Telangana, India’s youngest state saw a three-way battle between the ruling Bharat Rashtra Samithi (BRS) led by incumbent Chief Minister K Chandrashekar Rao or KCR as he is popularly referred to, the Congress and the Bharatiya Janata Party (BJP) in its third Assembly election. The All India Majlis-e-Ittehadul Muslimeen (AIMIM) helmed by Asaduddin Owaisi is also expected to have played a significant role in the election. The BRS, which has ruled the state since its formation, entered the contest battling inflation and unemployment, apart from the anti-incumbency factor.
Here’s a snapshot of Telangana’s economy.
Telangana was the country’s fastest-growing state in FY22 in the wake of the Coronavirus pandemic, recording a GSDP growth of 11.97 percent. However, the state’s GSDP softened to 7.76 percent growth in FY23 as the economy normalised. The FY23 growth rate stands lower than those recorded in the years prior to the pandemic, as can be seen from the chart below.
The state has, however, managed to bring down its fiscal deficit in recent years. In FY23, it stood at 3.21 percent of GSDP, lower than the FY22 figure of 4.06 percent. The fiscal deficit recorded in FY23 is also lower than the 5.5 percent target mentioned in the state’s fiscal policy statement.
In the current fiscal, Telangana is expected to record a fiscal deficit of 2.7 percent of GSDP, lower than the stipulated target of 3.5 percent.
However, at 4.4 percent, the state’s unemployment rate stood higher than the national average of 3.2 percent, according to the 2022-23 annual Periodic Labour Force Survey (PLFS) figures.
But on a positive note, only 5.88 percent of the state’s population lives under multidimensional poverty. This is much lower than the national average of 14.96 percent.
Telangana has a significantly higher per capita income than the all-India average. Estimates show that in FY22, the state’s per capita income stood at Rs 1,58,561, higher than the national average of Rs 91,481.
However, inflation remains an issue. In FY21, the state recorded an 8.7 percent overall rate of inflation, compared to the national average of 6.2 percent. In FY22, these figures stood at 6.4 and 5.5 percent, respectively.
Telangana’s economy is led by the services sector. In FY23, the tertiary sector grew by 9.3 percent in the state. Meanwhile, the agricultural and manufacturing sectors only saw 3.4 percent and 2.2 percent growth. respectively.
The state has done relatively well when it comes to investment flows. It ranks seventh in the country in foreign direct investment (FDI) since 2019. Telangana has received nearly $5,576 million as FDI between October 2019 and June 2023.
Telangana has also fared decently in promoting its startup ecosystem. The state has 4,426 startups—the eighth highest in the country—providing employment to 49,766 persons.
Another front that the state has done comparatively well on is digital penetration. With a total subscriber base of 33.10 million, the state has a teledensity of 86.66 percent. This is much higher than the national average of 63.53 percent.
Coming to the implementation of central government schemes, more than 11.39 million Jan Dhan accounts have been opened in Telangana. And out of these, 55 percent are in rural and semi-urban bank branches. This means that as much as 32.55 percent of the state’s population as of Census 2011 has opened a bank account under the Pradhan Mantri Jan Dhan Yojana.
As many as 1.15 million beneficiaries have availed a cooking gas connection in the state through the Pradhan Mantri Ujjwala Yojana. This corresponds to 3.29 percent of the state’s population. For context, around 8.2 percent of the households in the state don’t use clean fuel for cooking, according to NFHS-5.
Kalyana Lakshmi is one of the most popular schemes of the Telangana government. Under this scheme, Rs 1,00,116 is transferred to the bank account of the mother of a bride whose family income doesn't exceed Rs 2 lakh per annum, for the purpose of meeting wedding expenses.
However, there has been criticism that the scheme has led to instances of harassment for dowry. In fact, according to media reports, the case of a 27-year-old who died by suicide after taking the lives of her 18-month-old twins earlier this year is connected to the harassment she had to face from her husband and in-laws who were demanding the money her parents received under the scheme.
Rythu Bandhu is one of the flagship schemes of the Telangana government, under which Rs 5,000 per acre of land is deposited into the bank account of farmers in order to provide them support during the monsoon when crops are sown. An estimated 5.8 million farmers in the state avail the benefits of this scheme.
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