank Credits for People of Telangana 2. Creation of an Entrepreneurial Economy for Telangana 3. Reclamation of Traditional Telangana Food Patterns and Reduced Spending on PDS: Food Security Through Jowar, Bajra and Maize 4. Two Dimensional Approach in Health: Strengthening Government Facilities along with Tapering off Arogyashree Scheme 5. Two Dimensional Approach in Education: Strengthening Government Education System and Providing Free Admissions for Poor Students in Private Schools

6. Prevention of Communal Violence and Political Polarisation to Check BJP in Telangana 7. GO- NGO Coordination Committees involving Civil Society Organizations and Religious Groups: 8. Facilitation and Monitoring Mechanism for Total Implementation of Development and Welfare programs for SCs, STs, BCs and Minorities 9. Representation for Muslims in Local Governance Structures 10. Decentralisation of Governance: Strengthening Gram Sabhas and Area Sabhas

Strategic Interventions

1. Financial Inclusion: Accessing Bank Credits for People of Telangana 80% of bank deposits are made by the poor, salaried and middle classes but banks give 80 % of loans to corporate and industries and hardly 20% to the poor and middle classes.

The story in Telangana is even more critical as most deposits collected by banks from Telangana region are not given to people of Telangana but are allotted in the form of loans of thousands of crores to big business from other states like Delhi, Maharashtra, West Bengal, Gujarat etc. and some to the Seemandhra region. There is an immediate need to ensure that Banks operating in and collecting deposits from Telangana region give adequate loans to businesses and industries from Telangana and have a special focus on promoting micro and small enterprises as per the norms of RBI by providing 25% of all loans to them. This will transform the economy of Telangana and ensure total employment.

Socio- economic Impact: 25 Lakh people belonging to the poor, lower middle classes and middle classes in Telangana gain access to banking capital (average of Rs. 2 Lakhs) to start / expand their business, gain greater prosperity and generate additional employment.

Hence the State Government should take immediate steps to ensure that people of Telangana get their legitimate share of advances from banks as this alone can kick start the economy of the region (beyond the confines of ), generate employment and facilitate transformation of people of Telangana into entrepreneurs, industrialists and corporate entities in large numbers. For details please see Note I: Facts about Financial Exclusion in Telangana

2. Creation of an Entrepreneurial Economy for Telangana Just providing skill training to youth cannot ensure employment as service sector and industry is unable to generate enough employment due to computerization and mechanization. NSSO (National Sample Survey Organisation’s Report has shown that has experienced jobless growth during the last two decades. One option is to promote entrepreneurship among youth with potential by providing them appropriate training in management (along with the skill training being imparted) and enabling them access to bank loans to start their own micro and small enterprises.

Socio-economic Impact: Lakhs of skilled youth with entrepreneur ability and who are unable to find employment will be able to start their own ventures, provide employment to others and boost economic development of the state and the country.

With development of entrepreneurship capacities and access to bank credit, all skilled youth with potential will not only be able to employ them self but also generate jobs for others.

For Details Please see Note II: Towards an Entrepreneurial Economy for Telangana

3. Reclamation of Traditional Telangana Food Patterns and Reduced Spending on PDS: Food Security Through Jowar, Bajra and Maize Substitution of Jowar, Bajra and Maize (that were traditional food of people of Telangana) for subsidized rice that is being provided by the state government will have five benefits: a) Less burden of subsidy on the exchequer (while market price for rice is Rs. 30 a kilo, Jowar, bajra and maize are available for Rs. 18 to Rs. 20 a kilo) b) Possibility of providing food grain below one rupee per kilo, c) Bring thousands of hectors of fallow lands of Telangana into cultivation, d) Boost rural economy and e) Prevent migration and pressure on cities. Socio- economic Impact: Reduced subsidy requirements on PDS even while bringing down rates for food grain supplied through PDS system, thousands of hectors of land brought under cultivation, boost to agricultural employment and rural economy.

Please see Note III: Food Security Through Traditional Food Grains

4. Two Dimensional Approach in Health: Strengthening Government Facilities along with Tapering off Arogyashree Scheme It is proposed that a two dimensional approach is adopted in providing health services to the poor. While Arogyashree scheme could be continued for 10 years to ensure good medical facilities, plans and budgetary allocations should be made to bring government hospitals and dispensaries on par with the private sector during this period and gradually withdraw the subsidies for treatment in private hospitals. This will enable improvement in public health facilities and lead to provision of low cost quality treatment for all that can never be achieved through Arogyashree program that could mostly benefit the private sector.

Socio-economic benefits: This will help strengthen public health facilities even while temporarily enabling poor to access quality health care through private facilities. In the long run, this will drastically reduce the burden on the government in providing free universal quality health care.

5. Two Dimensional Approach in Education: Strengthening Government Education System and Availing Free Admissions for Poor Students in Private Schools A similar two pronged approach could also prove to be a game changer in the fields of primary and secondary education. Even with the best intentions and dedicated efforts, it will take at least 10 years to provide enough schools with all the stipulated infrastructure and faculty in government schools to enable them to offer quality education. Hence utilization of the provision in the RTE Act for provision of 25% free seats to poor students in all private schools could enable lakhs of poor students to access quality education and transform their lives till facilities and quality of government schools are upgraded in about 10 years. In Hyderabad alone, it is estimated that over 1.5 lakh students below poverty line will be able to get admission into private schools including Hyderabad Public School, Geetanjali, Gautami, Narayana and other such renowned and expensive schools if the provisions of RTE Act are implemented. This could provide unprecedented political benefits to the government in cities and towns with private schools. As in the case with hospitals, the subsidies for private education can be reduced in about 10 years time once facilities and quality of government schools is improved.

6. Prevention of Communal Violence and Political Polarisation to Check BJP in Telangana Apart from TRS, the other two major political parties in Telangana are the Congress and BJP- TDP combine. In order to gain political ascendency in Telangana, BJP might take its traditional route of polarisation of votes through communal riots. After the unprecedented electoral success in Uttar Pradesh due to riots in Muzaffar Nagar, BJP seems to be experimenting with a similar approach in Maharashtra and in all likelihood may resort to same tactics in Telangana also due to the high potential of communal polarization that could be possible in the area. There are about 100 sensitive areas in Telangana (including 40 in Hyderabad) with a history of communal violence or communal tensions or have the potential for instigation of communal violence even if they presently do not have any history of communal violence or tensions. During the last three years, BJP was able to instigate communal tensions and conflicts not only in traditionally sensitive areas but also in areas like , Kamareddy and Ramgopalpet () where no riots had ever taken place earlier. If BJP’s political growth in Telangana is to be checked, then steps could and should be taken to ensure that no communal incidences are allowed to take place. With proper political will and instructions to the police, experience has shown that communal incidences and polarization can be effectively prevented. Political Benefits: Would decisively check the growth of BJP in Telangana on grounds of communal polarization.

7. GO- NGO Coordination Committees involving Civil Society Organizations and Religious Groups: Both the Central and State Governments have initiated a number of schemes for the poor, destitute and students that have allocations of thousands of crores every year. However, most such welfare schemes do not reach the intended population due to inadequate publicity. Religious groups, especially among Muslims and Christians have extensive networks through Masjids and Churches that are able to reach out to very large sections of the communities through Friday prayers and Sunday sermons respectively. Similarly, there has been an extensive growth of community based organizations, Self Help Groups and NGOs that have developed presence in most villages, towns and urban localities. It is proposed that GO-NGO Coordination Committees be formed from the Mandal, District to the State Levels to involve these organizations in propagation of government schemes and programs. The outreach will be near total at very little extra cost for posters and pamphlets etc. Further, this arrangement could also be used to facilitate participation of the poor, minorities and women consultations from grassroots for policy making and formulation of appropriate schemes and programs.

Socio-economic Impact: Will facilitate participation from grassroots in policy formulations, enable optimal implementation of all the government schemes and programs and transform political economy from the village level.

8. Facilitation and Monitoring Mechanism for Total Implementation of Development and Welfare programs for SCs, STs, BCs and Minorities The state and central governments have been earmarking thousands of crores for scholarships, subsidies, loans, pensions, housing etc. for the development and welfare of SCs, STs, BCs and Minorities. However, most of these funds remain grossly underutilized and lapse every year and the condition of the targeted communities continues to remain backward. It is proposed that appropriate mechanism should be evolved to involve GO- NGO Coordination Committees from the village to the state level and other such arrangements to monitor and ensure effective and optimal implementation of all the welfare and development schemes and programs. Socio- economic Impact: Will ensure proper and accelerated development of the marginalised and minority communities.

9. Representation for Muslims in Local Governance Structures: The announcement of 12% reservations for Muslims in jobs and education is unprecedented and most welcome. However, the participation of Muslims in governance structures from village level committees to municipalities, state assemblies and the national parliament is abysmal. Most times the focus is only on participation in state assemblies and parliament and there is no talk about representation of Muslims in the village level committees. There are 12 to 14 committees in each village like water users committee, school management committee, market yard committee etc. Unless Muslims find places in these village level committees, they will neither be able to access adequate benefits for the community from the programs at the grassroots nor will be able to develop a political profile that could eventually enable to aspire for positions in panchayats, municipalities, assemblies and parliament. Hence, apart from reservations for Muslims in education and jobs it is very essential for Muslims to be given reservations in governance structures from village level up to ensure holistic and substantive empowerment of the community.

10. A Genuine Telangana Liberation: Strengthening Gram Sabhas and Area Sabhas As per Article 243 of the and the 73rd and 74th Amendments, it is the citizens of India who should take decisions relating to all matters of development in their localities as well as decide about the beneficiaries of all welfare schemes of the state and central governments by participating in the Gram Sabha and Area Sabha meetings of their villages, towns and cities. Elected political leaders and government officials can only implement the decisions taken by the citizens in the community level meetings.

However, in actual practice, citizens of this country have no say in decision making except once in five years when they can decide whom to vote. There after it is the political leaders and government officials who take all the decisions regarding all matters of development programs or selection of beneficiaries of welfare schemes and also implement these decisions that they have themselves taken. This is unconstitutional, illegal and undemocratic.

After the formation of Telangana also, if Gram Sabhas and Area Sabhas are not activated and facilitated to function as per the letter and spirit of the Constitution of India, then for the common people, the formation of Telangana would only mean replacement of once set of rulers by another set.

The key to transforming the formation of Telangana from being just another event into a historic process of a genuine liberation of the people of Telangana can be attained only by ensuring true participatory democracy, decentralisation of governance and empowerment of the people through proper and effective functioning of Gram Sabhas and Area Sabhas. Unfortunately, Gram Sabhas and Area Sabhas are not being allowed to function properly anywhere in the country. If any party or government in any state facilitates and ensures proper and effective functioning of Gram Sabhas and Area Sabhas, then it will go down in history as a savior of Indian democracy and creator of history. Given the increasing awareness among people and many PILs and writ petitions pending in different courts for genuine activation of local bodies, it may be another 10 to 15 years before some state will take the lead, facilitate proper functioning of Area Sabhas and Ward Committees and get credit for creating history. Why can’t Telangana be that State?

Note I: Facts about Financial Exclusion in Telangana Over sixty percent of deposits in banks come from the poor, middle, salaried classes and another twenty percent are from government departments- which are also public money. Business, industry and corporate contribute only about twenty percent of the deposits in banks and most of this is in the form of current accounts that cannot be strictly treated as deposits. But banks give less than twenty percent of loans to the poor and middle classes and more than eighty percent of loans are given to industrialists, big businesses and corporate even though 40 percent of all loans are to be given to priority sector comprising of agriculture, micro, small and medium enterprises. As per RBI guidelines at least 24% of loans should be given to micro and small enterprises (below 25 lakhs) and another one percent DRI(Differential Rate of Interest) Loans to those below poverty line (with loans up to Rs. 15,000). But in reality, micro and small sectors do not get even 10% (instead of 24%) of the loans given by banks and DRI loans sanctioned are less than 0.02% instead of 1% as required(which means only two persons are given the loan when the target is to give it to 100 poor people) . The argument that poor people do not repay their loans and so banks prefer to give to big businesses and corporate is a myth. Estimates have shown that between 2000 and 2013, Indian banks have together written off one trillion rupees as loss and of this 95% default was from corporate and industry (K.C. Chakraborty, Dy. Governor, RBI, Times of India, 3rd December 2013).

Telangana Context: Total advances given by banks all over the country are over 60 lakh crores as in 2013-14 (Rs. 4,82,886 advances per capita). In terms of per capita share, Telangana with a population of 4 crores should get at least 2 lakh crores. Of this at least 50 thousand crores should be given to DRI, micro and small enterprises but in reality they do not get even 25% of this amount and as a result people of Telangana are being deprived of capital to start businesses from petty trading to corporate ventures. If this amount of Rs. 50,000 crores is disbursed properly as per the stipulations of and RBI, then 25 lakh people (or one in every fourth household) in Telangana will be able to gain access to an average of Rs. 2 Lakhs as capital for business. But most of the deposits collected in Telangana region are given as advances to corporate houses in other states like Maharashtra, Delhi, West Bengal and Gujarat etc. depriving people of Telangana their rightful share in the capital available.

Note II: Towards an Entrepreneurial Economy General thinking with policy makers in to transform the economy from agriculture to service oriented to enable employment to the billion plus population. The assumption is that appropriate training to people for jobs could get them employment in the market. But in actuality we have seen that the last 20 years have seen a jobless growth (National Sample Survey data) where businesses have grown 6 to 7 times but no addition to jobs due to mechanization and computerization. Entrepreneurship Development- The Way Out: One out of every 10 to 15 persons will have some leadership qualities, high motivation levels and will to succeed that are all ingredients for successful entrepreneurship. Unfortunately, our system is geared towards training everyone only in skill development to become employees and not to take up entrepreneurship. Some places where entrepreneurship orientation is being given along with skill training, it is being given to the entire batch and with inappropriate content that is not producing the desired results. Hence the immediate requirement is to identify candidates with potential for entrepreneurship in every batch from courses ranging from 3 months to 4 years like mobile repair, electrician, motor mechanic to medicine and engineering and provide them additional training in accounts, inventory control, production, personal management, marketing etc, as per the requirements of their trades and to enable them to start their own enterprises successfully. The only thing required would be capital for which arrangements should be made with banks for easy and quick processing as part of the Financial Inclusion program.

Note III: Food Security Through Traditional Food Grains When N.T. Rama Rao became the Chief Minister of Andhra Pradesh, he announced the two rupees kilo rice scheme. While this scheme provided some food security to the poor people of the entire state of Andhra Pradesh, it adversely impacted the farmers of many areas of Telangana who were dependent on cultivation of jowar, bajra and maize as no other crop could be grown in their fields due to issues of irrigation and soil conditions.

Though rice was available in the open market at the time for 6 to 8 rupees a kilo, the State Government provided a subsidy of 4 to 6 rupees per kilo that not only enabled the poor to get it at Rs. 2 per kilo but also ensured assured market for the farmers, who were mostly from coastal Andhra region and boosted their economy. On the contrary, farmers of many districts of Telangana who could only grow jowar, bajra and maize that was costing them at least Rs. 3.50 to Rs. 4 per kilo could not find any buyers as rice was available for just Rs. 2 a kilo. As a result, thousands of farmers and farm labour had to stop cultivation of their fields leading to large scale migration for employment in other sectors and rendering thousands of hectors of cultivable land fallow in Telangana region. Further, this also led to the change in the food habits of the people of Telangana who traditionally consumed jowar, bajra and maize to switch to rice.

At present rice is available at about Rs. 30 a kilo in the market while jowar, bajra and maise are available for Rs. 18 to Rs. 20 a kilo. Still the State Government continues to provide subsidized rice at Rs. One a kilo instead of substituting it with jowar, bajra and maize. A switch from subsidized rice to provision of jowar, bajra and maize could have at least five benefits: First, there will be less burden of subsidy on the government and it will save at least Rs. 10 for each kilo of food grain provided. Second, it could enable the government to provide food grain even at 25 or 50 paise without much financial burden and gain additional political benefit. Third, this will help in reclaiming the fallow lands of Telangana to make them productive; fourth, gain an increase in agricultural employment and finally boost rural economy to reduce migration and pressure on cities. Prepared By: Dr. Mazher Hussain, Executive Director COVA [email protected], Mob: 9849178111