A Case of Andhra Pradesh - krishi icar

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Drought Impacts and Mitigation Measures: A Case of Andhra Pradesh

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THE ECONOMY OF ANDHRA PRADESH

EDITORS’ NOTE

The Indian Economic Journal (IEJ) is the prestigious Journal of the Indian Economic

Association (IEA)—the premier national level Association of the Indian Economic

Professionals. The Indian Economic Association has a long standing of 99 years in the

literary world. The literary contributions of the professionals, academicians and policy makers

from economics are published in The Indian Economic Journal, which also has 65 years of

existence. Both, IEJ and IEA have made a lasting contribution in fostering teaching and

research of high standards in India and abroad. The contemporary issues debated in IEA’s

conferences and seminars have topical relevance not only to the field of economics but also

to allied disciplines, which is commendable.

This special issue pertains to the theme of Economy of Andhra Pradesh. An overwhelming

response was received from members and the papers have been classified in six sub themes

as Impact of Bifurcation on the Finances of Andhra Pradesh and Post-Bifurcation Challenges;

Issues related to the Structural Change in the Economy of Andhra Pradesh; Performance of

Agriculture and allied Sectors in Andhra Pradesh; Issues related to Industrial Development;

Special Economic Zones and Environmental Issues in Andhra Pradesh; Issues related to the

Development of Services Sector in Andhra Pradesh; and Performance of Social Security

Programmes in Andhra Pradesh. The papers received were carefully scrutinized and categorized

for publication in full or as abstract each theme wise.

We are thankful to IEA for providing this opportunity for members to discuss and

articulate their views on the economy of Andhra Pradesh, especially after its bifurcation from

the state of Telangana. We would also like to express our thanks to IEA for publishing these

papers in a refereed ISSN numbered journal of repute.

Prof. B. Nagaraja

Convener

and

Prof. C. Gangaiah

Co-convener

Special Session on the Economy of Andhra Pradesh

Dept. of Economics

SV University, Tirupati

Theme - I

IMPACT OF BIFURCATION ON THE FINANCES OF ANDHRA PRADESH

AND POST-BIFURCATION CHALLENGES

1. New State Scaling Higher Growth Trajectory and Finance Ladder — Andhra Pradesh :

A Critique

K. MUNIRATHNAM NAIDU, K. SREENIVASULU NAIDU & M. DEVARAJULU . . . . . . . . . . . . . . . . . . . 3

2. Financial Doldrums in A.P. : A Post Bifurcation Challenge

K. SANTHA KUMARI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

3. Implications of Bifurcation on Economy of Andhra Pradesh : A Growth Perspective

S.B. YADAV . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28

4. Recent Trends and Targets of Andhra Pradesh Economy : Challenges and Opportunities

A. VENKATA PRASAD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35

5. Performance of Sect Oral Contribution in India’s Surise State Andhra Pradesh –

A Comparative Study of Pre-Bifurcation and Post-Bifurcation

P. JAYALAKSHMI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36

6. Implications of State Division on Andhra Pradesh State Finances

K. SIVARAM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37

Theme - II

ISSUES RELATED TO STRUCTURAL CHANGES

IN THE ECONOMY OF ANDHRA PRADESH

7. Structure and Development in the Residuary State of Andhra Pradesh : 1960-2015

T. KOTI REDDY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41

8. Household Level Poverty in Two Economies of Andhra Pradesh & Telengana and Comparison

with Uttar Pradesh & All India

ALOK KUMAR PANDEY & A.K. GAUR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52

9. Urban Development in Andhra Pradesh State : A Comparative Picture with Telangana State

MANSOOR RAHAMAN & N.T. NAIK . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65

10. Economic Scenario of Andhra Pradesh : Achieving Double Digit Inclusive Growth

BALLA APPA RAO & D. NAGAYYA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66

11. Prospectus for Urban Growth in Andhra Pradesh

M. KOTESWARA RAO . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81

C O N T E N T S

THEME - III

PERFORMANCE OF AGRICULTURE

AND ALLIED SECTORS IN ANDHRA PRADESH

12. Performance of Agriculture in Andhra Pradesh

GITA G. PANDYA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85

13. Agrarian Distress and Farmers Suicides in Andhra Pradesh : A Socio-Economic Analysis

G. SARITHA & K. MADHU BABU . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90

14. Factors Responsible for Agrarian Crisis in Andhra Pradesh

SK. ASHA BEGUM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98

15. Performance of Agricultural Sector in Andhra Pradesh

P. KOTHANDARAMI REDDY & KOTI REDDY TAMMA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99

16. Performance of Agriculture with Special Reference to Undivided Andhra Pradesh

Y. VENKATA RAO . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 108

17. Organic Farming in Andhra Pradesh

G. SAVARAIAH . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109

18. Navyandhra Marching Towards Blue Revolution

G. SAVARAIAH . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 111

19. Export Potential of Agriculture of Andhra Pradesh – An Analysis

I. NARENDRA KUMAR & K. SUNEETHA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 121

20. Development of Horticulture Sector in A.P. : An Analysis

G. SAVARAIAH & K. PRIYANKA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 127

21. Agricultural Labour and Wage Rates in Andhra Pradesh : An Inter-District Analysis

SIVASANKAR, V & HEMANATHAN, S . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 128

22. Role of Millets in Food Security and Nutritional Status in Andhra Pradesh

B. GUNA SEKHAR & E. LOKANADHA REDDY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 129

23. Agriculture Credit Flow in Andhra Pradesh : Action Plan and Strategies

SUBHENDU DUTTA & C.S. SHYLAJAN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 136

24. Dairy Development in Andhra Pradesh : A Study of the Milk Cooperative Societies in

Nellore District

D. KRISHNAMOORTHY & A. MALLAPPA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 148

25. Cooperative Banks for the Development of Agriculture Sector in Andhra Pradesh

M. USHARANI, K. SWAROOPPA RANI, V. SREEVANI & G. SAVARAIAH . . . . . . . . . . . . . . . . . . . . . . 156

26. Drought Impacts and Mitigation Measures : A Case of Andhra Pradesh

M. SRINIVASA REDDY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 165

The Economy of Andhra Pradesh(iv)

THEME - IV

ISSUES RELATED TO INDUSTRIAL DEVELOPMENT,

SPECIAL ECONOMIC ZONES AND ENVIRONMENTAL ISSUES

IN ANDHRA PRADESH

27. Performance of Granite Industry in Chittoor District of Andhra Pradesh

VASU JALARI & M. DEVARAJULU . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 195

28. Industrial Air Pollution and its Effects on Health — A Case Study of Chittoor District

of Andhra Pradesh

C. GANGAIAH, M. RAMANJANEYULU & M. PRABHU . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 206

29. Special Economic Zones in Andhra Pradesh : An Empirical Study

SADU RAJESH . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 212

30. Industrial Development of Andhra Pradesh

D. NAGAYYA & BALLA APPA RAO . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 219

31. Performance of Small Enterprises During the Reforms ERA — A Case Study in Chittoor

District of Andhra Pradesh

M. CHINNASWAMY NAIDU . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 230

32. The New Green Way to True Harita Andhra Pradesh

B. SRINIVASA RAO . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 240

33. A Study of Foreign Director Investment (FDI) Inflows Across States in India with

Special Reference to the State of Andhra Pradesh (AP)

LAILA MEMDANI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 242

THEME - V

ISSUES RELATED TO THE DEVELOPMENT OF SERVICE SECTOR

IN ANDHRA PRADESH

34. The Economics of Intellectual Property in Developing Andhra Pradesh

DVG KRISHNA, DUVVURI & V N PRADEEP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 245

35. Institutional Finance for the Development of SC/STs in Andhra Pradesh

G. SAVARAIAH, D. UDAYA SANTHI, P. KOTESWARI & V. SREEVANI . . . . . . . . . . . . . . . . . . . . . . . . 252

36. Does Banking Sector Help the Rural Poor? A Study on Micro Credit Through

Commercial Banks in Andhra Pradesh

M. MURALIMOHAN & M. DEVARAJULU . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 261

37. Implementation of Annual Credit Plans for Farm Finance : An Analysis

G. SAVARAIAH, S. SRAVANI & D. UDAYA SANTHI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 270

Contents (v)

38. Analysis of the Links Between Public Expenditure on Education and Educational Sector

Performance in Andhra Pradesh

NASIR KHAN, B.M. VARADARAJA S, VASYANAIK B. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 278

39. Economic Status of Construction Workers : A Case Study in Tirpati Town of Chittor

District

K. RADHIKA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 279

THEME - VI

PERFORMANCE OF SOCIAL SECURITY PROGRAMMES IN

ANDHRA PRADESH

40. Public Private Partnership in School Education : Role of the Akshaya Patra in Mid Day

Meal Scheme in Visakhapatanam City

K. MANJUSREE NAIDU, M. SUDHA & G. RAGHAVAIAH . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 283

41. Mahatma Gandhi National Rural Employment Guarantee Act in Andhra Pradesh

SHAIK AMEER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 292

42. Public Distribution System and Food Security in Andhra Pradesh

G. SAVARAIAH & M. KUMAR RAJU . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 293

43. A Comparative Study of the Performance of MGNREGA in Andhra Pradesh and

Telangana States

PUTTA MADHAVI & G SANDHYA RANI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 301

44. Food Security—Role of PDS in Undivided Andhra Pradesh

G. VENKATESWARLU . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 307

45. Impact of MGNREGS on Utilisation of Labour Force in Andhra Pradesh—

With Special Reference to Anantapur District

DHAKSHAYANI M. DONGRE & DHANJAYA K.B. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 320

The Economy of Andhra Pradesh(vi)

THEME - I

IMPACT OF BIFURCATION ON THEFINANCES OF ANDHRA PRADESH AND

POST-BIFURCATION CHALLENGES

ARTICLE / 1

NEW STATE SCALING HIGHER GROWTHTRAJECTORY AND FINANCE LADDER—

ANDHRA PRADESH : A CRITIQUE

K. Munirathnam Naidu, K. Sreenivasulu Naidu & M. Devarajulu

The newly formed State of Andhra Pradesh with reduced area and population is the

result of bifurcation of comprehensive and combined State of Andhra Pradesh which continued

its existence for more than 60 years since 1 st November 1956 based on the recommendation

of the States’ Reorganisation Commission, Government of India. The first linguistic State of

Andhra was formed in April 1953, separating from former Madras State and the present Tamil

Nadu. Andhra State and Hyderabad State were united, as both are Telugu speaking States, on

1st November 1956, and named as Andhra Pradesh. The combined state grew on sound lines

but bifurcated, irrationally, hurriedly, by passing A.P. Reorganisation Act, 2014, following

unsound, whimsical policies without providing for basic capital city, institutions and

infrastructure. The new State of Andhra Pradesh came into being from 2 nd June 2014, with

governing facility for ten years from Hyderabad city. However, the dynamic and visionary

Chief Minister shifted the government to the newly constructed temporary buildings in

Amaravathi on 2nd November 2016 with moving all the departments into Secretariat at

Amaravathi, leaving skeleton staff at Hyderabad to meet the requirements of legal and

Governance activities.

Daringly meeting all the difficulties, with minimum support from Central Government,

the State Government of Andhra Pradesh made sincere and genuine efforts to overcome the

difficulties, converting the crisis into an opportunity to grow and develop on sound lines.

With this braveness the government laid solid foundation for “Sunrise Andhra Pradesh”. The

reconstruction is planned to promote inclusive growth and balanced development, taking into

confidence of and cooperation with all the stakeholders in the development process, of high

magnitude.

The Chief Minister of Andhra Pradesh rightly observed that “the new State of Andhra

Pradesh is currently placed at a defining moment in history. We are now charting our future

Full-Time Member, IV State Finance Commission, Government of Andhra Pradesh, HYDERBADFull-Time Member, Andhra Pradesh State Planning Board, Government of Andhra Pradesh, VIJAYAWADARegistrar, Sri Venkateswara University, TIRUPATI- Andhra Pradesh

4 The Economy of Andhra Pradesh

course of action to spin the wheels of development”¹. The article makes a critical appraisal

of growth path adopted and action being made by the newly created state. The first section

covers growth achieved, followed by the strategy pattern followed to achieve the targets in

Section-II; comparative growth picture and place reached among States in India is analysed

in Section-III, the present financial position of the State in delineated in Section IV, suggestions

for the development way forward in growth and development is included in Section V.

SECTION – I : GROWTH ACHIEVED

It is natural that State of Andhra Pradesh is primarily driven by Agriculture, compared

to the nation though services sector occupies higher first position in the composition of both

GSDP and NSDP. The composition also indicates the actual structural changes taking place

in the economy, entailing the Government to help formulation of plans for overall economic

development. They also throw light on the standard of living of the people. The composition

of shares of GDP and NSDP is given below:

Table – 1

The Sectoral Contribution in 2015-16 (AE) at Current Basic Prices (in percentage)

Sector Andhra Pradesh GSDP India NSDP

Agriculture 27% 17%

Industry 24% 30%

Services 47% 53%

Source: Socio Economic Survey, 2015-16, Planning Department, Govt. of Andhra Pradesh (GoAP), pp: 21-22

The shares of different sectors between 2005-06 and 2015-16 for Andhra Pradesh are

presented below in Table No. 2.

Table – 2

Sector Shares of Andhra Pradesh between 2005 and 2016 (in percentage)

Sector 2005-06 2010-11 2014-15 AE 2015-16 AE

Agriculture 28.00% 27.40% 27.60% 27.40%

Industry 22.50% 23.40% 20.60% 20.10%

Services 49.50% 49.20% 51.80% 52.50%

Source: Achieving Double Digit Inclusive Growth – A Rolling Plan 2015-16, Planning Dept., Go. AP, 2015 p: 19

It is very clear from the Table, that the shares of agriculture and industry in the State

GSDP have declined from 28% to 27.4% and 22.5% to 20.1% respectively from 2005-06 to

2015-16, but the share of service sector have shown hike by 3% in the same period. The trend

also indicates the future growth pattern of more dependence on service sector, followed by

5

industry and agriculture; however these three sectors have to be integrated by the State

Government with appropriate policy frame work and strategy as they would be the future

growth engines for attaining the vision targets fixed for 2029-30, through 2018-19 and 2022-

23 to achieve double digit inclusive growth in Andhra Pradesh.

GDP ANNUAL GROWTH RATES

Growth rates achieved in Andhra Pradesh and India is given in Table-3 below:

Table – 3

Annual Growth Rates between 2012-13 and 2014-15 in percentage at constant prices

Year Andhra Pradesh India

2012-13 4.05% 5.30%

2013-14 7.16% 6.60%

2014-15 7.21% 7.30%

2015-16 (AE) 10.99% 7.50%

Source: 1. Socio Economic Survey, 2015-16, Planning Department, Govt. of Andhra Pradesh (GoAP), p: 17

2. Achieving Double Digit Inclusive Growth – A Rolling Plan 2015-16, G O AP, 2015 p: 21

3. Economic Survey 2015-16, Govt. of India, PA4

The growth in Andhra Pradesh has moved to higher levels since 2013-14 at 7.16% to

double digit growth of 1099% in 2015-16 compared to India at 6.6% and 7.5% during the

same period. As per new series (base year 2011-12 prices) the pattern of higher growth is

posted for Andhra Pradesh (see Table-4)

Table – 4

GSDP of Andhra Pradesh and GDP of India between 2011-12 and 2015-16 in Percentage

Year Andhra Pradesh All India

Current Prices Constant Prices Current Prices Constant Prices

(2011-12) (2011-12)

2011-12 — — — —

2012-13 8.37% 0.10% 13.90% 5.60%

2013-14 14.00% 8.50% 13.30% 6.60%

2014-15 (FRE) 13.75% 7.98% 10.80% 7.20%

2015-16 (Adv) 13.22% 10.99% 8.60% 7.60%

Source : GOAP: (2016) Socio Economic Survey, 2015-16, Planning Department, p: 21

New State Scaling Higher Growth Trajectory • K.M. NAIDU, K.S. NAIDU & M. DEVARAJULU


The State of Andhra Pradesh is zooming to higher levels of growth both in terms of

constant and current prices compared to All India Growth Rates. This trend also indicates the

potentiality to grow at double digit growth since 2013-14 in current prices (14%) and since

2015-16 in constant prices (10.99%).

SECTION – II : STRATEGY PATTERN FOLLOWED TO ACHIEVE THE GROWTH

TARGET

Andhra Pradesh is at the present defining moment with new state having formed on

irrational and hurried way without giving due rational and legal consideration to the needs

and requirements of people thrown out into open space without appropriate and adequate,

legal financial support. The new government charted its future course to run efficiently the

wheels of development. The course of the ship of the State is on troubled waters with no

assurance of sound financial help until recently from the Centre. Though the Centre announced

special package and released funds slowly, the Chief Minister strongly demanded on 30 th

October 2016 at Vijayawada at the foundation laying stone for core capital buildings at

Amaravathi, new capital of Andhra Pradesh. The Finance Minister Sri ArunJaitley assured the

State Government that special package will be given legal protection by approving the grant

of special package at the Central Cabinet Meeting of the Government of India.

Andhra Pradesh at the defining moment has named it to become the Sunrise State, is

moving with a new strategy to attain a big structural transformation, both in economic and

social terms having well-being of people at the central stage. From modest start in 2015-16,

the State broadly aims to achieve the status of high performing State amongst the three in the

Country by 2022-23; the government wants to make it the best State by 2029-30. For this

purpose, the State adopted a vision to make it the Sunrise State of Andhra Pradesh. To

achieve this goal, the State has to be transformed as leading investment destination in the

world by 2050 with the strategy of “swift growth in double digit, better infrastructure,

participatory planning and better governance through effective service delivery marked with

improved marked happiness index”. These comprehensive steps will be the key milestones

for realizing the vision in 2029

The Government aims to achieve the target of one of the top three states in India by

2022, in socio-economic development and ease of doing business; aspires to reach the status

of developed state in India by 2029 - the broad vision being to lay a strong foundation of the

Sunrise State of Andhra Pradesh. To achieve this vision the state has to move fast faced with

continuous double digit growth; the state must ensure delivery with the assured programme

based and Project investments, focusing on sustainable and inclusive development ² and growth

with a broad aim to spread or share the growth to all areas (regions), sectors and people

particularly marginalized sections to eliminate poverty, hunger, through provision of houses

for all downtrodden and neglected persons with required facilities like water, electricity,

transport, education, health, skills etc. for happy living. It means that the State should ensure

7

full employment to all job-seekers by integrated growth of agriculture, industry and service

sectors, in particular development of IT facilities in rural areas for its all-round growth like

urban areas. Following PURA (Providing Urban Facilities in Rural Areas) Policy and

implementing the same through high vision by government, is highly desirable and deserving

to help poor people, areas, sections etc. in the Andhra Pradesh.

STRATEGIC FRAMEWORK

No Doubt Andhra Pradesh unveiled a significant development through economic

efficiency, but the growth is not sufficient enough to overcome difficulties thrown on the

State by irrational and hurried division without adequate thought and reason for such important

issue of State division without sufficient legal protection on social, economic matters and

establishment of New Capital and institutions needed for its continuous growth with justice.

Moreover, the state fulfilled Minimum Development Goal (MDGS), they are not equivalent

with states like Kerala and Tamil Nadu in South and Maharashtra, Madhya Pradesh, Gujarat,

Haryana in the North India. MDGS Completed its period, in its place new reformative and

global Sustainable Development Goals (SDGS) have been adopted. These new goals proposes

to end poverty and deprivation in all forms, covering all people; further it wants development

economically, socially and environmentally useful and helpful continuously. Thus SDGS,

made Andhra Pradesh to take its goals seriously and transform the difficulties into opportunities

and challenges to achieve sustainable higher growth to meet its sudden bifurcation deprivations,

inadequate support from the Central Government.

With the above background the State has envisaged long term growth agenda of

participatory approach of all stake holders. Its strong strategic foundation for accelerated

growth momentum includes seven omissions, five grids, five campaigns, Janmabhumi

Programme and Smart Village Programme. This strategic approach is detailed below:

The Economic Development Board under the Chairmanship of Chief Minister will

oversee the operation of the missions, grids and campaigns for achieving accelerated economic

growth to see that Andhra Pradesh reaches amongst three high performing states in India by

2022-23, best State in India by 2029-30 and leading investment destination in the world by

2050-51. The State adopted for this purpose Rolling Plan model with “a systematic planning

that enables regular assessment and appraisal of overall policy targets with all inbuilt flexibility

ofupdation and revision of targets based on ground conditions”. The State also identified

growth engines of three (3) types to achieve double digit growth in 2015-16 at 2011-12

prices³ GVA growth rate of 10.5% compared³ - Economic Survey 2015-16, GoAPop.cit p.15

to 7.3% for India. Sectoral growth rates in Andhra Pradesh: Agriculture 8.40%, Industry

11.13%, Services 11.39%, Per Capita Income Rs.107532.

1. Seven Missions: Primary Sector Mission, Industry Sector Mission, Service Sector

Mission, Knowledge and Skill Development Mission, Social Empowerment Mission,

Urban Development Mission, and Infrastructure Mission.



2. The Five Grids: Water Grid, Power Grid, Roads Grid, Gas Grid and Optic Grid.

3. Five Campaigns: School is calling; Victory over Poverty, Health and Sanitation,

Water and Trees, Revival of Agriculture.

THREE TYPE OF GROWTH ENGINES

1. Components of GSDP which contribute more than 80% to their respective sector,

with potential for future growth

2. Subsectors delivery a sustained double digit growth over the last 5years

3. Sectors of GSDP allied with National Thirst Sectors with the promise of a large

future potential

The department in the state identified growth engines by following bottom – up approach,

with a focus on availability of low hanging fruits in 2015-16 for stimulating growth of the

economy. The same approach is likely to be adopted in future with suitable modifications

where necessary based on data availability and the target achieved.

SECTION – III : COMPARATIVE GROWTH PICTURE AMONG STATES

COMPARISON WITH OTHER STATES IN INDIA

In GSDP growth rates and in rankings, Andhra Pradesh has shown improvement compared

to other states in India as well as All India GDP rates with 2004-05 as base. The table below

presents this picture.

Table – 5

GSDP of Major States and All India at 2004-05 - Base Prices in percentage: 2014-15

State GSDP Growth Rates at Rank on GSDP PCI at PCI Rank

Constant Prices Growth Rates Current Prices

2012-13 2013-14 2014-15 2012-13 2013-14 2014-15 2013-14 2014-15

1 2 3 4 5 6 7 8 9

Maharashtra 7.80 7.30 5.70 3 5 12 129235 2

Uttar Pradesh 5.78 4.95 6.00 9 13 10 40373 13

Tamil Nadu 3.39 7.29 7.25 16 6 5 112664 3

Gujarat 6.15 8.76 NA 6 3 NA NA NA

West Bengal 7.53 6.91 7.15 4 10 7 78903 8

Karnataka 6.10 7.20 7.00 7 7 8 101594 5

Rajasthan 6.41 4.79 5.75 5 14 11 72156 9

Andhra Pradesh 4.05 7.16 7.21 14 8 6 90517 7

Madhya Pradesh 8.70 9.48 10.19 2 1 1 59770 10

9

1 2 3 4 5 6 7 8 9

Kerala 5.92 6.27 NA 8 11 NA NA NA

Telangana 4.11 4.76 5.30 13 15 14 103889 4

Haryana 5.50 6.97 7.76 10 9 4 147076 1

Bihar 10.69 9.12 9.45 1 2 3 36143 14

Punjab 4.63 5.73 5.32 12 12 13 99578 6

Odisha 3.76 1.82 8.08 15 16 3 59229 11

Assam 5.15 7.50 6.14 11 4 9 49480 12

All India GDP 4.47 4.74 NA NA NA

2004-05 Base

Source: Achieving Double Digit Growth – A Rolling Plan 2015-16, Govt. of Andhra Pradesh p.21

It is to be inferred from the Table that Andhra Pradesh improved its position extraordinarily

with hikes in Growth Rates from 4.05% in 2012-13 to 7.16% (3.11%) in 2013-14 period and

7.2% (0.5%) in 2014-15 and in rankings rose from 14 to 8 and 6 during the same period.

However, in Per Capita Income (PCI) at 2014-15 current prices, the State occupied 7 th Rank

in 2014-15.

SECTION – IV - FINANCIAL STATUS OF ANDHRA PRADESH

Nearly two and of years of state bifurcation made by Central Government, not providing

financial security and protection legally and failed to provide legal guarantee to special status

(social, financial, institutional, infrastructure etc.) announced by including in A.P. Bifurcation

Act,2014 passed in Parliament Houses, combinations of complex problems, including

construction of New Capital, Assembly High Court with sufficient infrastructural facilities,

etc, have multiplied with heavy financial impact, persist and continue to be a challenge for

the government. However, the government converted problems into challenges and opportunities

to innovatively and strategically face them with efficient policy implementation in the

appropriate, Planned direction and fully committed attitude and action with Rolling Plan

strategy with several missions, grids and campaigns under the able, dynamic and efficient

leadership of Chief Minister Sri. N. Chandra Babu Naidu garu, is finding solutions to overcome

compounded multifaced problems. On 29 th October, 2016, Central Finance Minister Sri Arun

Jaitley, it while laying foundation stone for Core Capital buildings at Amaravathi, new capital

city of Andhra Pradesh, gave assurance that Central Government would extend legal protection

to the special package (instead of special status) announced by the present Central Government

by passing it in the Cabinet meeting of Central Government.

Despite the severe problems forced on the new State, Government made the required

genuine efforts to register appreciable progress in fulfilling the targeted inclusive growth with

outstanding performance in the development of State economy covering all welfare sectors.



In this sincere effort for achieving higher growth rates (double digit rates) and make new

State reach amongst three highly developed (performing) states in India by 2022-23 by

promoting inclusive growth model, the present Government is sincerely and actively committed

to realise its aim within the period fixed.

STATE FINANCES

The bifurcation of Andhra Pradesh (A.P) on 2 nd June 2014 as per the enacted Andhra

Pradesh Reorganization Act (No.6 of 2014 ) was hasty and reckless, irrational and unreasonable

as many relevant issues relating to the State were ignored without visiting them in a legal way

and resolving in favour of new State to be build up from the scratch. This negligence pushed

the residuary state into extreme adverse financial situation. Moreover unscientific methodology

followed while allocating revenue receipts and expenditure at the time of bifurcation, the

residuary state of A.P was pushed into gigantic fiscal problems also besides other basic and

central problems. In the central taxes devolutions, may be the grants and market borrowings

allocated are similar to A.P and Telangana, but A.P lost major portion of her resource base

after division, making it in-competitive and ill-equipped with the revue supplies Telangana

State. This unfavourable situation in revenue side, and higher expenditure side, in terms of

allocation of debt, salaries, pensions and subsidies (based on population ration), pushed AP

into insurmountable financial difficulties as their new state has to bear higher expenditure

towards salaries and pensions forming 73% if its own resources, compared to low 58% in the

combined State. Naturally the un-favourable financial balance provide meagre scope for

development or capital assets creation expenditure in A.P. Thus many combined difficulties

all of a sudden to be faced by the new State pushed into heavy revenue deficit and also fiscal

defect of unprecedented magnitude. This could be well understood compared to the situation

that the combined state has never faced revenue deficit for nearly a decade before bifurcation

and fiscal deficit had never went beyond 3% of GSDP.

Facing the above adverse difficulties and unfavourable conditions, government of Andhra

Pradesh taking them as a challenge and an opportunity to grow, with a committed attitude and

innovative mind and better management technique and inclusive methodology is making all-

out efforts to improve the health of State Financial Position and status. The visionary leadership

from the State Cabinet led by daring and dynamic Chief Minister Sri N. Chandra Babu Naidu

garu with efficient management techniques helped by equally committed and efficient executive

team and officers and staff has been making all-out sustained efforts with a grand vision of

transforming the state into Swarna Andhra Pradesh through the strategy of inclusive, equitable

and sustainable development of double digit growth to attain the goal of placing Andhra

Pradesh amongst the three high performing States in India by 2022-23, best State in India by

2029-30 and leading investment destination in the world by 2050-51.

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REVENUE OF THE STATE IN 2015-16

The state own tax revenue, own non-tax revenue and flow from the Centre for 2014-

15 and 2015-16 are given below in table 6.

Table – 6

State’s own revenue in Rs . Crores (Financial Year)

S. No. Tax / Revenue 2014-15 (02.6.14 to 31.03.16 ) 2015-16 (RE)

1 Sales Tax 21672 32840

2 State Excise 3642 4680

3 Taxes on Motor Vehicles 1423 1977

4 Stamps and Registration 2561 3500

5 Land Revenue 28 632

6 Professional Tax 185 302

7 Electricity duty 118 190

8 NALA 130 175

9 Other Taxes and duties 97 127

Total 29857 44423

Table No. 7

State’s Non Tax Revenue in Rs. Crores

S.No Tax / Revenue 2014-15 (02.6.14 to 31.03.16 ) 2015-16 (RE)

1 Mines and Minerals 811 1359

2 Forests 414 1072

3 Interest Receipts 371 154

4 Education 1087 1136

5 Medical and Health 72 95

6 Others 1200 1525

Total 3955 5341

The State’s own tax revenues, non tax revenues and flows from Central Government to

Andhra Pradesh as found in the Tables (6,7 and 8) improved substantially; own tax revenues

rose by 49% from on Rs.29857 Crores in 2014-15 to Rs.44423 Crores in 2015-16; Non Taxes

revenues by 35% from Rs.3955 Crores to Rs.5341 Crores and flows from Central Government

by 40% from Rs.28569 Crores to Rs.40104 Crores during the same period. In the composition

of revenues, among own taxes sales tax occupied 74% highest share, followed by State excise

11% stamps and registration 8%, taxes on motor vehicles 4%, other taxes and duties 2% and



hand revenue 1% the lowest and least share in 2015-16 and more or less the same importance

is to be seen in 2014-15; in non tax revenues highest share of 25 % is from mines and

minerals Rs.1359 Crores followed by others Rs.1523 Crores, education Rs.1136 Crores

(20%),forest Rs.1072 Crores (21%), interest receipts Rs.154 Crores and medical and health

Rs 95 Crores, the lowest share in 2015-16and the same importance is to be observed in 2014-

15. In the flows from Central Government, highest share is from Tax share devolution

Rs.21894 crores followed by plan Assistance and EAP Rs.9760 Crores, normal plan assistance

Rs.8500 Crores and Non plan grants Rs.1000 Crores the least share, and loans received

amounted to Rs.1260 Crores in 2015-16 and Rs.446 crores in 2014-15. In the Central transfers,

highest is from Finance Commission, followed by planning commission, Non-Plan grants and

non plan loans both in 2014-15 and 2015-16.

Table – 8

Flows from the Centre to Andhra Pradesh (Rs.in Crores)

Sl. No. Item 2014-15 (02.6.14 to 31.03.16 ) 2015-16

I Finance Commission 15557 30116

a Tax Share Devolution 11446 21894

b Grants 4071 8222

II Plan Assistance and EAP 11998 9760

a Normal Plan Assistance 11542 8500

1 Grants 11542 8500

2 Loans

b Externally Aided Projects 456 1260

1 Grants 10

2 Loans 446 1260

III Non-Plan Grants 588 1000

IV Non-Plan Loans 466 -772

a Small Savings (net) 466 -772

b Others

TOTAL 28569 40104

Source: For Table Nos. 6, 7 and 8 – Socio Economic Survey 2015-16, Govt. of AP, P-256

STATE’S TOTAL EXPENDITURE

The new state total expenditure was quite high both in 2014-15 and 2015-16 as shown

in Table.

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Table – 9

Composition of Total expenditure in RsCrores

Item 2014-15 2015-16(RE)

Revenue Expenditure 75246 93521

Capital Outlay 6520 12559

Net Lending(loans and advances) 914 306

Total Expenditure 86906 106425

Source: Socio–Economic Survey 2015-16, GoAP P.257

It is clear, that out of total expenditure, revenue expenditure share is highest both in

2014-15 and 2015-16 Rs.75246 Crores out of Rs.86906 Crores and Rs.93521 Crores in

Rs.106425 Crores. As a new state is building everything from scratch and in particular to

build a developed Andhra Pradesh, the Government spent Rs.6520 Crores on Capital

Expenditure in 2014-125 which got nearly doubled to Rs.12559 Crores in 2015-16, to mainly

construct capital assets like irrigation, roads, infrastructure and revenue expenditure for welfare

schemes like subsidy rice, power subsidy, pavalavaddi, old age pensions, housing programmes

etc. Hence Capital expenditure and revenue expenditure zoomed to very high levels in the

initial two years and may have to be continued in next five to 10 years to build best modern

capital city with all essential institutes for extending good governance to people of the state.

It has also to purchase land nearly 30,000 acres from farmers in the villages by paying three

times present market price as per agreement entered into with farmers by Government in the

area around new Capital city area decided by the Government.

DEBT POSITION IN THE STATE

Facing both heavy revenue and capital expenditure and unable to meet fully from own

revenues and flow from Central government, the government secured loans by different

sources in the two years – 2014-15 and 2015-16 as detailed below.

Table – 10

Composition of total debt in crores

Item 2014-15 (02.06.2014 to 31.03.2015) 2015-16 (RE)

Central loans 16858 14210 (8%)

Market Loans 78440 95453 (56%)

Small saving loans 15178 14405 (9%)

PF 14822 15770 (9%)

Others 31175 30277 (18%)

Total Expenditure 156472 170115

Debt Outstanding as Percentage of GSDP 29.36 28.19

Source: Socio Economic Survey 2015-16, GoAP P.257



The Total debt of the State increased from Rs.156472 Crores in 2014-15 to Rs.170115

Crores in 2015-16, but the percentage composition (share) of debt components like central

loans, small saving loans, PF and other Sources are the same in two years. It is the market

borrowings, highest percentage in the composition, stood at Rs.78440 Crores in 2014-15 and

Rs.95453 Crores in 2015-16. The state Paid Rs.9478 Crores as interest for its debts in 2015-

16 and Rs.7902.82 Crores in 2014-15. The State’s debt outstanding as percentage of GSDP

was 29.36 % in 2014-15 and got reduced to 28.19% in 2015-16 due to higher GSDP growth

in this year.

REVENUE AND FISCAL DEFICITS

The highest impact of sudden, hurried and irrational bifurcation of the State on 2nd

June 2014, is on its public financial system as a whole. Hence Andhra Pradesh faced very

high both in the revenue deficit of Rs.13777 Crores and Fiscal deficits of Rs.20746 Crores

in 2014-15. But with efficient management of its resources the deficits could be bought down

to Rs.4140 Crores and Rs.17005 Crores respectively during 2015-16 as shown in table 11.

Table – 11

The State Deficits and interest payment Rs Crores

Item 2014-15(2.6.14 to 31.3.15) 2015-16(RE)

Interest Payment 7903 9478

Revenue deficit/surplus -13777 -4140

Fiscal deficit 20746 17005

Source: Socio–Economic survey 2015-16, GoAP P.257

GRIM FINANCIAL SITUATION

The State’s finances are moving into the red and financial situation turning grim due

to unmanageable conditions with its own resources and flows from Central Government by

way of Tax share devolution, grants, plan assistance, non plan grants, and higher revenue

deficit and physical deficit, the Andhra Pradesh Government have been forced to go for over

draft in 2015-16, to meet the commitments made in the annual budget. No doubt the financial

department is implementing many austerity measures to overcome the grim financial conditions.

The Finance Minister of the State Sri Y. Ramakrishnudugaru, in the review meeting held on

the State of Finances during the first half of 2016-17, on 7th October 2016 clearly indicated

that the gap between flow of funds and the requirements (needs to be fulfilled) was widening

and reached to Rs.6403 Crores putting the finances to serve stress. He told, the bills to the

extent of Rs.1000 was pending payment and the revenues flowing in from the departments

are falling short of targets and non tax revenues had also fallen. To make aware the severity

of the grimness, he observed that the State had availed a debt of Rs.13673 Crores, nearly 70

15

%, out of the estimated to borrow Rs.20097 Crores during 2016-17. The Government estimated

that the annual deficit would be Rs.4868 Crores but all by September 2016 (seven months)

unusually reached to Rs 6641 Crores, an excess of Rs.1773 Crores (40%). The overnment

departments are therefore, advised to spend judiciously by avoiding unproductive expenditure

during the next five months of year 2016-17. Even facing the severe financial constraints, the

Government is committed to keep its promises and would pay the second instalment of

Rs.3000 Crores for DWCRA groups to help female oriented organisations as advised by the

Chief Minister. The Government, more over already made payments to the farmers also for

this financial year (2015-16).5

The Government announced (by Finance Minister) that it would follow new system

from 2017-18 financial year.

According to Dr Arvind Panagaria, Vice Chairman, NITI Ayog, Andhra Pradeshv is

doing well in granting licences to industries very quickly, attracting investments from foreign

countries and also domestically, and connecting rivers in the State stand at first place in the

Country. Even in best practices in governance, Andhra Pradesh stand at high position in India.

The vision of Chief Minister in arranging Dash Board is wonderful idea in efficient

administrative practices; the idea of protecting withering crops with rain guns is learnt for the

first time by him only in this visit to Andhra Pradesh. All these positive visionary ideas of

Chief Minister of Andhra Pradesh with actual implementations have helped the State to

achieve double digit growth in 2015-16 and may continue in subsequent years to reach (the

goal of) amongst the three High Performing States in India by 2022-23, best State in the

Country by 2029-30 and leading investment destination in the world by 2050-51.

SECTION – V : SUGGESTIONS FOR WAY FORWARD FOR STATE DEVELOPMENT

The hasty and irrational bifurcation of Andhra Pradesh pushed the state into multifaceted

difficulties. The first solution to meet such unprecedented situation is to make the State

achieve sustainable double digit growth upto 2022-23 to occupy a position amongst the three

high performing states in India. This requires to significantly increase the growth rate and

share of agriculture, as Andhra Pradesh is mostly an agriculture oriented State now, besides

improving the industry sector to achieve higher growth rates. Agriculture should grow at 8

% rate and industry at 12 to 13% growth rates every year for which the State has potential

both in resources and entrepreneurial ability.

The strategy selected and implemented to grow into sunrise state is to adopt structural

transformation in social and economic terms focusing mainly on wellbeing of the people. The

long term target is to reach amongst the three high performing states in India by 2022-23, best

State in the country by 2029-30 and leading investment destination in the world by 2050-51.

The framework of implementation of new strategy is to implement through seven missions,

five campaigns and five grids. It requires effective management of resources, and utilisation

of best technology by experts with entrepreneurial ability to secure the time bound targeted



results with the inclusive growth model involving all the stake holders departments, sectors,

regions, administrators’ led by dynamic Chief Minister involving all Ministers.

The Financial status of the State Government is highly precarious and grim. The main

reason being sudden irrational and unscientific bifurcation of the State without legal assurance

to protect the new State in the development on sound lines. The special status promised was

not implemented and in its place special package is announced and amounts are being

released to the government.

This package has to be legally protected through approval by Cabinet of Central

Government as promised by Finance Minister, Central Government in October 2016.

The Central government has to liberally allocate funds for the construction of new

capital with the necessary institutions like Assembly buildings, High Court buildings,

infrastructure facilities like roads, railway lines, irrigation dams, educational and health

institutions of national and international importance.

The state requires exemptions through subsidies, waivers of taxes for the promotion of

industries in the State by attracting enterprises from other states in India, and other countries

in the world as, according to the World Bank and Government of India, Andhra Pradesh stood

first in case of doing business in India with a score of 98.8. The state has necessary resource,

skilled employees, best governance practices, liberal burearocracy, growth promotion policies

and efficient administrators etc. to help the State reach highest position in India by attracting

highest flow of foreign investments to promote industries in the State. It has also been

delivering on the promise of growth in annual GSDP growth with 7.2% in 2014-15 and

10.99% in 2015-16, and quarterly GSDP growth with 9.72% in 1 st Quarter of 2015-16 and

12.26% in 1st Quarter of 2016-177.

Andhra Pradesh is suffering from highest impact on its public financial system on

account of sudden, hurried and irrational bifurcation of the Sate on 2nd June 2014. It is facing

severe heavy strains both from revenue and fiscal deficits both in 2014-15 and 2015-16 and

may continue to suffer from such deficits for a long time. The Central Government, therefore,

must extend helping hand fully, more than hand holding, to overcome such deficits in future.

Then only new State can reach the position of three high performing states in India try 2022-

23, best state in the country by 2029-30 and leading investment destination in the world by

2050-51.

Most of its revenue is being spent for salaries, pensions of employees like subsides, old

age pensions etc and hence nearly 70% is spent on these items, leaving low amounts for

Capital outlay(Rs 6520 Crore in 2014-15 and Rs 12559 Crore in 2015-16). To meet the

deficits, the State is depending heavily on market loans (56%), Central loans(8 %) b, small

saving loans (9%) and other loans (18%). To meet the heavy loan burden of 28.19% in the

total GSDP, it is allotting substantial amount towards interest charges. Here also Central

Government should extend its help to the maximum extent to the new state of Andhra

Pradesh.

17

In the review meeting held for the State Finances during first half of 2016, by the State

Finance Minister on 7th October 2016, it was found that gap between flow of funds and

requirements was widening and reached to Rs.6403 Crore putting the finances to severe

stress. To meet this heavy burden the State had already availed debt of Rs.13673 Crore nearly

70 % out of the amount estimated to borrow Rs.20097 Crore during 2016-17. No doubt the

government is following severe austerity measures by limiting the expenditure only to essential

needs. Here also Central Government should be magnanimous in treating the grim financial

situation of A.P by liberal attitude to reduce the burden of borrowing amounts, by releasing

sufficient required funds from the Special Package granted to Andhra Pradesh.

The Severe austerity measures taken to control unnecessary expenditure by the A.P

Government, to avoid heavy borrowing must be matched by liberal financial help by the

Central Government through special package announced to Andhra Pradesh and timely release

of the amounts from this package to help definitely make the State reach as the best state in

India by 2029-30 and leading investment destination in the world by 2050-51.

CONCLUSION

The sudden hurried, irrational and unreasonable bifurcation of combined Andhra Pradesh

into Andhra Pradesh (a residuary State) and Telangana by passing Andhra Pradesh

Reorganisation Act, 2014, in Parliament and creation of new Andhra Pradesh on 2 nd June

2014 has impacted the State severely on social, economic and financial position of the State.

The Special status expected to be announced by the Central Government has not materialised

into action, further throwing the fiscal position of the State into unprecedented severe, painful

financial situation. Despite such unfavourable conditions, the challenges to be faced were

taken as opportunities to grow and develop a new State as a Sunrise Sate and best State in

India. For transformation of Andhra Pradesh, the government of Andhra Pradesh headed by

daring innovative and dynamic Chief Minister Sri N. Chandra Babu Naidu Garu patterned the

growth based on new strategies to realise grand vision. The Vision is to make the state reach

amongst the three high performing states in India by 2022-23, best State in the Country by

2029-30, leading investment destination in the world by 2050-51. The model followed is

inclusive growth covering all the stakeholders -people, administration, experts, organisations,

association, etc., in full involvement with participating mechanism in all actions and activates.

His strategy framework for achieving double digit inclusive growth of Andhra Pradesh during

2015-29 are seven missions, five campaigns and five grids.

During 2014-15 and 2015-16, Andhra Pradesh achieved higher growth rates reaching

to GVA growth rate of 10.5% in 2015-16 compared to 7.3% in India. The sectoral growth

rates achieved are 8.40% in Agriculture, 11.3% in industry and 11.39% in services sector.

Some Capital assets also have been created like Polavaram Project, IITs, IIMs, National

Health Institute etc. However the severe financial pains are persisting like heavy revenue

deficits and fiscal deficits; debt outstanding as percentage of GOP stood at 28.19% in 2015-



16. To meet the severe financial stress, the state contracted heavy market borrowings, loans

from Centre (8%), small saving loans (9%), PF Loans (9%) other loans (56%) – reaching to

Rs.170115 Crores. Moreover the state to meet the widening gap between flow of funds and

requirements for 2016-17 availed already debt of Rs.13673 nearly 70% out of the estimated

amount to borrow Rs.20097 (2016-17). The State is adopting severe austerity measures to

meet the excessive borrowings. Hence the Central Government with magnanimity, noble and

rational thinking must transform the assurances of special package to State in Cabinet meeting

into reality and provide legal status to allocate liberal funds to the new sunrise of Andhra

Pradesh to attain the best state status by 2029-30 and leading investment destination by 2050-

51. This is possible only when the state adopts progressive policies to integrate agriculture,

industry with service sector, in particular, internet and information Technology with the

support of the required infrastructure facilities and interlink rural areas with urban areas

providing urban facilities in rural areas for reaching the goal of Swarna Andhra Pradesh - the

present visionary idea of the Andhra Pradesh Government.

The World Bank ranked Andhra Pradesh Number One in the ease of business in India

with scope of 99.88 and State is delivering on the promises of growth both in annual GSDP

growth in 2014-15 and 2015-16 and quarterly GSDP growth @9.72% in 1 st quarter of 2015-

16 and @12.26% in 1st quarter of 2016-17, showing its potentiality to move forward with

greater accelerated growth rates to achieve the desired goals to make Andhra Pradesh as the

best State in India, and leading investment destination in the World.

REFERENCES

1. Sri N. Chandrababu Naidu, Chief Minister, Government of Andhra Pradesh; Foreword in “Achieving

Double Digit Inclusive Growth – A Rolling Plan 2015-16”.

2. Achieving Double Digital Inclusive Growth - A Rolling Plan 2015-16, op.cit. PP 10-11

3. Economic Survey 2015-16, GoAP op.cit p.15

4. The Hindu, Friday, 29thOctober 2016 Hyderabad Edition P. 6

5. The Hindu, Saturday, October 8, 2016, Hyderabad edition P.5

6. Andhra Jyothy, Telugu language daily, Wednesday 9th November 2016, Andhra Pradesh, Hyderabad

Edition P.5.

7. The Hindu, Friday, November 11, 2016, City Edition, Hyderabad p.1.

19

ARTICLE / 2

FINANCIAL DOLDRUMS IN A.P. :A POST BIFURCATION CHALLENGE

K. Santhakumari

INTRODUCTION

Andhra Pradesh has been one of the frontrunners among the progressive States of India.

The bifurcation of the State had significant implications of resource flow to the two new

States – Telangana and residual Andhra Pradesh and their economic development. Especially

A.P. is facing considerable complications in working out both revenue and expenditure and

fiscal transfers. The loss of urban growth Centre Hyderabad to Telangana, which is the Centre

of economic activities and a major source of government finance, is critically affecting the

fiscal prospects of the State.

The announcement of a special financial package by the central government for the

development of Andhra Pradesh in lieu of the Special Category Status has put several questions

in its implications on AP economy. An attempt is made in this paper, to highlight the key

aspects that have a bearing on the resource/finance flow and economic development of A.P.

It also analyzes the division of assets and liabilities and debt burden of A.P.

THE FISCAL CHALLENGE

Due to the variance in methodology adopted for allocation of revenue receipts and

expenditure, the residuary State of A.P. is facing tremendous fiscal challenges. The total

receipts of revenue including State’s own revenue, Central taxes devolution, grants and

market borrowings are going to be the same for both Telangana and residuary State of Andhra

Pradesh – with entire Hyderabad revenue going to Telangana. However, on the expenditure

side due to the allocation of debt, salaries, pensions and subsidies based on population ratio,

the residuary State of A.P. will have more i.e., 58 per cent of share, while Telangana will have

only 42 percent. The result is high revenue deficit and fiscal deficit for residuary State of

Andhra Pradesh – unprecedented and like never before.

TRENDS IN REVENUE RECEIPTS

The strength in the finances of any government is revealed through receipts i.e., the

Professor, Department of Economics, S.V.University, Tirupati, A.P.


income generating capacity of the State. The surprising fact is that the new government is

projecting almost the same volume of receipts under this account even after bifurcation.

While the total revenue receipts of the combined State stood at Rs.80,996crore for 2010-11,

the same was projected to be Re.1,09,300 crore for 2016-17 a quantum jump in the revenue

generating capacity of the State. However, in relative terms, the share of own tax revenue has

fallen sharply from the undivided position of 55.73 percent to 47.87 percent.

The Share of Stateexcise also gone down substantially from 10.20 percent to 5.27

percent in spite of the all out effort of the government to increase revenue from Abkari and

liberal licensing to Bar and Restaurants. As ‘the share of taxes from the divisible pool to the

Central Government by virtue of significant rise from 32 to 42 percent and reduction of

member of centrally sponsored schemes, it is highly precarious to depend on the central

assistance by way of grants-in-aid any longer.

TRENDS IN REVENUE EXPENDITURE

An analysis of the trends in the revenue expenditure of the Stateof Andhra Pradesh

would reveal many interesting aspects. First, there was no revenue deficit in the undivided

State of Andhra Pradesh (than expected) or due to cut in the allocated expenditure to various

departments, the erstwhile government appears to have taken adequate care to see the finances

of the State did not land in deficit. It is only after the new government (after bifurcation)

assuming Office in June 2014, could find a large volume of a deficit of Rs.24,315crore,

which is the contentious issue between the central Government and the State Government.

Second, there was huge social expenditure towards social services covering education,

health, family welfare, water supply, sanitation, housing, urban development and nutrition had

been significant at above 40 percent always. The revenue expenditure has fallen down by

Rs.20,000crore over the previous, resulting in huge deficit.

This was followed by expenditure on general services including the maintenance of

State departments, fiscal services and pensions. The most significant of this is the servicing

of the debt and interest payments, which were projected to be highest at Rs.12,853Crore

during 2016-17. The expenditure towards economic services consisting of agriculture and

allied activities, Rural Development, Irrigation and Flood control energy, Industry, Minerals,

Transport, Science & Technology and Environment. The State of A.P. would suffer from

revenue deficit of Rs.1,92,798 crore.

The details of the fiscal situation in Andhra Pradesh are furnished in Table 1. It is

evident from Table-1 that the revenue receipts increased from Rs.840661 crore in 2014-15 to

Rs.90125.0 crore in 2015-16. Shared taxes revenue rose from Rs.16838.8 to Rs.22638.0 and

the tax revenue from Rs.38475.1 to Rs.44423.4 crore in the same period. The Capital receipts

recorded a fall from Rs.26289.0 crore to Rs.22727.5 crore. Loans from the Centre increased

from Rs.978.3 crore to Rs.1260 crore. Thus, total receipts recorded a marginal increase only

from Rs.110355.1 crore in 2014-15 to Rs.112852.5 crore during 2015-16 (BE).

21

Table – 1

Fiscal Situation in Andhra Pradesh-Composition of Total Receipts

2014-15RE As % of Sub- 2015-16 As % of Sub BE Over

(Rs. Cr) Total com- BE Total compo- RE (%)

Receipt position (Rs. Cr) Receipts sition

REVENUE RECEIPTS 84066.1 76.2 100.0 90125.0 79.9 100.0 7.2

1 Shared Taxes 16838.8 15.3 20.0 22638.0 20.1 25.1 34.4

2 Tax Revenue 38475.1 34.9 45.8 44423.4 39.4 49.3 15.5

3 Non Tax Revenue 8921.4 8.1 10.6 5341.3 4.7 5.9 -40.1

4 Grants in Aid 19830.8 18.0 23.6 17722.3 15.7 19.7 -10.6

CAPITAL RECEIPTS 26289.0 23.8 100.0 22727.5 20.1 100.0 -13.5

5 Open Market Loans 18532.9 16.8 70.5 18577.1 16.5 81.7 0.2

6 Floating Debt (Gross) 1000.0 0.9 3.8 1260.0 0.9 4.4 0.0

7 Loans from the centre 978.3 0.9 3.7 1260.0 1.1 5.5 28.8

8 Other Loans 2994.0 2.7 11.4 889.4 0.8 3.9 -70.3

9 Deposits Transactions (Net) 862.2 0.8 3.3 748.4 0.7 3.3 -13.2

10 Loans and Advances 1921.6 1.7 7.3 252.6 0.2 1.1 -86.9

TOTAL RECEIPTS (I+II) 110355.1 100.0 112852.5 100.0 2.3

Source: Volume VI, Budget-in Brief, 2015 of Andhra Pradesh

Table – 2

Composition of Tax and Non-Tax Revenue of A.P.

2014-15RE Relative Sub 2015-16 BE Sub Relative BE over

(Rs. Cr) (Rs. Cr) Compo- (Rs. Cr) Compo- Share (%) RE (%)

sition sition

1 2 3 4 5 6 7

State Own Tax Revenue 38208.92 81.07 100.00 44121.27 89.20 100.00 15.47

Land Revenue 65.78 0.14 0.17 631.56 1.28 1.43 860.11

Of which Sale Proceeds of

Waste Lands & Redemption

of Land Tax 54.99 0.12 0.14 528.00 1.07 1.20 860.11

Stamp Duty &

Registration Fee 2900.0 6.15 7.59 35000.0 7.08 7.93 20.69

Tax on Immovable Property

other than Agricultural

Land 116.53 0.25 0.30 174.80 0.35 0.40 50.00

Financial Doldrums in A.P. : A Post Bifurcation Challenge • K. SANTHAKUMARI


1 2 3 4 5 6 7

State Excise 4229.57 8.97 11.07 4680.00 9.46 10.61 10.65

Tax on Sales Trade 28749.15 61.00 75.24 32840.00 66.39 74.43 14.23

Tax on Vehicles &

Goods and Passengers 1824.57 3.87 4.78 1992.87 4.03 4.52 9.22

Taxes & Duties on Electricity 189.22 0.40 0.50 190.14 0.38 0.43 0.49

Other Taxes & Duties 134.10 0.28 0.35 111.90 0.23 0.25 -16.55

State Own Non-Tax

Revenue 8921.39 18.93 100.00 5341.34 10.80 100.00 -40.13

Interest Receipts 4848.23 10.29 54.34 187.81 0.38 3.52 -96.13

General Services 581.09 1.23 6.51 423.10 0.86 7.92 -27.19

Social Services 230.79 0.49 2.59 1256.38 2.54 23.52 444.38

Of which Education,

Sports, Art And Culture 89.57 0.19 1.00 1135.91 2.30 21.27 1168.18

Economic Services 3261.28 6.92 36.56 3474.05 7.02 65.04 6.52

State Own Revenue 47130.31 100.0 49462.61 100.00 4.95


Table – 3

Composition of Total Expenditure of A.P

2014-15 Sub 2015-16 Sub BE over

RE(Rs. Cr) RE(Rs. Cr)BE(Rs. Cr) Composition RE(%)

I PLAN EXPENDITURE 22748.9 20.30 34412.5 30.44 51.27

a Revenue Account 15164.6 13.53 24201.1 21.41 59.59

b Capital Account 7146.5 6.38 9818.7 8.69 37.39

c Loans And Advanes 437.8 0.39 392.7 0.35 -10.30

II NON-PLAN EXPENDITURE 89318.5 79.70 78636.5 69.56 -11.96

a Revenue Account 83144.0 74.19 73223.7 64.77 -11.93

Of which Interest payments 9676.2 8.63 11198.2 9.91 15.73

b Loans And Advances 414.8 0.37 325.7 0.29 -21.48

III TOTAL EXPENDITURE (I+II)/(A TO D) 112067.5 100.00 113049.0 100.00 0.88

A REVENUE EXPENDITURE 98308.6 87.72 97424.8 86.18 -0.90

B CAPITAL EXPENDITURE 7146.5 6.38 9818.7 8.69 37.39

C LOANS AND ADVANCES 852.5 0.76 718.4 0.64 -15.74

D CAPITAL DISBURSEMENTS 5759.8 5.14 5087.1 4.50 -11.68


23

TABLE – 4

Deficit Situation of Andhra Pradesh

2014-15 RE % 2015-16 BE %

FISCAL DEFICIT 2032009.87 100.00 1758424.40 100.00

REVENUE DEFICIT 1424257.31 70.09 729978.67 41.51

CAPITALEXPENDITURE 714653.57 35.17 981871.15 55.84

NET LENDING -106901.01 -5.26 46574.58 2.65

Source: Volume VI, Budget-in-Brief, 2015 of Andhra Pradesh

The composition of total receipts of Andhra Pradesh is provided in Table-2. The

composition of total expenditure is furnished in Table-3 and the deficit situation of Andhra

Pradesh is shown in table-4.

From Table-2 it is evident that State of Andhra Pradesh is doing better in fiscal matters,

as from 2014-15 to 2015-16 an increase of Rs. 5912.35 crore was recorded in the State own

tax revenue. In this, the share of tax on sales trade stood on top with Rs.28749.15 crore in

2014-15 and Rs. 32840.00 crore in 2015-16. The share of State excise occupies next place.

However, the State own non-tax revenue recorded a fall from Rs.8921.39 crore to Rs.5341.34

crore during the above period. Thus, the State own revenue has recorded a small increase

from Rs. 47130.31 crore to Rs. 49462.61 crore in above Period.

As far as the Expenditure account is concerned, it is evident from Table-3, that plan

expenditure has recorded an increase from Rs. 22748.9 crore in 2014-15 to Rs. 34412.5 crore

in 2015-16. A steep fall was witnessed in the case of non-plan expenditure from Rs.89318.5

crore to Rs.78368.5 croreduring the above said period. Thus, a marginal increase in total

expenditure was recorded during the period.

It is a good indication that the State of Andhra Pradesh is doing better as is evident from

a decreasing fiscal deficit from Rs.2032009.87 in 2014-15 to Rs.1758424.40 crore in 2015-

16 (Table-4). Same is the case with revenue deficit, but, capital expenditure has recorded a

steep rise from Rs.714653.57 crore to Rs. 981871.15 crore during the same period.

HUGE DEBT BURDEN

The public debt in Andhra Pradesh has reached to an alarming level with the total debt

incurred by the Statewas expected to cross Rs.1.7 lakh crore by the end of Financial year

2016-17. The burden has been increasing with every passing month in addition to the

Rs.73,856crore it inherited as its share after bifurcation. The debt run up by the combined

State of Andhra Pradesh is bequeathed to Telangana and Andhra Pradesh on the basis of

population ratio of 58:42. So, of the Rs.1.26 lakh crore raised by the market in united Andhra

Pradesh during the last 10 years, the share of residual Andhra Pradesh stood at Rs.73,856

crore, while Telanganaat Rs.52.144 crore.



During the financial year 2015-16, the State raised Rs.6,000 crore by way of government

bonds. This reflects the tight financial position of the State, which has beenalready reeling

under a huge revenue deficit as a consequence of bifurcation. Added to this Rs.6000 crore

loans raised during the year 2015-16, total burden of the Statehas gone up to Rs.80,000 crore.

MARKET BORROWINGS

Market Borrowings, which stood at Rs.78,440 crore in financial year 2014-15, went up

to Rs.95,453 crore at the end of the current financial year. The State paid Rs.9,478crore as

interest towards its debt and debt outstanding as percentage of the GSDP was 28.19 per cent

during the same year. However, the State could bring down the debt as percentage of GSDP

from 29.36 per cent in 2015-16 because of its greater GSDP growth during the year. Market

borrowings consisted a major chunk of 56 per cent of the total loan outstanding while loans

from other sources accounted to 18 per cent. To Service the debt outstanding Rs.80,000crore,

the service would have to shell over Rs.60,000 crore towards interest alone over a ten year

period.

SERVICE RESOURCE CRUNCH

The State finances are in the red with negative cash balance of Rs.490 crore in 2015.

It was inevitable for the State to go overdraft facility with a higher interest rate of 14 per cent

and more for short term credit. The “Sankranti gift” to the poor to the tune of Rs.325 crore

and release of Rs.1,500 crore pending industrial incentives of last five years, Rs.5000 crore

for debt relief of farmers, apart from pensions and scholarships the expenditure has overshooted

its revenue by about 30 per cent reflecting a dismal situation of the economy.

PROBLEMS OF RESOURCE ALLOCATION

The bifurcation of A.P. into two new States has significant implications on resource

flow, economic development and the levels of publicly provided services for the two new

States. At the centre of this bifurcation is the capital city of Hyderabad, which was declared

as the common capital of the two States for 10 Years. However its revenues were allocated

toTelangana. Being the hub of economic activities and the source of government finance,

Hyderabad has become the deciding factor for fiscal prospects of two new States. Further, the

trade of some goods and services within the united A.P. became cross-State in the new

Andhra Pradesh. Non-Tax revenues following mainly the principle of location, was differentially

affected. The division of mineral resources including coal and oil and gas have affected their

royalties. Only, off-shore resources were given to new A.P.

PRIVILEGES OF SPECIAL CATEGORY STATUS

Under Section 95 of the Reorganization Act, the Central Government should take

appropriate fiscal measures, to the success of States to promote industrialization and economic

25

growth in both States. The Central Government has to support the programs for the development

of back word areas of new A.P. especially the Rayalaseema and north coastal region including

expansion of physical and social infrastructure. The Central Government should provide

special financial support for the creation of essential facilities in the new capital of A.P

including the Raj Bhavan, High Court, Government Secretariat, Legislative assembly, legislative

council and such other essential infrastructure.

The new A.P. is aspired for the award of special category status in plan assistance. This

move helps to compensate for the eventual loss of Hyderabad, as well as facilitates for the

development of a new capital for new State. The planning commission providesStates plan

assistance under ‘normal’ plan assistance and ‘special’ plan assistance. In case of normal plan

assistance, 30% of the budget is earmarked for special category States, and assistance is

provided in the form of 90% of grants and 10% of loans. The special plan assistance includes

externally aided projects. The terms and conditions differ as per project for general category

States. Assistance is granted on the same terms and conditions as the original terms and

conditions. In addition States have to bear the exchange rate risk. For special category States,

it is given 90 percent grant and 10 percent loan. Independent of the original terms and

conditions in addition, the central government provides the assistance, which may be loan or

grant or some combination of both, based on the original terms and conditions. The central

government, thus, also bears the exchange rate risk for special category States. The volume

of assistance under special category assistance for State plans entirely depends on the planning

commission. Other incentives for the promotion of new industries and the substantial expansion

of existing units may also be granted. These include 100% excise duty exemption for 10

years. 15% investment subsidy for plant and machinery and 100% income tax exemption to

all new units for an initial period of 5 years. Most of the new infrastructure and construction

related activities will take place in and around the area identified as the capital city of new

A.P.

However, following the recommendations of the 14 th Finance Commission, the class of

Special Category States ceases to exist. Hence, keeping aside the aspirations of the people

of Andhra Pradesh for Special Category Status, the Central Government announced a Special

Financial Package for five years towards the development of the State. The Centre also

announced that it will 100% finance the Polavaram Irrigation Project. The execution of the

Project also entrusted to the State of Andhra Pradesh. It also announced the financial incentives

and accelerated depreciation. While Several Educational Institutions were established already,

some more Institutions like Petroleum University, Central University and Tribal University

among others will be established soon. The Centre will also fund the cost of important

Government Building in the new Capital Amaravati. There are several other features in the

package which are aimed at the allround development of the State. However, The bifurcation

of A.P. will have significant implications on the transfer of returns from the centre to the two

new State governments. These transfers shall take place under the aegis of three main channels,

The finance commission, The Planning Commission and the Central Ministers.



CONCLUSION

The following conclusions emerge from the preceding analysis of the finances of residuary

State of A.P. with reference to post-bifurcation. The residuary State of A.P. is at significant

disadvantage vis-a-visTelangana State. First the GSDP of the A.P. State is only 55.7 percent

of the combined States’s GSDP, and the per capita income of the residuary A.P. State is much

below than the TelanganaState. More significantly the A.P. State’s own revenues are for be

lower than that of Telangana. A.P. with 58.32 percent of the population earns only 46.6

percent of the total revenues of the combined State.

A.P. has much higher Debt burden compared to Telangana, as compared to population

ratio was the sole criterion for apportionment of Debt between two States. In the residuary

State of A.P. there is a resource crunch for revenue which translate to about 4.84 percent

revenue deficit and 7.18 fiscal deficit. This has positioned A.P. in a fiscally precarious

position.

A.P. desperately requires central assistance magnanimously not withstanding construction

of new capital city i.e., Amaravati, as the trend is leading to fiscal imbalances. It will also

cause irreparable damage to the economy and adversely affect the State of A.P. is in the

borrowing end, predominantly waiting for the central government to bail out by any means

as such by granting special status or by granting special grants, allocation of funds and

special incentives. To compete with the developed cities like Bangalore, Chennai and Hyderabad

of the neighbouring States, the Centre should give financial assistance for a level playing

field. Despite A.P. being in a dismal State as far as the economy is concerned, but the State

has a silver lining as such it possess lengthiest coastal corridor second next to Gujarat. The

people of A.P. are entrepreneurial and intellectual.

The Coastal areas possess fertile lands where crop yield is three times a year, the State

is endowed with abundant natural resources. The State is looking for big financial support

from the central government. The major challenge is to face the fund flow to meet various

schemes announced by government along with regular recurring expenditure. While nominal

maintenance of revenue surplus situation may not finance capital expenditures. On the economic

or social services cap on fiscal deficit and Debt stock, as per the finance commission, restrict

the scope of State borrowings ultimately attaching the resource flow, expenditure outflow

towards the activities of the State. Hence fiscal discipline is need of the hour. Irregularities

need to be minimized for revenue augmentation.

It is therefore can be concluded that the financial problems of Andhra Pradesh should

be solved with a wise and constructive plan of action from State government and financial

assistance or announcement of special category status by the central government. All these

issues would go a long way in changing the economic profile of the residual State of Andhra

Pradesh.

27

REFERENCES

1. GOI, White paper on State Finances.

2. GOI, Budget document 2015-16.

3. Patlola Varun Reddy &SudarshanReddy.T, An analysis of public finance of Andhra Pradesh and

Telangana State pre-Bifurcation and post-Bifurcation, a case study from 1980 to 2016, International

Journal of Scientific Research and Management (IJSRM), Vol. 4, Issue J, 2016.

4. A.P. ruling under huge debt burden, http://w.w.w.the hansindia.com/posts/index/ news-analysis/2016-

04 1st Oct Sat, Hyderabad, India.

5. Revenue deficit, infrastructure challenges for new Andhra Pradesh post bifurcation, http://

economictimes. India times.com/ news/politics-and nation/revenue.

6. Andhra Pradesh bifurcation: A perspective, The Gazette of India, No 06, Notification Dated 1 March

2014.

7. A brazen betrayal of A.P. People, The Hans India, 10 Sept 2016.

8. What centre has offered to Andhra Pradesh, The Hans India 9 Sept, 2016.

9. Andhra Pradesh still awaiting center’s help post bifurcation: GovernerNarasimhan, http://www/andhra/

pradesh-new/andhra-pradesh-still-await.

10. One year after bifurcation, how have Telangana and Andhra fared, http://www.the news minute.com/

article/one-year-after-bifurcation.

11. E. Kumarsharma, TelanganaVs. Andhra: A comparison of their fiscal situation and more, Business

Today.

12. M.L. Melly Maitreyi A.P. finances in doldrums, The Hindu, 21 January, 2015.

13. Imbalances in Finances or Andhra Pradesh, The Hans India, 30 July, 2016.



ARTICLE / 3

IMPLICATIONS OF BIFURCATION ON ECONOMY OFANDHRA PRADESH : A GROWTH PERSPECTIVE

S.B. Yadav

GENERAL PROFILE

The earlier State of Andhra Pradesh (AP) has been bifurcated into two States as Andhra

Pradesh and Telangana. The current State of Andhra Pradesh came into being on June 02,

2014 under Andhra Pradesh Reorganisation Act, 2014. Andhra Pradesh (AP) covers an area

of 160,205 sq. km. The State is divided into 13 administrative districts and has a population

of 4.95 crore and is growing at a decadal growth rate of 9.21 per cent. The State has a literacy

rate of 67.4 per cent, and sex ratio of 997 females per 1,000 males.

ECONOMIC PROFILE

The Andhra Pradesh has been blessed with rich natural resources by the nature. Amongst

all States, Andhra Pradesh tops in various socio-economic indicators. As far as the Gross

State Domestic Product (GSDP) of Andhra Pradesh is concerned, at constant (2004-05) prices

was INR 2.65 lakh crore in 2014-15, which reflects a growth of 7.21 per cent over the

previous corresponding period. The economy of the State is mainly driven by the service

sector which contributes 51.79 per cent to the State Gross Domestic Production - followed

by the agriculture sector, (27.59 per cent) and industries (20.62 per cent).

AP State has well-developed social, economic, physical and industrial infrastructures

and virtual connectivity across all regions. State is good in power and electricity generation,

roads, airports, IT and port infrastructures. As per proposal, Government of India is planning

to set up petroleum, chemicals and petrochemicals Investment region (PCPIR) at

Vishakhapatnam and Kakinada which are expected to boost investment and employment

opportunities in the State. Vizag Chennai Industrial Corridor is also being taken up, which

is expected to boost investment and industrial base.

As on July 2014, the State of AP had 32 Special Economic Zones (SEZs) across

diversified sectors, which include textiles and apparel, electronics, food processing, footwear

and leather products, multi-product, pharma, IT SEZs, etc. Andhra Pradesh had a total installed

power generation capacity of nearly 10,628.22 MW. The State has nine hydro power projects

Faculty in Economics, BSR Government Arts College (Matsya University), Alwar (Rajasthan).

29

under operation and one under pipeline. After the New Industrial Policy, 1991, AP has

become the first State in the country to have enacted the Industrial Single Window Clearance.

The Act made it compulsory for new industries to register with the single-window system to

obtain clearances quickly. It also simplified procedures for getting industrial clearances. It

eliminated a large number of Government-induced entry restrictions, licensing requirements

and controls on corporate behaviour.

INFRASTRUCTURE PROFILE

Infrastructure-wise, AP scores high among all States in India. It is generally said that

AP can be a role model for other Indian States in some areas, especially IT, power generation

and high way transport. In this section, attempt has been made to present an overview of

available physical and social infrastructure in Andhra Pradesh.The Act made it compulsory

for new industries to register with the single-window to obtain clearances quickly. It also

simplified procedures for getting industrial clearances. The State also has separate Acts for

development in sectors such as solar power, electronic hardware and food processing.

ROADS

The State is well connected with inter-State and intra-State road network. The State has

a total road network of 45,831 km. Transport Roads & Buildings department is responsible

for the construction and maintenance of roads, bridges, and National Highways in the State.

MRTS (MASS RAPID TRANSIT SYSTEM)

Andhra Pradesh has proposed Metro Rail projects in the cities of Visakhapatnam,

Vijayawada and Tirupathi. Therefore, Government has prepared a detailed project report(DPR)

in order to avail this transport facility to the general public of these cities.

At present, the Government of India has selected three cities of Andhra Pradesh such

as, Kakinada, Tirupati and Visakhapatnam as part of smart cities scheme of very ambitious

plan of central government. These shall be developed in the days to come under Clean India

Mission. This initiative will boost developmental activities such as housing, transportation,

sanitation, drainage, pollution, investment etc.

RAILWAYS

Among all the transport systems of the country, Railways occupy the most important

position as it carry nearly 80% of the total goods traffic and 70% of the passenger traffic. As

Andhra Pradesh is well connected to Railways network and it has rail accessibility to nine

out of thirteen district headquarters in the new State. The Government of India is also

planning to form a separate railway zone, namely South Coast Railway, with Vizag as its

headquarter. The new zone will consist of Waltair Division of the East Coast Railway (ECoR)

Implications of Bifurcation on Economy of Andhra Pradesh : A Growth Perspective • S.B. YADAV


as well as Vijayawada, Guntur and Guntakal divisions of South Central Railway. Apart from

the above, a feasibility study has also been undertaken on the four freight corridors in India

out of which one in Andhra Pradesh. This East-Coast Corridor(Kharagpur-Vijaywada) will

improve the quality of train services in terms of its speed.

AIRPORTS

Air connectivity in Andhra Pradesh is quite good. It has 7 operational Airports/air strips

at Visakhapatnam, Tirupathi, Rajahmundry, Vijayawada, Kadapa, Tadepalligudem and

Puttaparthy. State Government is extending support to Airport Authority of India for expansion

or modernisation of existing Airports at Vijayawada, Rajahmundry and Tirupathi. There has

been a proposal for development of Greenfield airport at Bhogapuram, Vizianagaram District.

It has been proposed to develop No-frills airports at Nagarjunasagar, Guntur District

and Donakonda, Prakasam district and to develop Regional airports at Kuppam, Chittor

district, Dagadarthi, Nellore district and Orvakallu, Kurnool district.

PORTS

There is one major Port at Visakhapatnam managed by the Government of India, and

14 Non-Major Ports managed by the State Government. The Government is developing the

Machilipatnam port under PPP mode. In addition to the existing Non Major ports, the

Government has also decided to develop 14 Minor Ports under the PPP mode, which include

Bhavanapadu and Kalingapatnam in Srikakulam District, and Narsapur in West Godavari

District. There has been a proposal from the Government of India to establish a Second Major

Port in the State at Duggirajapatanam; for which, the Government of AP has conveyed its

consent and has agreed to provide available government land as equity. Apart from this,

another commercial, private sector port is expected to come up at Kakinada.

EDUCATION AND HEALTH INFRASTRUCTURE

As per the Census 2011, the literacy rate of the State is 67.35 percent in 2011 as against

62.07 percent in 2001. The literacy rate of the State is lower than the all India literacy rate

at 72.98% percent. Literacy in Andhra Pradesh increased over 37 percentage points from

29.94 percent in 1981 to 67.35 percent in 2011. Female literacy rate has gone up from 52.72

percent in 2001 to 59.96 percent in 2011.

INDUSTRIAL DEVELOPMENT

In India, industrial sector has achieved a significant role in its economy. In Andhra

Pradesh, as many as 1,742 large and mega projects with an investment of INR 78,860 crore

have gone into production, creating employment for 4,21,222 persons until November, 2014.

During 2014-15, 15 large and mega industrial projects have been established with an investment

of INR 1,875 crore and employment generation for 6,814 persons. As many as 1,06,504

31

micro, small and medium enterprises were established, providing employment to 11,65,102

persons, and involving an investment of INR 1,69,121 crore up to March, 2014.A substantial

increase in employment has also been achieved. About 1,990 Micro, Small and Medium

Enterprises were established providing employment to 25,175 persons, and involving an

investment of INR 2,263 crore up to September, 2014. Government of India has accorded in-

principle approval for setting up of 2 National Investment and Manufacturing Zones (NIMZ);

one each in Chittoor and Prakasam Districts, over an expanse of 5,000 to 6,000 hectares of

land. The volume of industrial production in physical terms has also been multiplied. Apart

from Visakhapatnam, cities such as Vijayawada, Tirupati, Kakinada and Anantapur have been

proposed to be developed into IT hubs.

TOURISM

Andhra Pradesh is recognised for its legendary dynasties, it has most revered temples,

lacquer toys and beautiful weaves, rich literature and vibrant arts of Kuchipudi dance. The

State is a home to a number of holy pilgrim centres, attractive palaces, museums, ports, rivers,

beaches and hill stations. Andhra Pradesh, with more than 300 tourist locations, attracts the

largest number of tourists in India. More than 7.5 million visitors visit the State every year.

Most of the tourist destinations in the State are concentrated in Visakhapatnam, Simhachalam,

Araku, and the beaches of East coast line. Tirupati is major temple destination attracting a

large chunk of pilgrims. The Tourism Corporation is working towards the development of a

beach corridor from Visakhapatnam to Bhimili, which will include the RK Beach and

Rishikonda.

PROVISION OF NEW INFRASTRUCTURE THROUGH AP REORGANISATION

ACT, 2014

After bifurcation, the Government of India has assured to new Andhra Pradesh to

provide the following infrastructure through Andhra Pradesh Reorganisation Act, 2014.It has

assured to:

• development of new capital city;

• fund for new major port at Duggirajapatnam;

• establish a new integrated steel plant by SAIL;

• to establish a greenfield crude oil refinery and petrochemical complex by IOC or HPCL;

• establishment of the Vizag-Chennai industrial corridor;

• to make the existing Visakhapatnam, Vijayawada and Tirupati airports to international

standards;

• establish of a new railway zone;

• funding for rapid rail and road connectivity from the new capital of the successor

State of Andhra Pradesh to Hyderabad and other important cities of Telangana;



• establishment of Metro Rail facility in Vishakhapatnam, and Vijayawada-Guntur-

Tenali Metropolitan Urban Development Authority, and

• Establishment of several educational institutions like IIT, NIT, IIM, IISER, IIIT,

AIIMS, Central University, Petroleum University, Agricultural University, Tribal

University and National Institute of Disaster Management etc.

POLICY INITIATIVES

Major policy initiatives have been taken by the government of Andhra Pradesh in order

to promote industrial and infrastructure development in the new State. Some of the prominent

policy initiatives have been listed below:

• Andhra Infrastructure Development Enabling Act, 2011

• Andhra Pradesh Single Window Clearance Act, 2014

• AP IT Policy 2014-2020

• AP Innovation & Start-up Policy 2014-2020

• AP Electronics Policy 2014-2020

• Andhra Pradesh Solar Power Policy -2015

• The Biotech policy 2001

• Andhra Pradesh Tourism Policy 2010

• New Industrial Policy, Andhra Pradesh

• Industrial Investment Promotion Policy, 2005-2010, Andhra Pradesh

• Food Processing Policy 2010-2015 of Andhra Pradesh State.

Public-Private Partnership (PPP) has been successful instrument in Andhra Pradesh.The

PPP cell is the nodal agency for processing all the PPP mode projects in the State. It plays

an advisory role to the relevant departments. As on March, 2015, a total of 115 projects worth

INR 41,976 stand at various stages of implementation.

PHYSICAL BIFURCATION : GROWTH IMPLICATIONS

On the basis of the above analysis, now it has become very relevant to discuss the

possible implications of the bifurcation of the erstwhile Andhra Pradesh State. It 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. It has

been decided that 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. However,

things are uncertain after bifurcation. But the special position of Hyderabad gives rise to

considerable complications in working out both revenues and fiscal transfers for both of the

33

new States. Hyderabad is known as hub of IT, electronics goods, software and other business

activities. Being the centre of economic activities and a source of Government finance, it will

critically define the fiscal prospects of the two States. The bifurcation will impact a wide

range of relevant aspects, including the division of assets and liabilities, water resources, land

resources, and the division of pensioners and existing government employees and public

sector enterprises. Here are the following possible implications in this regard:

The bifurcation of the State is also expected to delay execution of National Investment

Manufacturing Zones (NIMZs). Recently, the State government has received in-

principle approval for three (NIMZs) in Chittoor, Medak and Prakasam districts. The

land acquisition for Chittoor and Prakasam NIMZs is underway and it is completed

in Medak. The State government is now preparing to sanction special staff to APIIC

to oversee NIMZ activities, which might get delayed now.

One of the real contentious issue arises that people of AP always felt that it was their

investments and human capital that created all the wealth in and around Hyderabad,

while Telangana people were free riders. They have always been very upset that

many of the coastal cities like Vishakhapatnam, Vijayawada, Tirupati, etc., were

neglected because all the investment was flowing in to Hyderabad for far too long.

Hyderabad by the end of 2005 was like a huge black hole that gobbled up all the

foreign direct investment in the State.

The people of AP were also worried about the sharing of Krishna and Godavari river

waters with Telangana. The leader of Telangana movement tried their best to mislead

people of Telangana that people from AP have stolen all the fruits of development

from the people of Telangana. That sensitizes issues very much. Now people of the

two States are looking their future very uncertain.

There are three major regional dialects of Telugu- each spoken by the people of

Telangana, Coastal Andhra and Rayalaseema. People of Telangana always felt that

their dialect was being considered inferior by the speakers of the other dialects. Also,

the mass media (like Telugu movies and Television) have always used the Coastal

Andhra dialect. He claimed that the Telangana culture and dialect were being

considered inferior by the people of AP and the only way the Telangana people could

get back their self-respect is by demanding a separate State. People of the two States

felt that they would now receive their due which was pending since years.

The Telangana movement was result of people’s anger and so called discrimination

over certain issues. It was very successful because of the involvement of the students.

KCR has promised government jobs to all these people. Now the real question is how

would he create all those government jobs? On the other hand, a great amount of job

creation would happen in AP because they would need brand new infrastructure and

need to build their new capital. This will enhance migration from one State to other

State.


The high castes from AP were the entrepreneurial classes who have been creating a

lot of wealth over the last few decades (including Hyderabad). Think GMR, GVK,

LANCO, Dr. Reddy’s, Satyam, Redbus, media conglomerates, and the whole of

Tollywood, etc. Telangana would lose out on these capitalist classes and their

entrepreneurial spirits. On the contrary, the elites in Telangana have always been

feudal but never entrepreneurial and these are the capitalists the State of Telangana

would be left with. This will impact their economy over the long run. On the other

hand, AP would have a huge amount of these entrepreneurial classes- close to 31%

of the population.

Andhra Pradesh would be a power-surplus State while Telangana would be a power

deficit State.

AP would have an infrastructure surplus, while Telangana would become a landlocked

State by losing out on major ports, coastline, and golden quadrilateral and major

railway freight corridors. It would also lose its share of revenues from the KG gas

basin.

CONCLUSION

It remains to be seen that how both the States would settle their issues relating to

resource distribution, water sharing, infrastructure, power generation, investment proposals,

trade, tourism, cultural migration etc. However, efforts are to be made to resolve all issues

amicably with dignity and respect to each other. The aim of bifurcation should be fulfilled

in order to make the people happy of both States. They must have competition for growth

and development, poverty eradication, employment generation and power generation. The

welfare of the common man should be their ultimate goal.

REFERENCES

1. Ahluwalia, M.S., (1996). New economic policy and agriculture: Some reflections, Indian Journal of

Agricultural Economics, 51 (3).

2. Ali, Mubaraik and Derek Byerlee, (2002). Productivity growth and resource degradation in Pakistan’s

Punjab: A decomposition analysis, Economic Development and Cultural Change, 50 (4): 840-863.

3. Bandyopadhyay D., (2001). Andhra Pradesh: Looking beyond Vision 2020, Economic and Political

Weekly, 36 (11).

4. Bhatia, M.S., (1999). Rural infrastructure and growth in agriculture, Economic and Political Weekly,

34 (13).

5. Desai, B.M., (1994). Contributions of institutional credit, self-finance and technological change to

agricultural growth in India, Indian Journal of Agricultural Economics, 49 (3) : 457-475.

6. Desai, B.M., (2002). Policy framework for reorienting agricultural development, Indian Journal of

Agricultural Economics, 57 (1).

ARTICLE / 4

RECENT TRENDS AND TARGETS OFANDHRA PRADESH ECONOMY :

CHALLENGES AND OPPORTUNITIES

A. Venkata Prasad

ABSTRACT

With the geographical area of 1, 62,760 sq km Andhra Pradesh ranks as the 8th largest

State in the country. Situated in a tropical region, the State has the 2nd longest coastline in

the country with a length of 972 km. The State has a forest area of 34,572 Sq.Kms as per

the forest records, which accounts for 21.58% the total geographical area. Andhra Pradesh

is the tenth largest State in the Country, in terms of population. As per 2011 Census, the State

accounts for 4.10% of the total population of the country. Andhra Pradesh is in the process

of transformation as Sunrise State and growth targets are being set to achieve them in defined

timeframe under Vision 2029. The seven missions, five grids and five campaign modes put

in place are the growth vehicles and the State marching ahead with a mission based approach,

targeting double digit growth on a sustainable basis. Sustaining double digit growth for the

next 14 years is imperative to ensure that Andhra Pradesh will be one among the top three

performing States by 2022, the best in the country by 2029 and the best global destination

by 2050. This paper examines the recent structural changes and targets of Andhra Pradesh

economy after bifurcation and also presents the unique advantages and obstacles to achieve

sustainable double digit growth.

Key words: Double Digit Growth, Inclusive Growth, Happiness Index and GSDP

Lecturer, Dept. of Economics, PRR & VS Govt. Degree College, Vidavalur, SPSR Nellore Dt. AndhraPradesh.

ARTICLE / 5

PERFORMANCE OF SECTORAL CONTRIBUTION ININDIA’S SUNRISE STATE ANDHRA PRADESH –

A COMPARATIVE STUDY OF PRE-BIFURCATIONAND POST-BIFURCATION

P. Jayalakshmi

ABSTRACT

This paper aims at studying the trends in sect oral contribution to Gross State Domestic

Product of Andhra Pradesh, the sunrise State of India. Andhra Pradesh is one of the major

States in India endowed with rich natural resources having large potential for economic

growth and development. Both economic and political factors influenced the sect oral

performance. Pre-bifurcation Andhra Pradesh witnessed and benefited from economic reforms

which the State implemented. Bifurcation of United Andhra Pradesh into Andhra Pradesh and

Telangana is historical and challenging to economic performance of both bifurcated States.

However, Telangana started its life journey with revenue surplus and Andhra Pradesh its new

life journey with revenue deficit. Andhra Pradesh economy faced advantages and disadvantages

in its new journey. The growth in the State of Andhra Pradesh was mainly driven by agriculture,

industry and services sectors. All three sectors are shows increasing trend even in post-

bifurcation. In spite of bifurcation pangs, Andhra Pradesh recorded a growth rate of 13.94

percent in the second quarter, registering an average half yearly growth of 11.77 percent. The

State government is currently working on the comprehensive Double digit growth plan to

achieve a per-capita income over Rs 10 lakh by 2029-30. The growth target for 2015-16 at

constant prices stands at there is a swift upward surge in the Agriculture and Allied sectors

which have registered a phenomenal growth rate at 47 percent at constant prices. The sect

oral contribution of the economy may increase in future with the achieving of targets and

through facing challenges.

Key Words: Gross State Domestic Product, Natural resources, Economic growth, Economic

reforms.

Reader in Economics, St. Joseph’s College for Women (A), Visakhapatnam, Andhra Pradesh, INDIA

ARTICLE / 6

IMPLICATIONS OF STATE DIVISION ONANDHRA PRADESH STATE FINANCES

K. Sivaram

ABSTRACT

This paper is mainly intended to inform the public about the factual position of State

finances so as to generate an informed debate on various aspects of the State’s fiscal health

and also to educate the public on the adverse consequences of inaction and the necessity for

adopting hard and difficult measures to restore the fiscal health. The numerous problems

affecting the State economy have to be analysed scrupulously and the required corrective

actions need to be implemented dispassionately. The Government invites constructive

suggestions and valuable advice from different groups in the society and political parties in

the State. This would help the Government in its endeavour to adopt proper corrective action

in a timely manner so that it can quickly bring fiscal discipline and financial stability.

The Government is committed to rectify the fiscal imbalances that have emerged in the

past few years. The task ahead is very arduous. Government may be left with difficult and

painful options. Government seeks the cooperation and support of the people in its endeavour

to move towards the course of fiscal correction.

Government will necessarily have to play a major role in implementing reforms with

greater thrust in parallel - so as to attract private initiative since it is equally vital for

supplementing government’s efforts. Collectively, it should be possible to shift Andhra Pradesh

to a higher growth trajectory - whereby it not only surpasses the national averages in economic

performance but also achieves the goals enshrined in the Vision 2020.

Lecturer in Economics, Govt. College (M) Autonomous, Anantapuramu, AP.

THEME - II

ISSUES RELATED TO STRUCTURAL CHANGESIN THE ECONOMY OF ANDHRA PRADESH

ARTICLE / 7

STRUCTURE AND DEVELOPMENT IN THERESIDUARY STATE OF ANDHRA PRADESH :

1960-2015

T. Koti Reddy

INTRODUCTION

The Residuary State of Andhra Pradesh has three distinct regions which are at different

stages of socio-economic development, viz. South Coastal Andhra, North Coastal Andhra and

Rayalaseema. The state has a total of 13 districts, the Anantapur District is the largest and

Srikakulam District is the smallest district. The districts are divided into three regions of the

state, i.e., North Coastal Andhra, South Coastal Andhra and Rayalaseema. North Coastal

Andhra comprises 3 districts (Srikakulam,Vizianagaram and Visakhapatnam), South Coastal

Andhra 6 districts (East Godavari, West Godavari, Krishna, Guntur, Prakasam and Sri Potti

Sri Ramulu Nellore) and Rayalaseema region comprises the remaining four districts (YSR,

Kurnool, Chittoor, and Anantapur).

South Coastal Andhra region is located in between the river Godavari in the north and

river Krishna in the south, there are natural factors that have offered extensive possibilities

of expanding irrigation through canal system, mostly due to the advantage of delta and the

natural gradient which can be exploited very well by canal irrigation. North Coastal Andhra

has high-potential rivers like the Vamsadhara and the Nagavali. On the other hand, Rayalaseema

region is not able to access river water due to lack of gradient. But the natural advantage of

‘tank’ irrigation was even less in Rayalaseema. Thus Rayalaseema is the most disadvantaged

in terms of access to irrigation of any type in the state of AP (Sri Krishna Committee 2010).

The per centage of people below the poverty line in Andhra State in 2011-12 has been

estimated as 14.7 per cent in rural areas and 20.6 per cent in urban areas and 16.3 per cent

for the state as a whole (Rangarajan Committee).

GROWTH PERFORMANCE OF THE STATE : A REVIEW

The Gross State Domestic Product at factor cost of Andhra state was Rs.8778 crore in

1960-61.Since then it rose to Rs.35697 crore in 1993-94.In 2012-13 the Gross State Domestic

Professor in Economics, IBS, Hyderabad.


Product at current prices was estimated at Rs.410961 crore as against Rs. 379230 crore for

2011-12 indicating a growth of 8.37 per cent. Since 2012-13 the growth performance of

Andhra Pradesh has been on a higher scale. In 2015-16 (Advanced estimates), the GSDP of

Andhra Pradesh at current prices stood at Rs.603376 crore. It recorded 13.22 per cent of

growth compared to previous fiscal which was Rs.532922 crore in 2014-15. The GSDP of

Andhra Pradesh at constant prices (2011-12) also increased from Rs.379230 crore in 2011-

12 to Rs.493641 crore in 2015-16 (Advanced estimates). It recorded 10.99 per cent of growth

compared to previous fiscal which was Rs.493641 crore in 2014-15.

The Advanced estimates of 2015-16 indicate that the Per Capita Income (NSDP) of

Andhra Pradesh at current prices increased to Rs.1,07,532 from Rs. 95,689 in 2014-15

registering a growth of 12.38 per cent. The Per Capita income (NSDP) at constant prices

(2011-12) has also gone up from Rs.79,441 in 2014-15 to Rs.87,487 in 2015-16 registering

a growth rate of 10.13 per cent (Socio Economic Survey 2015-16, AP). Though overall

development is quite good in terms of almost all indicators, but extreme disparities exist

among the three regions and districts. The average value of the composite index is 0.648 for

Andhra. Lower rank reflects higher socio-economic development and vice-versa. In terms of

socio-economic development all the 13 districts districts in Andhra Pradesh are relatively

more backward than the other districts of India (Indian Institute of population studies).

OBJECTIVES OF THE STUDY

1. To study the relative shares of Districts in the Gross State Domestic Product and per

capita income of residuary state of Andhra Pradesh.

2. To study the sectoral contribution to Gross State Domestic Products in Andhra Pradesh.

3. To identify the factors responsible for growing regional imbalances between the

regions in Andhra Pradesh.

4. To suggest measures for accelerating growth in Andhra Pradesh.

METHODOLOGY

The objective of this research is to examine the inter-district disparity or inequality

among various sectors in the state of Andhra Pradesh. The analysis of the above objectives

is based on the some selected variables like District Domestic Product, District per capita

income, Sectoral contribution to GDDP and Occupational structure. All 13 districts of Andhra

Pradesh are considered for the study. The secondary data were collected from the various

sources like Economic Survey of Andhra Padesh, District census handbook and Statistical

abstract of Andhra Pradesh. The statistical techniques like Mean,Standard Deviation and Co-

efficient of Variations were used for measuring significant differences across the districts in

each sub region as well as across the sub regions in the state.

43

OUTLINE OF THE PAPER

The paper is organized as follows. In the second part of the paper, trends in GDDP,per

capita income and sectoral contribution to GDDP in the Residuary state of Andhra Pradesh

are presented. The third part outlines the factors responsible for growing regional imbalances

were analysed with relevant statistical evidence. Finally, the paper ends with policy implications

and conclusion.

PART-II

Table 2.1

District Wise Gross Value Added of A.P. at Constant Basic Prices with 2011-12 as base Year (Rs. Crore)

District 1960-61* 1993-94* 2011-12 2012-13 2013-14 2014-15

1.Srikakulam 719(8.19) 1307(3.66) 14306(4.09) 13915(3.98) 14698(3.87) 15243(3.70)

2.Vizianagaram —- 1362(3.81) 12591(3.60) 13606(3.89) 14469(3.80) 15309(3.71)

3.Visakapatnam 671(7.64) 3288(9.21) 47907(13.70) 43868(12.53) 46091(12.12) 48830(11.85)

North Coastal

Andhra 1390(15.83) 5957(15.67) 74804(21.40) 71389(20.39) 75258(19.79) 79382(19.26)

4.East Godavari 947(10.78) 4110(11.51) 38533(11.02) 38730(11.06) 41006(10.78) 43609(10.58)

5.West Godavari 860(9.79) 3170(8.88) 29656(8.48) 29293(8.37) 31714(8.34) 35942(8.72)

6.Krishna 972(11.07) 3604(10.09) 3774410.80) 39421(11.26) 44001(11.57) 48082(11.67)

7.Guntur 1301(14.82) 3928(11.00) 36096(10.33) 35414(10.12) 39251(10.32) 42641(10.35)

8.Prakasam —- 2369(6.63) 24255(6.94) 24257(6.93) 26110(6.87) 28085(6.81)

9.SPS Nellore 776(8.84) 2330(6.5) 20956(5.99) 22542(6.44) 24136(6.35) 26192(6.35)

South Coastal

Andhra 4856(55.32) 19511(54.65) 187240(53.56) 189657(54.18) 206218(54.23) 224551(54.48)

10.YSR 478(5.44) 1968(5.51) 16864(4.82) 16066(4.59) 18045(4.75) 20203(4.90)

11.Kurnool 698(7.95) 2520(7.05) 21416(6.13) 22066(6.30) 25935(6.82) 27553(6.68)

12.Ananthapuram 710(8.08) 2793(7.8) 23773(6.80) 23851(6.81) 25489(6.70) 28633(6.95)

13.Chittoor 646(7.35) 2948(8.25) 25484(7.29) 27014(7.72) 29333(7.71) 31867(7.73)

Rayalaseema 2532(25.84) 10229(28.65) 87537(25.04) 88997(25.42) 98802(25.98) 108256(26.26)

ANDHRA

PRADESH 8778(100.0) 35697(100.0) 349581(100.0) 350043(100.0) 380279(100.0) 412188(100.0)

Mean 798 2746 26890 26926 29252 31706

*GDDP at Factor cost of Andhra at constant Prices(1993-94)

Source: Directorate of Economics and Statistics

Structure and Development in the Residuary State of Andhra Pradesh : 1960-2015 • T. KOTI REDDY


The table 2.1 provides information about District wise Gross Value added at constant

basic prices. It is clear from the table that in 2014-15, the contribution of South Coastal

Andhra region to state’s Gross Value Added accounted for 54.48 per cent followed by

Rayalaseema region (26.26 per cent) and North Coastal Andhra region (19.26 per cent). Six

districts namely Visakhapatnam, Krishna, East Godavari, Guntur, West Godavari and Chittoor

had higher GVA than region average in 2014-15.In terms of percentage share of GVA to

state’s GVA Visakhapatnam contributed maximum to the state’s GVA with 11.85 per cent

share followed by Krishna (11.67 per cent), East Godavari(10.58 per cent),Guntur(10.35 per

cent),West Godavari(8.72 per cent) and Chittoor (7.73 per cent) in 2014-15. Srikakulam(3.70

per cent), Vijayanagaram districts (3.71 per cent) in North coastal Andhra and YSR district

(4.90 per cent) in Rayalaseema have contributed less to GVA of Andhra region in 2014-15.

The per capita income at constant prices for all the districts for the period 1960-61 to

2014-15 is provided in table 2.2. It is observed that South coastal Andhra region stands first

interms of per capita income followed by Rayalaseema and North Coastal Andhra region

during the study period. Five districts namely West Godavari, Krishna, Guntur, Nellore and

Ananthapuram have per capita income higher than Andhra region with Krishna reporting the

highest per capita income followed by West Godavari and Guntur in 1960-61. The per capita

income in these districts was recorded at high due to bumper crop production. A variation in

per capita income among the districts and regions clearly reflects difference in the sectoral

development. Visakhapatnam, West Godavari, Krishna, Guntur, Prakasam and Nellore districts

have per capita income higher than the region average in 2014-15. It can be observed that

45

highest per capita income was recorded in Visakhapatnam district (Rs.105174) followed by

Krishna (Rs. 101003), West Godavari and Nellore districts. District disparity in terms of per

capita income in the residuary state of Andhra Pradesh during 1990-91 (C.V. 0.15) which has

increased drastically in 2014-15 (C.V. 0.20). It is observed from the table that Inter-district

disparity within the districts is higher in North Coastal Region (CV raised from 0.03 in 1960-

61 to 0.37 in 2014-15) when compared with other regions of Andhra Pradesh during the study

period. Inter-district disparities in terms of per capita income were reduced in both the regions

of South Coastal (CV reduced from 0.10 in 1960-61 to 0.09 in 2014-15) and Rayalaseema

(CV reduced from 0.07 in 1960-61 to 0.04 in 2014-15).

Table 2.2

District wise per capita income based on NDDP at constant basic prices with 2011-12 as base year

(In Rupees)

District 1960-61* 1993-94* 2011-12 2012-13 2013-14 2014-15

1.Srikakulam 3070 5491 51645 50321 52762 54139

2.Vizianagaram — 6334 52865 56474 59477 62194

3.Visakapatnam 2929 9594 105362 96337 100104 105174

North Coastal Andhra(Mean) 2999 7139 209872 203132 212343 221507

CV** 0.03 0.30 0.44 0.37 0.36 0.37

4.East Godavari 3631 8862 71120 71139 74677 78826

5.West Godavari 4349 8809 72811 72003 77479 86981

6.Krishna 4682 9372 81851 85092 93645 101003

7.Guntur 4321 9367 72760 70808 77930 83692

8.Prakasam — 8330 70792 70673 75662 80516

9.SPS Nellore 3817 9436 73132.33 74196 78888 84650

South Coastal Andhra(Mean) 4160 9029 442466.3 443911 478281 515668

CV** 0.10 0.05 0.06 0.08 0.09 0.09

10.YSR 3563 8360 57317 54450 60670 67283

11.Kurnool 3654 8069 52324 53806 62941 66080

12.Ananthapuram 4016 8430 56869 57257 60744 67491

13.Chittoor 3376 8682 60032 62939 67851 72797

Rayalaseema(Mean) 3652 8385 226542 228452 252206 273651

CV** 0.07 0.03 0.06 0.07 0.05 0.04

ANDHRA PRADESH (Mean) 3764 8540 68866 68730 74063 79442

CV** 0.15 0.15 0.23 0.20 0.19 0.20


*1960-61&1993-94 Figures are at Per capita GDDP of Andhra at factor cost (1993-94 Price)

** CV: Authors Own Calculation



Table 2.3

Sectoral Contribution to GDDP of Andhra region

1993-94 2010-11** 2014-15

District Agri- Industry Service Agri- Industry Service Agri- Industry Service

culture culture culture

1.Srikakulam 36.0 14.6 49.4 19.6 24.3 56.1 21.72 23.15 55.12

2.Vijayanagaram 33.8 17.8 48.4 27.1 21.1 51.8 24.80 24.21 50.97

3.Visakhapatnam 16.5 31.8 51.7 10.1 36.6 53.3 10.21 41.18 48.59

4.East Godavari 35.5 24.9 39.6 27.6 25.3 47.1 25.72 31.56 42.70

5.West Godavari 48.1 14.3 37.6 43.7 13.5 42.8 42.20 14.86 42.92

6.Krishna 41.4 17.5 41.1 28.5 18.8 52.7 28.33 23.32 48.34

7.Guntur 46.7 13.4 39.9 31.0 20.9 48.1 31.04 23.98 44.96

8.Prakasam 43.7 17.1 39.2 35.2 24.3 40.5 36.70 24.3 38.91

9.Nellore 43.8 18.0 38.2 29.5 23.2 47.3 29.02 24.56 46.41

10.YSR 40.4 19.6 40.0 27.6 26.4 46.0 24.44 27.76 47.78

11.Kurnool 44.7 15.3 40.0 30.8 22.7 46.5 33.98 19.72 46.28

12.Anantapur 41.3 20.8 37.9 23.3 28.5 48.2 27.65 25.19 47.12

13.Chittoor 38.5 21.7 39.8 25.8 25.2 49.0 21.92 30.12 47.94

Andhra 39.5 19.9 40.7 27.3 24.7 48.5 27.28 26.45 46.25

Source: GDDP,AP,2008&Socio-Economic Survey 2011-12,AP &Economic survey 2015-16

Note: *Old series ** New series

The data revealed that in 2010-11 the share of services in GSDP was as high as 48.5

per cent while the share of agriculture and allied activities slipped to only 27.3 per cent. It

was also noticed that the contribution of services to GDDP was more in all the districts of

Andhra Pradesh except in west Godavari and Prakasam. The expansion of services accelerated

further in the years after 2011-12 propelled by high rate of growth in Trade&Repair services,

Hotel & Restaurants, Real estate, Professional services and other services etc. By 2014-15

agriculture and allied activities accounted for 27.28 per cent of the GSDP of Andhra Pradesh.

The share of industry was registered at 26.45 per cent while the share of services was 46.25

per cent. It was also observed that the share of services in GDDP of all the districts in Andhra

Pradesh was more in 2014-15. The above analysis clearly brings out the services-led pattern

of economic growth in Andhra Pradesh.

As shown in Table 2.4.occupations were grouped under 4 categories.Under “Others”

head is included services, registered manufacturing etc.In 1961 the relative share of cultivators

in total workers was higher at 39 per cent, but its share as percentage of total workers

declined to 36 per cent in 2001 and then to 16 per cent in 2011. The share of agricultural

47

labourers increased from 29 per cent in 1961 to 44 per cent in 2011. It was observed that the

relative share of workers in household industries was at 10 per cent in 1961, but declined to

5 per cent in 2001 and then to 3 per cent in 2011. The relative share of others increased from

22 per cent in 1961 to 30 per cent in 2001 andthen to 37 per cent in 2011.Total main workers

have graduallyincreased from 119 lakhs in 1961 to 172 lakhs in 2001 and then to 192.32

lakhs in 2011.

Table 2.4

Occupational Structure of Andhra Region (%)

Occupations 1961 2001 2011

1.Cultivators 39 36 16

2.Agricultural labour 29 29 44

3.Household Industries 10 05 03

4.Others 22 30 37

5.Total Main workers 100(119) 100(172) 100(192.32)

Source: Four decades of development, Government of AP, 1997 and Statistical Abstracts, AP

Note: Figures in round brackets are total main workers in Lakhs

REASONS FOR GROWING DISPARITIES ACROSS REGIONS IN

ANDHRA PRADESH

Source-Wise, District Wise Net Area Irrigated

Increase in agricultural production and productivity depends, to a large extent, on the

availability of water. However, the availability of irrigation facilities is highly inadequate in

Andhra Pradesh. In 1956-57, gross irrigated area as percentage of gross cropped area was

only 12.52 per cent. Despite massive investments on irrigation projects during the past 60

years gross irrigated area as percentage of gross cropped area was increased to 45.88 per cent

A wide variation in the availability of irrigation facilities has contributed not only for growing

regional inequalities but also for income inequalities among the farmers of the 3 regions in

the state.

The above table 3.1 provides information about Source-wise Net area irrigated across

the districts of Andhra region.It was observed from the table that canal irrigation is the main

source of irrigation in Andhra Region. Area irrigated under wells has been increasing due to

availability of plenty of ground water partly due to percolation impact of canal irrigation. The

total net irrigated area in Andhra Pradesh during 2014-15 was 29.27 lakh Hectares and out

of which area under canals accounted for 14.29 lakh hectares, and wells accounted 10.8 lakh

hectares. A close observation of the table reveals that canal irrigation was more prominent in



South Coastal region of Andhra Pradesh when compared with North Coastal and Rayalaseema.

South coastal Andhra alone accounted for 75.02 per cent of the total land under canal

irrigation in the entire Andhra Pradesh followed by North Coastal Andhra (14 per cent ) and

Rayalaseema (10.99 percent).In terms of well irrigation in per centage terms, out of the total

land under under this source was more in South Coastal Andhra (53.52 per cent)followed by

Rayalaseema (40.74 per cent) and North Coastal Andhra Pradesh (5.74 per cent). It indicates

a wide regional variation in the development of irrigation facilities.

Table 3.1

Source-wise, District wise net area irrigated 2014-15 (area in lakh hectares)

District Canals (%) tanks (%) wells (%) others (%) total (%)

1.Srikakulam 1.14 7.98 0.59 20.21 0.08 0.74 0.06 4.76 1.87 6.39

2.Vizianagaram 0.4 2.80 0.76 26.03 0.35 3.24 0.04 3.17 1.55 5.30

3.Visakapatnam 0.46 3.22 0.26 8.90 0.19 1.76 0.23 18.25 1.14 3.89

North Coastal Andhra 2 14.00 1.61 55.14 0.62 5.74 0.33 26.19 4.56 15.58

4.East Godavari 1.78 12.46 0.21 7.19 0.63 5.83 0.18 14.29 2.8 9.57

5.West Godavari 1.68 11.76 0.13 4.45 1.73 16.02 0.08 6.35 3.62 12.37

6.Krishna 2.05 14.35 0.14 4.79 0.64 5.93 0.11 8.73 2.94 10.04

7.Guntur 3.29 23.02 0.09 3.08 0.8 7.41 0.19 15.08 4.37 14.93

8.Prakasam 0.95 6.65 0.04 1.37 1.16 10.74 0.09 7.14 2.24 7.65

9.SPS Nellore 0.97 6.79 0.48 16.44 0.82 7.59 0.07 5.56 2.34 7.99

South Coastal Andhra)10.72 75.02 1.09 37.33 5.78 53.52 0.72 57.14 18.31 62.56

10.YSR 0.22 1.54 N 1.14 10.56 0.02 1.59 1.38 4.71

11.Kurnool 1.1 7.70 0.09 3.08 1.09 10.09 0.18 14.29 2.46 8.40

12.Ananthapuram 0.22 1.54 0.01 0.34 1.02 9.44 0.01 0.79 1.26 4.30

13.Chittoor 0.03 0.21 0.12 4.11 1.15 10.65 0 0.00 1.3 4.44

Rayalaseema 1.57 10.99 0.22 7.53 4.4 40.74 0.21 16.67 6.4 21.87

ANDHRA

PRADESH 14.29 2.92 10.8 1.26 29.27


The above table 3.2. provides information about Large and Mega Industrial projects

gone into production upto March 2015 in Andhra region. As many as 1762 large and mega

projects are operating in Andhra Pradesh upto March 2015 with a total investment of Rs.77292

crore. These industries have created employment for 426278 persons. District wise distribution

of Large and Mega projects in respect of the number of units, Guntur District stands first

followed by East Godavari and Visakhapatnam in the state. While in terms of Investment

49

Visakhapatnam stands first followed by East Godavari. In terms of employees Visakhapatnam

stands first in the state followed by East Godavari and Guntur districts. It could be inferred

that YSR, Prakasam, Vizayanagaram, Srikakulam and Vijayanagaram districts were

comparatively low in the state in terms of number of units, investment and employees. A wide

variation in industrial development across the districts contributed for growing regional

inequalities in Andhra Pradesh.

Table 3.2

Large and Mega Industrial Projects Gone Into Production Upto March 2015

District Units(No.) Investment (Rs.crore) Employment(No.)

1.Srikakulam 99 1341 14563

2.Vizianagaram 62 3142 33848

3.Visakhapatnam 192 15574 67967

4.East Godavari 217 13855 49893

5.West Godavari 160 1977 26592

6.Krishna 169 5285 32515

7.Guntur 204 6180 44303

8.Prakasam 84 1717 16436

9.SPS Nellore 144 5085 39058

10.YSR 43 5960 17189

11.Kurnool 138 6644 21417

12.Ananthapuram 92 5782 26619

13.Chittoor 158 4750 35878

ANDHRAPRADESH 1762 77292 426278

Source: Industries department,Govt of AP

SPREAD OF BANK BALANCES AND DEPOSITS

There is a close relation between distribution of bank branches and financial

intermediation which facilitates easy access to financial resources. The details are presented

in Table 3.3.

The above table 3.3 provides information about district wise number of branches,

deposits and advances of commercial banks. It is observed from the table that there are wider

variations in terms of number of branches, deposits mobilized and advances provided for

various purposes by the commercial banks among the districts. In terms of number of branches

Krishna district stands first followed by Guntur, East Godavari and Visakhapatnam. The

number of branches, deposit mobilization and advances provided by the banks was registered

at lowest in the districts like Srikakulam, Vijayanagaram and YSR Districts. In terms of



Deposit mobilization Visakhapatnam stands first followed by Chittoor and Krishna Districts.

In terms of advances provided by the banks Visakhapatnam stands first followed by Krishna

and Guntur districts. In west Godavari district the credit-deposit ratio was registered at

highest followed by Nellore and Prakasam districts.

Table 3.3

District Wise No of Bank Branches, deposits, Advances as on 30 th Sep 2015

District No.of Branches Deposits (Rs.crore) Advances(Rs. crore) Credit-Deposit Ratio

1.Srikakulam 278 6177.12 5690.67 92.12

2.Vizianagaram 285 5581.59 4682.04 83.88

3.Visakapatnam 700 34675.58 29325.93 84.57

4.East Godavari 724 18229.16 24783.18 135.95

5.West Godavari 572 13138.77 21425.36 163.07

6.Krishna 753 25745.38 28681.65 111.41

7.Guntur 738 19839.40 27195.68 137.08

8.Prakasam 439 9153.75 14296.17 156.18

9.SPS Nellore 397 9462.06 14840.92 156.85

10.YSR 358 9350.85 9414.07 100.68

11.Kurnool 439 10956.72 11818.79 107.87

12.Ananthapuram 438 13647.18 12424.18 91.04

13.Chittoor 558 29857.50 15716.82 52.64

ANDHRA PRADESH 6679 205815.06 220295.46 107.04

Source: Finance (Institutional Finance) Department

CONCLUSION AND POLICY IMPLICATIONS

Inter-district disparity in per capita income in Residuary state of Andhra Pradesh is not

only high, but over the period of time it has been increasing significantly. According to the

latest National Sample Survey Organisation (NSSO) report, Key Indicators of Situation of

Agricultural Households in India, released in December, over 93% of all farm households in

Andhra Pradesh are indebted. Hence, Agriculture policy is to be drawn up by the government

of Andhra Pradesh for the benefit of farmers and regional planning for reducing regional

disparities. In order to develop the backward regions like North Coastal Andhra and

Rayalaseema, the central assistance should be directly linked with specific programmes.

Development potentials of the backward areas should be clearly identified and proper

steps should be taken to develop such potentialities in order to remove such relative

backwardness of those areas. Industrial development alone cannot tackle the problem of

backward areas. Proper steps must be taken for agricultural development in backward areas

51

and for that adequate infrastructural facilities in the form of irrigation facilities, command

area development, land reclamation measures, development of dry land farming etc., must be

taken along with the growth of agro-based industries.There is a need to speed up the completion

of ongoing irrigation projects by allocating sufficient funds. Thus necessary co-ordination

must be made between the agricultural and industrial development of these backward areas

so that benefit of such development can percolate to the appropriate level and the people of

those backward areas can reap the direct and indirect benefits of such development. social

and economic infrastructure, efficiency of administration and the quality of governance

including law and order situation are important factors in attracting private investment.

REFERENCES

1. Agarwala, A.K and P.L. Hazarika (2002) “Regional Disparities in Economic Development of Assam:

A District Level Study” Indian Journal of Regional Science Vol. XXXIV, No. 2

2. Basavaraj, S. Benni (2008): Infrastructure Development and Regional Disparities – A Comparative

District Level Analysis in Karnataka, The Journal of Indian Management & Strategy, Vol.13,

Issue I

3. B.N.Srikrishna Committee (2010): “Committee for Consultations on the Situation in Andhra Pradesh”,

Dec 2010.

4. Government of Andhra Pradesh (2015-16) “Socio-Economic Survey, Planning Department.”

5. Gulati, S.C. (1977): Dimensions of Inter-District Disparities, Indian Journal of Regional Science,

Vol. 9, No. 2.

6. Indian Institute of Population Studies (2006): “Socio-Economic and Demographic Indicators”,Mumbai

7. Ray Chaudhuri, Ajitava and Sushil Kr. Halder (2009): An Investigation into the Inter-District Disparity

in West Bengal, 1991-2005, EPW June 27, Vol. XLIV Nos.26 & 27

8. Sarkar S.(2009) “Disparities in Infrastructural development-An inter-district analysis of West Bengal”,

The IUP Journal of Infrastructure, Vol.VII, Nos 3&4, Sep-Dec, P.56-78.

9. S. Kishan Rao & Rahul A. Shastri (2014): Structure and Development of the Economies of telangana

and AP States (1956-2014),National Akademi of Development

10. Suryanarayana, M.H., (2009): ‘Intra-State Economic Disparities:Karnataka and Maharashtra’, Economic

and Political Weekly, June 27, Mumbai

11. V.K.Puri & S.K.Misra (2014) “Indian Economy”, Himalaya Publishing House



ARTICLE / 8

HOUSEHOLD LEVEL POVERTY IN TWO ECONOMIESOF ANDHRA PRADESH & TELENGANA AND

COMPARISON WITH UTTAR PRADESH & ALL INDIA

Alok Kumar Pandey & A.K. Gaur

INTRODUCTION

The issue of Poverty has attracted much attention from researchers since long time. As

far back as 1776, Adam Smith recognized the relativity of absolute measures by defining

“necessaries” as “not only the commodities which are indispensably necessary for the support

of life, but whatever the custom of the country renders it indecent for credible people, even

of the lowest order, to be without”. The conventional measures of poverty relate household

per capita income or expenditure estimates to a poverty line derived from a nutrition-based

estimate of minimum income or expenditure. There is widespread criticism of this approach

on the grounds that it fails to capture important dimensions of poverty and that it often fails

to reflect subjective perceptions of well-being. Greeley (1994) argues that the polemic on

method is misdirected and it confuses measures of poverty with measure of well-being and

counting problems with concept problems. In underdeveloped countries, the poverty line is

commonly set at subsistence level, but what is the level of subsistence for each dimension

of poverty and vulnerability? In developed countries, poverty is often considered as a relative

concept. The level of the poverty line is there often expressed as a percentage of the central

tendency. Such ambiguous choices often induce controversy, especially because the incidence

of poverty can be very sensitive to the level of the poverty line.

Finally, the poverty line is recognized generally as being conceptually flawed. It is

specified by a discreet income level and the poor are defined as those with incomes at or

below the poverty line. The nonpoor are defined as those whose incomes are above the

poverty line. Still, about one third of the population lives under the International Poverty line

of $1.08 per person per day, and out of them three in four poor people live in rural areas.

Thus poverty in India is mainly a rural problem.It is against this backdrop, the present study

has been undertaken, which is broadly divided in to five sub sections. Section I present

Assistant Professor, Centre for Integrated Rural Development, Faculty of Social Sciences, Banaras HinduUniversity, VaranasiProfessor, Department of Economics, Faculty of Social Sciences, Banaras Hindu University, Varanasi.

53

introduction while section II presents review of literature in detail. Data and research

methodology have been presented in section III while results and discussions are presented

in section IV. Section V presents suggestion and conclusion of the present study.

DATA AND METHODOLOGY

The National Sample Survey Organization (NSSO) conducts regular consumer

expenditure surveys (CES) as part of its “rounds”, each round being normally of a year’s

duration and covering more than one subject of study. The surveys are conducted through

household interviews, using a random sample of households covering practically the entire

geographical area of the country. Every 5 years or so, a larger-than-usual-scale CES is

conducted as the main enquiry of a round. This gives rise to a “quinquennial series” of CES’s.

In the present study 66th quinquennial series has been taken for the data analysis. Poverty

prevents people from advancing in economic and social spheres of life. For comparing

poverty indices based on average monthly per capita consumption expenditure, households

source of income in rural and urban region of Andhra Pradesh, Telengana, Uttar Pradesh and

All India have been taken in this study (see notes).

All the indices have been calculated by using STATA 11.0 and “poverty”, “povdeco”

and “apoverty” programme developed by Kerm (1999) and further Azevedo (2006) Jenkins

(2006). In the present paper we have used “apoverty”. Grpah like Kernal Density, Pen’s

Parade, Lorenze and Inequality curve, generalized Lorenz curve for rural and urban based on

AMPCE MRP for the three states and all India has been drawn for the graphical presentation

of poverty. Poverty indices (see notes) has been calculated for households level consumption

expenditure in rural and urban region of Andhra Pradesh, Telegana, Uttar Pradesh and all

India.

RESULTS AND DISCUSSION

The average family size has been 3.8 persons per family for Andhra Pradesh and 4.0

persons for Telengana. Average family size has been 5.6 persons per family for all India and

6.7 persons for Uttar Pradesh. As for as annual expenditure of per family is concerned Rs.

77939 (based on URP) and Rs. 80457 (based on MRP) for all India and Rs. 75303 (based

on URP) and Rs. 77909 (based on MRP) for Uttar Pradesh has been found for NSSO 66 th

rounds of unit level survey.

Table 1 presents Andhra Pradesh, Telegana, Uttar Pradesh and all India distribution of

rural urban households in the year based on 66 th round of socio economic survey of NSSO.

In this round of survey total 100855 households were covered for all India level, 3992

household were covered in Andhra Pradesh, 2900 household were covered in Telegana and

8993 households were covered for Uttar Pradesh. From rural India the total HH number was

59119 (58.62 %) and from urban India it was 41736 (41.38 %) and from rural Uttar Pradesh

the total number was 5906 (65.67 %) and from urban Uttar Pradesh it was 3087 (34.33%)

Household Level Poverty • ALOK KUMAR PANDEY & A.K. GAUR


reported in survey. From rural Andhra Pradesh the total HH was 2424 (60.72%) and from

urban Andhra Pradesh it was 1568 (39.28%) and from rural Telengana the total number was

1504 (51.86 %) and from urban Telengana it was 1396 (48.14%) reported in survey.

Table 2 contains general characteristics of the Head of Household and average monthly

per capita expenditure of the households for Andhra Pradesh, Telegana, Uttar Pradesh and all

India. In this round AMPCE has been 1099 (URP) and 1150 (MRP) for rural Andhra Pradesh

and for urban Andhra Pradesh it has been1150 (URP) and 1862 (MRP). While AMPCE has

been 898 (URP) and 997 (MRP) for rural Telegana and for urban Telegana it has been 1990

(URP) and 2197 (MRP). This reveals the fact that rural Andhra Pradesh is having hire

AMPCE than all India, rural Uttar Pradesh and rural Telengana while in urban region Telegana

is having hire AMPCE than all India, Uttar Pradesh and Andhra Pradesh (see table 2). In

Uttar Pradesh, 65.67 percent households were covered from rural areas and their AMPCE

was Rs. 828.68 and 832.18 based on URP and MRP respectively while 34.33 percent

households were covered in urban areas and their AMPCE was Rs. 1364.99 and Rs. 1512.16

based on URP and MRP respectively. For all India level, 58.62 percent households were

covered from rural areas and their AMPCE was Rs. 927.70 and 953.05 based on URP and

MRP respectively while 41.38 percent households were covered in urban areas and their

AMPCE was Rs. 1785.82 and Rs. 1856.01 based on URP and MRP respectively.

Distribution of households and their AMPCE for the various sources of income in rural

and urban region of Andhra Pradesh, Telegana, Uttar Pradesh and all India are presented in

Table 2. The source of income for the households in the rural region of Andhra Pradesh,

Telegana, Uttar Pradesh and all India is Self-employed in non-agriculture, Agricultural labour,

Other labour in rural areas, Self-employed in agriculture, Others activities in rural areas and

for urban region of Andhra Pradesh, Telegana, Uttar Pradesh and all India are Self-employed

in urban areas, Regular wage/salary earning in urban areas, Casual labour in urban areas,

Others activities in urban areas. Table 2 also presents religion and social group wise percentage

distribution and average monthly per capita expenditure of the households for the 66 th round.

Excluding Hindu and Muslims, other religions are having less percentage while their AMPCE

is higher than Hindu and Muslims in Andhra Pradesh, Telegana, Uttar Pradesh as well as All

India. Among social groups, Other Backward Class is having higher percentage in Andhra

Pradesh, Telegana, Uttar Pradesh as well as All India. While average monthly per capita

consumption expenditure is higher for other social groups in state and All India level.

Graph 1 to 4 represents kernal density curve for rural urban based on AMPCE MRP for

Telengana, Andhra Pradesh, Uttar Pradesh and All India. Graph 5 to 8 represents Pen,s

Parade curve for rural urban based on AMPCE MRP for Telengana, Andhra Pradesh, Uttar

Pradesh and All India. Graph 9 to 12 represents Lorenz and Inequality curve for rural urban

based on AMPCE MRP for Telengana, Andhra Pradesh, Uttar Pradesh and All India. Graph

13 to 16 represents Generalized Lorenz curve for rural urban based on AMPCE MRP for

Telengana, Andhra Pradesh, Uttar Pradesh and All India.

55Household Level Poverty • ALOK KUMAR PANDEY & A.K. GAUR


Table 3 represent Mean AMPCE among poor, mean of poverty gaps (poverty line –

AMPCE) for the three states i.e. Andhra Pradesh, Telengana, Uttar Pradesh, and all India. All

the three states are having higher mean of AMPCE among poor than rural all India. Andhra

Pradesh and Uttar Pradesh is having lower value of mean of poverty gaps among poor than

Telengana and all India in Rural areas. For urban areas only Uttar Pradesh is having lower

value of Mean of poverty gaps among poor.

Based on average monthly per capita consumption expenditure the poverty line declared

by planning commission for state and all India level various poverty related ratios (index)

have been calculated. These are Headcount ratio, Extreme Poverty Headcount ratio, Aggregate

57

poverty gap, Per capita poverty gap, Poverty gap ratio, Income gap ratio, Watts index, Foster–

Greer–Thorbecke class index (at 0.5, 1.5, 2.0, 2.5, 3.0, 3.5, 4.0, 4.5 and 5.0 ), Clark–

Hemming–Ulph class index (0.10, 0.25, 0.50, 0.75 and 0.90), Sen index. Rural and urban

poverty indices have been calculated for Andhra Pradesh, Telegana, Uttar Pradesh and all

India level (for URP and for MRP) based household level AMPCE for the 66th rounds of

survey and presented in table 4.

In general, incidence of poverty is much higher in rural areas compared to urban areas.

HCR reported 34.44 (for URP) and 26.97 (for MRP) rural region and 17.50 (for URP) and

11.26 (for MRP) in Urban Region of Telegana respectively. HCR reported 26.30 (for URP)

and 19.94 (for MRP) rural region and 25.49 (for URP) and 23.09 (for MRP) in Urban Region

of Andhra Pradesh respectively. HCR reported 45.04 (for URP) and 39.349 (for MRP) rural

region and 34.402 (for URP) and 31.665 (for MRP) in Urban Region of Uttar Pradesh

respectively. HCR for rural All India is 38.280 (for URP) and 33.813 (for MRP) and for

urban all India 24.293 (for URP) and 20.881 (for MRP) respectively. In rural region of

Telegana, Andhra Pradesh, Uttar Pradesh and all India, poverty related indices are higher than

the Telegana, Andhra Pradesh, Uttar Pradesh and urban all India (Except AMPCE at MRP

for Andhra Pradesh).

Extreme Poverty Headcount ratio, Aggregate poverty gap, Income gap ratio, Watts

index, Foster–Greer–Thorbecke class index (at 2.5, 3.0, 3.5, 4.0, 4.5 and 5.0) and Sen index

reported lower values for rural Andhra Pradesh, Telengana, All India than rural Uttar Pradesh

(for both URP and MRP) respectively based on consumption expenditure at household level

for the 66th round.

CONCLUSION AND SUGGESTION

The study focused on poverty in Andhra Pradesh, Telengana, Uttar Pradesh and All

India at household level. The data for the study has been taken from the NSSO 66 th rounds

survey. Various poverty indices have been calculated consumption expenditure. These are

Headcount ratio, Extreme Poverty Headcount ratio, Aggregate poverty gap, Per capita poverty

gap, Poverty gap ratio, Income gap ratio, Watts index, Foster–Greer–Thorbecke class index

(at 0.5, 1.5, 2.0, 2.5, 3.0, 3.5, 4.0, 4.5 and 5.0 ), Clark–Hemming–Ulph class index (0.10,

0.25, 0.50, 0.75 and 0.90), and Sen index.

All the poverty indices used in the present paper for measuring poverty (excluding

extreme poverty, head count ratio) reported the highest value for the household whose source

of income is other labour in rural areas. For rural all India, poverty indices show that households

whose source of income is from agricultural labour are having maximum value than any other

activities. The result shows that the state government must focus sincerely on those households

who are engaged in other labour in rural areas and agricultural labour. The central government

should again work out for those household who are engaged in Agricultural labour to reduce



or remove poverty at household level. But the need of the hour is to identify poor and make

them self dependent by developing technical skills and entrepreneurial ability, so that the

society could progress without poverty and hunger.

NOTES:

MEASURES OF POVERTY

There are various indices for the measures of poverty. The very common is head count

index. Head count index measures the proportion of the population that is poor.

Head count index H = q/n

Where q is number of poor and n is the total population. The range of head count index

is from 0 to 1 i.e. nobody poor to everybody poor. This index does not differentiate between

extremely low incomes and income just below the poverty line.

Poverty gap index measures the extent to which individuals fall below the poverty line

as a proportion of the poverty line.

The Income Gap Ratio(I) is the mean distance of the incomes of the poor from the

poverty line, expressed as a proportion of the poverty line.

The income gap gi of any individual i is the difference between the poverty line z and

his income yi. gi= z - y

i

Obviously, gi is nonnegative for the poor and negative for others.

In 1968 Watts proposed the first distribution sensitive poverty measures. The Watts

poverty index is defined as

The Foster Greer Thorbacke (FGT) index is

59

is poverty aversion. The larger values of put higher weight on the poverty

gaps of the poorest people.

When, a = 0 then FGT

When, then FGT

FGT index can be calculated for the various values of i.e. 0.5, 1.5, 2.0, 2.5, 3.0, 3.5,

4.0, 4.5 and 5.0.

Clark Hemming and Ulph took an entirely different approach to constructing a distribution

sensitive poverty index with the help of Atkinsion’s class of Inequality measures CHU index

for poverty is as

Where, , yi is the per capita consumption of the j th

family, z is per capita poverty threshold and q is the number of families below the poverty

line. The rage of is from 0 to 1.CHU index can be calculated for the various values of

i.e. 0.10, 0.25, 0.50, 0.75 and 0.90.



The Sen Index of poverty

is the Gini index of inequality among the poor, H and I are head count and income

gap.

Sen Index can be written as

Where q is number of poor, n is number of person in the population and z is poverty

line.

REFERENCES

1. Brandon Roberts, Deborah Povich and Mark Mather, (2012), “Low-Income Working Families: The

Growing Economic Gap” Working Poor Families Project, POLICY BRIEF,

www.workingpoorfamilies.org

2. D Jayaraj, and S Subramanian (2012), “On the Interpersonal Inclusiveness of India’s Consumption

Expenditure Growth” Economic & Political Weekly, vol XLVII, no 45, pp 56-66.

3. Jayaraj, D and S Subramanian (2012), “On the Interpersonal Inclusiveness of India’s Consumption

Expenditure Growth” Economic & Political Weekly vol XLVII no 45, pp 56-66.

4. Jayati Ghosh, (2011), “Cash Transfers as the Silver Bullet for Poverty Reduction: A Sceptical Note”

Economic & Political Weekly, vol XLVI no 21, pp 67-71.

5. Kumar Mukul, (2012), “Invoking Everydayness in Poverty Studies in IndiaA Note on Approach and

Method” Economic & Political Weekly, vol XLVII no 38, pp 71-81.

6. Manna G C, (2012), “On Some Contentious Issues of the New Poverty Line”, Economic & Political

Weekly, vol XLVII no 15, pp 11-14

7. Manna G C, (2012), “On Some Contentious Issues of the New Poverty Line”, Economic & Political

Weekly, vol XLVII no 15, pp 11-14

8. N Krishnaji, (2012), “Abolish the Poverty Line” Economic & Political Weekly, vol XLVII no 10, pp

10-11.

9. NSSO, (2011), “Level and Patterns of Consumer expenditure 2009-10”, National Sample Survey

Organization, Ministry of Statistics and Program Implementation, Govt. of India.

10. NSSO, (2012), “Household Consumer Expenditure Across Socio-Economic Groups” National Sample

Survey Organization, Ministry of Statistics and Program Implementation, Govt. of India.

11. Pandey A. K., (2013), “Inequality in consumption expenditure at household level in Uttar Pradesh:

Regression Based Inequality Decomposition (RBID)”, Journal of Global Economy (ISSN Print-0975-

3931, Online -2278-1277), Volume 9 No 2, pp 134-152.

61

12. Patnaik, Prabhat, (2013), “A Critique of the Welfare-Theoretic Basis of the Measurement of Poverty”

Economic & Political Weekly, vol XLVIII no 14, pp 16-19.

13. Rath Nilakantha, (2011), “Measurement of Poverty: In Retrospect and Prospect” Economic & Political

Weekly, vol XLVI no 38, pp 42-43.

14. Sheila Zedlewski and Austin Nichols, (2012) “What Happens to Families’ Income and Poverty after

Unemployment?”, This brief is part of the Urban Institute’s Low-Income Working Families project,

URBAN INSTITUTE, 2100 M Street, NW, Washington, DC, www.urban.org.

15. Subramanian, S, (2011), “The Poverty Line: Getting It Wrong Again”, Economic & Political Weekly,

vol XLVI no 48, pp 37-42.

Table 1

Rural Urban and Total Households and Population for Andhra Pradesh, Telegana, Uttar Pradesh and All-India.

Characteristics Telangana Andhra Pradesh Uttar Pradesh India

Household No. Percentage No. Percentage No. Percentage No. Percentage

Rural 1,504 51.86 2,424 60.72 5,906 65.67 59,119 58.62

Urban 1,396 48.14 1,568 39.28 3,087 34.33 41,736 41.38

Total 2,900 100 3,992 100 8,993 100 100,855 100

Population No. Percentage No. Percentage No. Percentage No. Percentage

Rural 6159 53.21 9362 61.87 34461 67.92 287139 61.28

Urban 5416 46.79 5769 38.13 16277 32.08 181412 38.72

Total 11575 100 15131 100 50738 100 468551 100

Source: NSSO 66th round Unit level data



Ta

ble

2

Gen

eral

Ch

arac

teri

stic

s of

the

Hea

d o

f th

e H

ouse

ho

ld a

nd

AM

PC

E o

f th

e H

ou

seh

old

s fo

r A

ndh

ra P

rad

esh,

Tel

egan

a, U

ttar

Pra

des

h

and

All

In

dia

.

Chara

cter

isti

csTe

leng

ana

An

dh

ra P

rad

esh

Utt

ar

Pra

des

hIn

dia

%A

vera

ge

%A

vera

ge

%A

vera

ge

%A

vera

ge

MP

CE

(‘)

MP

CE

(‘)

MP

CE

(‘)

MP

CE

(‘)

UR

PU

RP

MR

PU

RP

MR

PU

RP

MR

P

12

34

56

78

91

011

12

13

Sec

tor

Ru

ral

51.8

68

98

997

60.7

21

09

911

50

65.6

78

29

83

25

8.6

29

28

95

3

Urb

an

48.1

41

99

02

19

73

9.2

81

97

51

86

23

4.3

31

36

51

51

24

1.3

81

78

61

85

6

Sou

rce

of

Inco

me

of

ho

use

ho

ld b

y d

iffe

ren

t act

ivit

ies:

Ru

ral

Sel

f-em

plo

yed

in

non

-ag

ricu

ltu

re3

0.5

21

00

911

36

26.5

71

09

511

43

22.7

18

59

84

22

4.6

49

85

99

5

Agri

cult

ura

l la

bou

r1

6.4

97

58

816

19.1

905

964

7.0

66

73

67

811

.08

71

87

35

Oth

er l

ab

ou

r in

ru

ral

are

as

16.3

69

33

103

21

7.9

107

91

09

41

8.6

16

62

68

11

7.3

78

50

87

2

Sel

f-em

plo

yed

in

agri

cult

ure

24.9

39

70

11

09

18.6

51

04

31

08

43

9.3

28

71

87

62

8.1

09

71

10

01

Oth

ers

act

ivit

ies

in r

ura

l are

as

11

.70

11

95

130

31

7.7

81

88

01

97

61

2.3

11

07

51

07

61

8.8

11

38

21

44

6

Sou

rce

of

Inco

me

of

ho

use

ho

ld b

y d

iffe

ren

t act

ivit

ies:

Urb

an

Sel

f-em

plo

yed

in

urb

an

are

as

28.8

01

76

81

95

63

3.4

81

53

61

57

45

1.3

411

51

11

62

37

.39

16

38

17

18

Reg

ula

r w

age/

sala

ry e

arn

ing

in

urb

an

are

as

48.6

42

28

52

51

03

5.8

42

75

22

33

22

6.5

18

18

18

92

37

.79

21

53

21

70

Casu

al

lab

ou

r in

urb

an

are

as

11

.25

11

53

126

81

6.7

79

73

994

12.5

71

67

43

13

.35

99

31

00

7

Oth

ers

act

ivit

ies

in u

rba

n a

reas

11

.32

263

22

99

41

3.9

254

42

90

79

.65

21

80

37

51

11

.47

99

32

77

4

Rel

igio

n

Hin

du

84.4

81

24

71

38

58

6.9

21

28

71

33

18

0.4

49

58

99

47

6.1

711

50

11

91

Isla

m1

2.5

911

66

126

28

.94

165

51

30

71

8.9

78

16

83

31

2.3

41

02

01

03

2

63

12

34

56

78

91

011

12

13

Oth

ers

2.9

31

40

81

58

04

.13

147

01

44

40

.58

15

28

15

23

11

.49

16

56

16

92

Soci

al

Gro

up

s

Sch

edu

led

Tri

be

6.4

58

88

992

5.0

49

08

888

0.8

51

60

32

32

91

3.0

48

54

88

2

Sch

edu

led

Cast

e1

7.8

61

06

011

46

16.0

811

28

11

61

22.9

75

07

76

16

.25

88

79

23

Oth

er B

ack

ward

Cla

ss4

5.6

61

07

711

91

48.7

511

96

121

64

9.3

28

82

90

33

7.5

71

06

411

00

Oth

ers

30.0

31

80

12

01

73

0.1

41

74

01

71

92

6.9

41

22

91

26

63

3.1

41

57

16

22

Note

: C

alcu

late

d o

n t

he

bas

is o

f U

nit

lev

el d

ata

NS

SO

dat

a fo

r th

e 6

6th r

ou

nd

s.

Ta

ble

3

Var

ious

Mea

sure

s re

late

d w

ith h

ou

seh

old

bel

ow

po

ver

ty l

ine

at H

ou

seho

ld l

evel

co

nsu

mpti

on E

xp

end

iture

in

An

dh

ra P

rad

esh,

Tel

egan

a,

Utt

ar P

rades

h a

nd

All

In

dia

.

Chara

cter

isti

csTe

leng

ana

An

dh

ra P

rad

esh

Utt

ar

Pra

des

hA

ll I

nd

ia

Ru

ral

Urb

an

Ru

ral

Urb

an

Rura

lU

rba

nR

ura

lU

rba

n

Tota

l n

um

ber

of

ob

serv

ati

on

s1

50

41

39

62

42

41

56

85

90

63

08

75

911

94

17

36

Nu

mb

er o

f ob

serv

ati

on

s p

oor

251

161

403

350

17

69

95

711

88

68

41

7

Mea

n o

f m

pce

_m

rp a

mo

ng

st t

he

poo

r5

46

730

553

724

53

66

15

52

96

68

Mea

n o

f p

over

ty g

ap

s (p

over

ty

lin

e -

mp

ce_m

rp)

am

on

gst

th

e p

oo

r1

47

196

140

202

12

81

85

14

41

91

Pov

erty

Lin

e (A

MP

C_M

RP

)6

94

926

694

926

66

48

00

67

38

60

So

urc

e:

NS

SO

66

th r

oun

d U

nit

lev

el d

ata



Ta

ble

s 4

Pover

ty M

easu

re a

t H

ouse

ho

ld l

evel

co

nsu

mp

tion

Exp

end

itu

re i

n A

nd

hra

Pra

des

h,

Tel

egan

a, U

ttar

Pra

des

h a

nd

All

In

dia

.

Pove

rty m

easu

res

Tela

ngan

Andh

ra P

rade

shUt

tar

Prad

esh

All I

ndia

Rura

lUr

ban

Rura

lUr

ban

Rura

lUr

ban

Rura

lUr

ban

URP

MRP

URP

MRP

URP

MRP

URP

MRP

URP

MRP

URP

MRP

URP

MRP

URP

MRP

Head

coun

t rat

io34

.442

26.9

6917

.502

11.2

6026

.296

19.9

3525

.494

23.0

8845

.040

39.3

4934

.402

31.6

6538

.280

33.8

1324

.293

20.8

81

Extre

me P

over

tyHe

adco

unt r

atio

0.75

40.

753

0.45

80.

721

1.20

81.

425

0.48

70.

711

1.54

10.

616

2.10

01.

453

2.26

01.

473

1.57

11.

075

Aggr

egate

pov

erty

gap

1.13

80.

829

0.28

80.

211

1.26

20.

907

0.63

00.

526

8.66

36.

738

2.28

51.

968

43.3

7235

.433

13.2

5610

.802

Per c

apita

pov

erty

gap

54.5

1439

.731

30.1

7322

.124

38.9

4927

.983

55.8

7046

.664

64.8

1950

.420

67.8

6858

.432

59.4

5248

.570

49.0

1039

.939

Pove

rty g

ap r

atio

7.85

75.

727

3.25

72.

388

5.61

44.

033

6.03

15.

037

9.76

67.

597

8.48

57.

305

8.83

67.

219

5.70

14.

646

Incom

e ga

p ra

tio22

.813

21.2

3418

.609

21.2

1121

.349

20.2

3223

.656

21.8

1721

.683

19.3

0624

.663

23.0

6923

.084

21.3

5023

.469

22.2

51

Watt

s ind

ex9.

576

6.88

43.

905

2.93

56.

990

5.05

57.

350

6.13

011

.821

9.01

310

.572

8.98

010

.951

8.80

67.

093

5.72

1

FGT(

0.5)

15.3

3411

.629

6.95

84.

814

11.2

228.

227

11.6

7110

.036

19.6

0716

.078

15.9

7614

.247

17.1

3514

.511

10.9

669.

151

FGT

(1.5)

4.33

03.

056

1.68

91.

306

3.10

42.

234

3.34

12.

753

5.27

53.

911

4.85

34.

058

4.96

33.

925

3.23

02.

579

FGT(

2.0)

2.51

01.

722

0.94

40.

767

1.84

81.

352

1.93

81.

592

3.01

22.

137

2.92

22.

384

2.95

72.

271

1.94

11.

521

FGT(

2.5)

1.51

01.

010

0.55

80.

475

1.16

70.

874

1.16

20.

959

1.79

31.

220

1.83

01.

463

1.84

21.

377

1.21

80.

939

FGT(

3.0)

0.93

50.

610

0.34

40.

307

0.77

30.

593

0.71

50.

596

1.10

30.

722

1.18

30.

929

1.18

90.

867

0.79

00.

600

FGT(

3.5)

0.59

30.

378

0.22

00.

205

0.53

40.

418

0.44

90.

380

0.69

70.

441

0.78

60.

608

0.79

00.

564

0.52

70.

395

FGT(

4.0)

0.38

30.

239

0.14

50.

140

0.38

20.

302

0.28

70.

247

0.45

10.

276

0.53

40.

407

0.53

90.

377

0.36

00.

266

FGT(

4.5)

0.25

20.

154

0.09

70.

098

0.28

10.

224

0.18

60.

163

0.29

80.

176

0.37

10.

279

0.37

60.

258

0.25

10.

183

FGT(

5.0)

0.16

80.

101

0.06

70.

069

0.21

20.

169

0.12

20.

109

0.20

00.

115

0.26

20.

195

0.26

70.

180

0.17

80.

128

CHU

(0.10

)9.

377

6.75

13.

829

2.87

06.

822

4.93

07.

198

6.00

311

.584

8.85

210

.325

8.78

410

.700

8.62

06.

928

5.59

4

CHU

(0.25

)9.

091

6.56

03.

721

2.77

86.

585

4.75

46.

979

5.82

211

.242

8.61

89.

973

8.50

210

.343

8.35

46.

693

5.41

4

CHU

(0.50

)8.

646

6.26

13.

554

2.63

66.

226

4.48

76.

638

5.53

810

.710

8.25

39.

430

8.06

79.

792

7.94

26.

331

5.13

4

CHU

(0.75

)8.

236

5.98

43.

399

2.50

65.

904

4.24

86.

322

5.27

810

.219

7.91

38.

936

7.66

99.

292

7.56

56.

001

4.87

9

CHU

(0.90

)8.

005

5.82

73.

313

2.43

45.

727

4.11

66.

145

5.13

19.

943

7.72

18.

660

7.44

79.

014

7.35

45.

818

4.73

7

Sen

index

7.98

35.

824

3.28

52.

409

5.76

24.

146

6.08

75.

085

9.97

17.

742

8.51

97.

333

9.56

67.

771

5.83

54.

742

Note

: Ca

lculat

ed o

n the

bas

is of

Unit

level

data

NSSO

data

for t

he 6

6th roun

ds a

nd “a

pove

rty” S

TATA

com

mand

.

65

ARTICLE / 9

URBAN DEVELOPMENT IN ANDHRA PRADESHSTATE : A COMPARATIVE PICTURE

WITH TELANGANA STATE

S. Mansoor Rahman & N.T.K. Naik

ABSTRACT

The imminent formation of the new state of Telangana over 35 million people, the

merger of the former Hyderabad state with the Indian union in 1948 marked the end of

feudalism and opened up a vista of opportunities for development for the people of Telangana.

But not much time was a-llowed for socio-economic change and transformation in Telangana

before it was merged with the Andhra region to constitute the state of Andhra Pradesh in

1956. Telangana’s merger with the more resourceful, educated, skilled people Seemandhra

took new dimensions in the development of Telangana especially in Hyderabad.

The total population of Telangana is 3,51, million of the total 8,46,million people in

Andhra Pradesh.. In 2001, the population of Telangana was 3,09,87,271 and had a 14.59%

growth rate. However, in 2011, the growth rate dipped to 11.49%. Except Rangareddy district,

which registered a 48.15% growth in 2011 as against 40% in 2001, all the other districts

showed a decline. The other exception being Mahbubnagar district which maintained the

growth rate of 15%.Telangana has more people living in urban areas than Andhra Pradesh.

While TS has 38.7 per cent urban population, AP has 33.5 per cent

The population of the State is predominantly rural with 61.33% of people residing in

rural areas and the remaining 38.67% of people residing in urban areas. While the growth of

total population in the State has moderated to 13.58% in the decade 2001 to 2011 from

18.77% in the preceding decade, the growth of the urban population has been witnessing a

signifi cant increase. Urban population in the State grew by 38.12% in the decade 2001 to

2011 as compared with 25.13% in the preceding decade. In sharp contrast, rural population

in the State grew by a modest 2.13% as per the 2011 census. The growth of urban population

is mainly on account of migration from Seemandhra region of the erstwhile State of Andhra

Pradesh and partly on account of migration from within the State and other parts of the

country.

Associate Professor, Osmania College (Autonomous)Kurnool, (A.P)Department of Economics, Rayalaseema University, Kurnool, (A.P)


ARTICLE / 10

ECONOMIC SCENARIO OF ANDHRA PRADESH :ACHIEVING DOUBLE DIGIT INCLUSIVE GROWTH

Balla Appa Rao & D. Nagayya

Andhra Pradesh is envisaging a big structural transformation – both in terms of economic

progress and well-being of people as well. From a modest beginning in 2015-16, the State

aspires to achieve the status of a developed state in the country by 2029 in between navigating

through one among the best three states by 2022 with a vision to lay foundation of the sunrise

State of Andhra Pradesh. Eventually, Andhra Pradesh is to become a leading investment

destination in the World by 2050. Swift growth in double digit, better infrastructure,

participatory planning, and better governance through effective service delivery marked with

improved Happiness Index are going to be the key milestones for realization of Vision 2029

formulated by the State..

Andhra Pradesh, in the present form, in the post-bifurcation period from June 2, 2014,

when the division of the State into Telangana and residuary Andhra Pradesh took place,

consists of 13 districts with two regions – Coastal Andhra (9 districts) and Rayalaseema (4

districts). The State’s population in 2015 has crossed the 5 crore mark. This is one of the

progressive major states in the country pursuing development strategies with sufficient attention

paid to sustainable development goals (SDGs) on the social and human development scenario.

The state is the 7th largest in area, and 10 th largest in population among the 16 major states

of the country. In social indicators, it has a long way to go to be on a par with the other

southern and western states as revealed from Table 1. The state has many advantages for

sustainable growth of the economy. It has the second longest coastline of 974 kms., next only

to Gujarat. Visakhapatnam is the largest city and a commercial hub of the state, followed by

Vijayawada. Both are million cities as per 2011 population Census. The other commercial and

industrial centres include: Guntur, Kakinada, Rajamahendravaram, Kurnool, and Tirupati.

Hyderabad is currently the joint capital for a period not exceeding ten years from 2014. The

State is building a river-front, world class capital city, Amaravati, covering parts of Krishna

and Guntur districts, in the area declared as capital region.The state is endowed with a variety

of physio-geographic features ranging from Eastern ghats, Nallamala forests, Coastal plains

UGC Emeritus Professor, Ex-Dean and Head, Dept. Commerce and Management Studies, Andhra University,Visakhapatnam. (Andhra Pradesh).Consultant on Small and Medium Enterprises, Guntur; and Former Director (Industrial Development),National Institute for Micro, Small and Medium Enterprises (NI-MSME), Hyderabad.

67

to deltas of major rivers of Krishna and Godavari. The state pioneered in green revolution

in the 1970s with focus on paddy cultivation. It is known as the rice bowl of India.

At the end of September 2015, large and mega industries in the state number 1,784

enterprises, with 81,261 crore fixed investment, and employment of 4.36 lakhs. At the end

of March 2015, micro, small and medium enterprises (MSMEs) number 1,09,399, with fixed

investment of 19,000 crore, and employment of 12.09 lakhs. There are 272 industrial estates

and industrial development areas in the state promoted from early 1960s, with a few developed

in the recent two decades. These are now known as industrial parks, covering an area of over

36,000 acres. Of the 29 Special Economic Zones (SEZs) formally approved for the state, 19

have become operational in seven districts, of which 8 are in Visakhapatnam district. There

are four Software Technology Parks at Visakhapatnam, Kakinada, Vijayawada, and Tirupati.

Among the 13 districts, seven are categorised as less developed for which special attention

needs to be paid for accelerating industrialisation. These are four districts of Rayalaseema and

three of North Coastal Andhra (Srikakulam, Vizianagaram and Visakhapatnam).

It can be observed from Table 2 that GVA of Andhra Pradesh at constant prices for

2015-16 (AE) is estimated at Rs. 4,55,484 crore as against Rs. 4,12,188 crore during 2014-

15 (FRE), and registered growth of 10.5% (India 7.3%). The sectoral growth rates are 8.40%

for agriculture (India 1.12%), 11.13% for industry (India 7.35%), and 11.39% for services

(India 9.19%). A targeted approach encompassing all the sectors, has been quite helpful for

analysing the past trends sector-wise, and identifying the growth engines, and weak aspects.

GSDP growth rate at constant prices for the State in 2015-16 is 10.99% (India 7.6%). Sector-

wise percentage shares at current prices in GVA for the State and India for 2015-16 are:

agriculture 29.4 (India 18.25), industry 23.6 (India 31.7), services 47.0 (India 50.02). Annual

GSDP growth rate at constant prices for the State was 5.6% in 9 th Plan, 8.2% in 10th and 11th

Plans, and 10.2% envisaged in the 12th Plan.

VISION 2029 – SUNRISE STATE OF ANDHRA PRADESH

Andhra Pradesh has set for itself a target of becoming one of the top three states in India

by 2022,in-terms of socio-economic development and ease of doing business. The State

aspires to achieve the status of a developed state in the country by 2029, and the vision is

to lay the foundation for the Sunrise State of Andhra Pradesh. Achievement of this vision is

incumbent upon a fast paced and sustainable double digit growth, delivered through a

combination of programmatic and project interventions with focus on sustainable and inclusive

development.

Andhra Pradesh is poised at an interesting juncture in history as it tries to balance the

varied challenges that bifurcation has created for the residuary state, including managing

budget fiscal deficit and establishing improved governance system. Under the leadership of

the Hon’ble Chief Minister Sri Nara Chandra Babu Naidu, the Government of Andhra Pradesh

has evolved a comprehensive long term vision for bringing about the State’s socio-economic

Economic Scenario of Andhra Pradesh • BALLA APPA RAO & D. NAGAYYA


development in an accelerated and sustainable manner. The state is set to transform from the

routine, business as usual (BAU) status to a dynamic and thriving Andhra Pradesh where the

fulcrum of development is the people. The key milestones of the long term vision for the State

are as follows:

2015-16 2022-23 2029-30 2050-51

On completion of 75 years of our Best State in Leading Investment

Independence, to be amongst the the Country Destination in the World

Three High Performing States

in India

The State of Andhra Pradesh will be the best state in India by 2029-30 in achieving

inclusive growth and ranking better on happiness index; and a leading investment

destination in the World by 2050-2051

To achieve the level of development envisioned in Vision 2029, the State will have to

move from the current growth rate of 7% GSDP to a double digital growth rate of more than

10% for each upcoming year, beginning from 2015-16 (constant prices).

The Andhra Pradesh Vision 2029 envisages increasing the GSDP from the current level

of ¹ 5.33 lakh crore (2015) to approximately ¹ 41.53 lakh crore by 2029 estimated at an

achievable scenario of 16% growth rate. The Double Digit Growth Rate Strategy will enable

the economy to attain the status of a developed economy with per capita income likely to

touch ¹ 6.62 lakh by 2029-30 if the annual growth rate is consistently above 10% level, and

in the event of its crossing this threshold, the per capita income may even touch ¹ 8.00 lakh

mark. The State has the potential to reach this level through the Framework of Double Digit

Growth envisaged. The State will be pursuing a robust online monitoring and evaluation

framework in respect of key performance indicators.

The Government is conscious of the challenges ahead. And towards realizing its

vision, the Government has charted out a multi-pronged strategy. There is a need for structural

shift towards high growth trajectory and deeper and radical reforms to achieve the development

envisioned in Vision 2029. During the transition period, the government will unveil a ‘rolling

planning process’ to provide necessary momentum to the economy and a double digit growth

rate.

DOUBLE DIGIT GROWTH IN INDIA’S GDP – A FEW SNAPSHOTS

Arresting the pace of diminishing rate of productivity is identified as one of the key

components to sustain double digit growth at the National level. Economic trends underline

69

that output of the Nation could be increased annually by 7%, without risking inflation, of

which 3.5% is accountable by greater capital absorption, 2% attributable to the growing

workforce while the balance 1.5% through efficiency improvements. Making power available

to small manufacturers at affordable prices boosts competitiveness of pharmaceutical, textiles,

auto-parts makers, etc. Government reforms in these industries could push the potential

GDP’s growth to 7.8%. Stronger property rights, superior regulatory institutions and better

fiscal management are expected to push the growth by 1%. While all these measures (7.8%+1%)

in place still do not assure the 9% mark, the huge reform process of arresting the pace of

diminishing rate of productivity remains to be the key for placing the growth pedestal on the

double digit mark, and sustaining it thereafter.

ACHIEVING INCLUSIVE GROWTH – ANDHRA PRADESH

Currently the poverty level (2011-12) in Andhra Pradesh stands at 9.2%, and has witnessed

a noteworthy reduction from 45% in 1993-94. The poverty ratio for rural and urban areas of

Andhra Pradesh was 10.9% and 5%, respectively. The corresponding figures for all India

were 25.7% and 13.7%. The performance of the state in reducing the poverty has been

remarkable. The absolute number of the poor in the state declined from 19 million in 1993-

94 to 5 million in 2011-12. As per one estimate, the elasticity of poverty with respect to

GSDP for the State is 1.50 as against 0.86 for all India. Hence achieving double digit growth

will accelerate substantial reduction in poverty.

While the State of Andhra Pradesh has displayed remarkable economic performance

and succeeded in reducing the absolute poverty, inclusive and equitable growth has not been

commensurate. Further, Andhra Pradesh though faring comparatively well in many indicators

under the Millennium Development Goals (MDGs), the gains are smaller in comparison with

other southern States like Kerala and Tamil Nadu. With the MDGs reaching their deadline,

a new transformative and universal Sustainable Development Goals (SDGs) will be adopted

in the state as envisaged at the national level. Building on the MDGs, the SDGs propose to

end poverty and deprivation in all forms, leaving no one behind, while making development

economically, socially and environmentally sustainable. This presents a challenge and an

opportunity for the Government of Andhra Pradesh.

The AP State in its long term growth agenda envisages ensuring participation of all

stakeholders: and laying foundation for a rapid growth momentum through the seven missions,

five grids, five campaigns, Janmabhoomi programme and the Smart Village and Smart Ward

Programme, with measurable targets and strategies.. These are three pillars the state is building.

Figure 1 presents the details in a diagrammatic form.

The seven missions are Primary Sector Mission, Industry Sector Mission, Service

Sector Mission, Knowledge and Skill Development Mission, Social Empowerment

Mission, Urban Infrastructure Mission, and Infrastructure Mission.



The five grids, namely, Water Grid, Power Grid, Roads Grid, Gas Grid, and Optic

Fiber Grid will ensure proper service connectivity.

Five campaigns are taken up for improving sanitation, health, education, and financial

inclusion.The State departments have identified growth engines by adopting a bottom

up approach, with a focus on leveraging the lagging sectors in 2015-16 towards

stimulating growth of the economy.

Establishing the Single Desk System and various reforms introduced in the State have

facilitated the State being considered a favoured investment destination. The Department of

Industrial Policy and Promotion, Government of India, and the World Bank have ranked

Andhra Pradesh as number 2 state in the country in the Ease of Doing Business in a study

carried out by them in September 2015. In this context, it is heartening to learn that out of

the total Foreign Direct Investment inflow into the country during 2015-16, of ¹ 1,39,000

crore, Andhra Pradesh accounted for ¹ 22,000 crore (15.8%), and was ranked number one

state.

SPECIAL FINANCIAL PACKAGE ANNOUNCED BY THE CENTRE FOR ANDHRA

PRADESH ON SEPTEMBER 7, 2016

Government of India announced on September 7, 2016, a Special Financial Package i n

lieu of Special Category Status (SCS) promised for the state under the Andhra Pradesh State

Reorganisation Act 2014. This took shape after prolonged discussions between the Centre

and the State over a period of two years and three months. Following the recommendations

of the 14th Finance Commission, the class of Special Category Status ceases to exist. In view

of its inability to consider granting SCS for Andhra Pradesh, the Centre offered the Special

Package to the state which is considered equivalent if not higher in comparison to the SCS.

Government of Andhra Pradesh after extensive deliberations accepted the package, and

requested the Centre to give a statutory backing to the provisions contained in the package

through individual notifications. Details of the notification issued by the Central Board of

Direct Taxes (CBDT) under the Union Ministry of Finance are presented later. The handholding

support being extended by the Centre to Andhra Pradesh on various programmes by treating

it as a special state, is summarised here through the main areas spelt out in the announcement

and subsequent discussions.

1. Centre advancing funds through externally aided projects, which would be totally

repaid by the Centre. The externally aided projects refer to loans to be obtained from

institutions like the World Bank, Asian Development Bank, and individual governments

of a few countries.

2. Centre bearing the total cost of Polavaram multi-purpose project on river Godavari

in West Godavari district. The Centre is committed to ensuring its completion in the

fast track. The Centre declared Polavaram as a national project, and has asked the

71

state government to continue to take up works on the project as it had come forward

to execute it setting definite timelines to it.

3. The Centre has agreed to bridge the entire revenue deficit of the state that remains

after enhanced devolution of central taxes for the term of the 14 th Finance Commission

of 42% compared to 32% earlier. This provision is applicable for three states –

Andhra Pradesh, Odisha, and West Bengal.

4. Entire cost of establishing premier educational, healthcare, and other institutions in

the state as central projects will be borne by the Centre.

5. Centre will bear the entire cost of construction of the world class new capital city

for Andhra Pradesh, known as Amaravati, falling in the capital region of the state.

6. Substantial hike in the Centre’s contribution to centrally–sponsored schemes to be

implemented in the state.

7. Smart cities programme at present covers three cities in the state, namely,

Visakhapatnam, Kakinada, and Tirupati. It is planned to cover the new city of

Amaravati, when it becomes operational.

8. Special package to backward areas in identified districts- namely, seven districts, four

of Rayalaseema and three of North Coastal Andhra. This facility is being extended

to designated backward districts of Telangana also. ¹ 1,050 crore per year for seven

districts of AP, at ¹ 150 crore per district as annual grant from the Centre. Special

fiscal concessions will also be extended in these districts for accelerating

industrialisation in less developed regions.

9. Greater support for infrastructure development in the state, covering airports, sea

ports, railways, national highways, and waterways.

NOTIFICATION OF CBDT ON FISCAL INCENTIVES FOR AP IN DESIGNATED

DISTRICTS

The notification issued by the Central Board of Direct Taxes (CBDT) on 30 th September

2016 is applicable for seven less developed districts of AP – namely, four districts of

Rayalaseema – Anantapuram, Chittoor, YSR Kadapa, and Kurnool, and three North Coastal

districts – Srikakulam, Vizianagaram, and Visakhapatnam. This is a follow up of the special

financial package announced by the Centre on 7 th September 2016 for Andhra Pradesh.

Entrepreneurs can avail tax incentives under Section 32(1)(iia) and Section 32AD of the

Income Tax Act.

Any manufacturing undertaking set up between April 1, 2015 and March 31, 2020 – for

a period of five years - in the designated districts would be eligible for 15 per cent higher

additional depreciation, and 15 per cent investment allowance on the cost of plant and

machinery acquired by it. These incentives will be in addition to other tax benefits applicable

under the Income tax Act.



CONCLUSION

The progress of Andhra Pradesh in terms of growth rates of GSDP and related indicators

has been modest, and a lot more remains to be done to improve the performance in social

indicators. The current GSDP growth rate level at constant prices of 11% needs to be improved

at a faster pace to reach the level of 16% in the next few years, and further improved upon

in the subsequent years. The structural shift in labour deployment from farm to non-farm

sectors is to be accelerated, with improvement in productivity and efficiency on all fronts.

The state’s performance in reducing poverty levels over years has been remarkable. Achieving

double digit inclusive growth is to be further accelerated for improving the happiness index

of the people of the region.

The Vision 2029 for Andhra Pradesh envisages creating a conducive ecosystem on all

fronts. Priority areas are e-governance where we leverage the power of Information Technology

to lead and transform citizen services; a social empowerment that encourages rural

entrepreneurship; and fostering entrepreneurship, innovation, incubation, and inclusiveness in

all sectors of the economy. Innovativeness and technology orientation have to be given

greater encouragement.

73Economic Scenario of Andhra Pradesh • BALLA APPA RAO & D. NAGAYYA


Ta

ble

1

Are

a, P

opu

lati

on,

GS

DP

an

d P

CI

(NS

DP

) at

Cu

rren

t P

rice

s of

And

hra

Pra

des

h &

a f

ew M

ajo

r S

tate

s, a

nd

All

In

dia

, al

on

g w

ith

Ran

ks

amo

ng M

ajo

r S

tate

s

Sta

teA

rea

Ra

nk

Po

pu

la-

Ra

nk

Urb

an

i-L

itera

cy

Siz

e o

f G

SD

PG

SD

PR

ank

of

GSD

PP

CI

at

(00

0’s

qti

on

sati

on

(%)

(la

kh c

rore

)g

row

thgro

wth

ra

tes

curr

ent

pri

ces(

in)

kms)

(in

cro

re)

(%)

(2011

)ra

tes

at

(2011

)(2

011

)co

nst

an

t

pri

ces

(%)

20

14

-2

01

5-

20

13

-2

01

4-

20

15

-2

01

3-

20

14

-2

01

5-

20

14

-R

an

k2

01

5-1

6

15

16

14

15

16

14

15

16

15

12

34

56

78

91

011

12

13

14

15

16

17

18

An

dh

ra

Pra

des

h1

63

74

.96

10

29

.56

7.4

5.3

36

.03

8.5

7.9

81

0.9

92

41

95

,68

99

10

7,5

32

Tel

an

gan

a11

2.1

10

3.5

12

39

66

.35

.22

5.8

36

.43

8.8

29

.24

62

41

29

,18

26

14

3,0

23

Tam

il N

adu

13

0.1

97

.21

64

88

0.3

311

.21

Na

9.9

28

.65

na

81

31

35

,80

63

na

Kar

nat

ak

a1

91

.86

6.1

18

39

75

.89

.08

10

.23

6.9

7.7

96

.23

56

61

30

,89

75

14

5,7

99

Ker

ala

38

.91

63

.34

13

48

93

.91

5.2

Na

4.5

46

.67

na

14

9N

a1

38

,39

02

na

Mah

ara

shtr

a3

07

.73

11

.24

24

58

2.9

11

7.9

21

9.6

96

.24

5.7

68

.08

13

51

34

,08

14

na

Gu

jara

t1

96

.25

6.0

49

43

79

.31

8.9

5N

a8

.31

7.7

Na

37

Na

12

4,3

58

7n

a

All

In

dia

32

87

.51

21

.09

31

.27

3.0

12

4.8

81

35

.76

.64

7.2

47

.57

86

,87

99

3,2

31

No

tes:

1.

Ran

ks

giv

en i

n t

he

tab

le f

or

seven

sta

tes

are

in r

elat

ion

to

16

maj

or

stat

es o

f th

e co

un

try,

wit

h o

ne

cro

re a

nd

ab

ove

popu

lati

on

2.

GS

DP

: G

ross

Sta

te d

om

esti

c P

rod

uct

; G

DD

P:

Gro

ss D

istr

ict

Do

mes

tic

Pro

du

ct;

GV

A:

Gro

ss V

alue

Ad

ded

; P

CI:

Pper

cap

ita

Inco

me;

NS

DP

: N

et S

tate

Do

mes

tic

Pro

du

ct

3.G

SD

P/G

DD

P

gro

wth

ra

tes

are

calc

ula

ted

at

con

stan

t (2

011

-12

) p

rice

s;

Co

ntr

ibu

tio

n

(sh

are)

o

f se

cto

rs/

sub

-sec

tors

to

G

VA

, G

SD

P,

and

G

DD

P

is

calc

ula

ted

at

curr

ent

pri

ces

(New

bas

e 2

011

-12

). P

CI

is c

alcu

late

d a

t cu

rren

t p

rice

s.

So

urc

e fo

r ta

ble

s 1

to

7:

Go

ver

nm

ent

of

An

dh

ra P

rad

esh

, P

lan

nin

g D

epar

tmen

t, D

irec

tora

te o

f E

con

om

ics

and

Sta

tist

ics

(2016

), P

erfo

rman

ce A

pp

rais

al

and

Dis

tric

t

Eco

no

mic

S

cen

ari

o

20

15

-16

, H

yder

abad

.

75

Ta

ble

2

GV

A/G

SD

P E

stim

ates

Sec

tor-

wis

e at

Co

nst

ant

(2011

-12)

Pri

ces

for

20

13

-16

(Va

lue

in R

s. c

rore

)

An

dh

ra P

rades

hA

ll I

ndia

Sec

tor

20

13-1

4(S

RE

)2

01

4-1

5 (

FR

E)

201

5-1

6(A

E)

20

14-1

5(F

RE

)2

01

5-1

6 (

AE

)

12

34

56

Agri

cult

ure

10

920

4(1

0.7

9)

11

246

5(2

.99

)1

21

915

(8.4

0)

15

842

93

( -0

.24

)1

60

20

36

(1.1

2)

Ind

ust

ry10

0131

(3.9

1)

109

045

(8.9

0)

12117

8(1

1.1

3)

30

350

03

(5.8

8)

32

580

41

(7.3

5)

Ser

vic

es17

094

4(1

0.2

1)

190

678

(11.5

4)

212

391

(11.3

9)

51

081

95

(10

.34

)5

57

75

02

(9.1

9)

GV

A38

0280

(8.6

4)

412

188

(8.3

9)

455

484

(10

.50

)9

72

74

90

(7.1

0)

10

437

57

9(7

.30

)

Net

of

PT

– P

S316

06

325

64

381

57

82

466

09

13

38

4

GS

DP

411

886

(8.5

0)

444

752

(7.9

8)

493

641

(10

.99

)1

05

52

15

0(7

.24

)11

35

09

63

(7.5

7)

Note

s:1.

Fig

ure

s giv

en i

n p

aren

thes

es i

ndic

ate

per

cen

tag

e var

iati

on

over

th

e pre

vio

us

yea

r.

2.

Sta

ges

of

fin

alis

ing

GV

A/G

SD

P e

stim

ates

: A

E: A

dvan

ced

est

imat

es;

FR

E:

Fir

st r

evis

ed e

stim

ates

; S

RE

: se

con

d r

evis

ed e

stim

ates

; T

RE

;

Thir

d r

evis

ed e

stim

ates

3.

GV

A p

lus

Net

of

PT

min

us

PS

res

ult

s in

GS

DP.

PT

: P

roduct

tax

es,

PS

: P

rod

uct

sub

sid

ies.

4.

GS

DP

of

And

hra

Pra

des

h a

t co

nst

ant

(2011

-12)

pri

ces

in 2

01

5-1

6 (

AE

) is

est

imat

ed a

t ¹

49

3,6

41

cro

re a

s ag

ain

st 4

44

,752

cro

re o

f

20

14-1

5,

resu

ltin

g i

n a

gro

wth

of

10

.99

% (

all

Ind

ia 7

.6%

).



Ta

ble

3

GV

A a

nd G

SD

P S

ecto

r-w

ise

of

An

dh

raP

rades

h &

In

dia

at

Curr

ent

Pri

ces

(2011-1

2 b

ase

yea

r) f

or

20

11

-16

(V

alu

e in

cro

re)

An

dh

ra P

rad

esh

Ind

ia (

% s

hare

)

Sl.

No.

Sec

tor

2011

-12

201

2-1

32

01

3-1

42

01

4-1

5 (

FR

E)

20

15-1

6 (

AE

)2

01

4-1

52

01

5-1

6

12

34

56

78

1A

gri

cult

ure

947

51(2

7.1

)11

260

5(2

9.7

)1

29

633

(30.0

)1

46

803

(29.7

)1

64

08

69

(29

.4)

17

.41

7.0

2In

dust

ry111

86

7(3

2.0

)1

00

859

(26

.6)

107

715

(24.9

)1

21

506

(24.6

)1

31

64

3(2

3.6

)3

0.0

29

.7

3S

ervic

es142

963

(40

.9)

165

570

(43

.7)

194

725

(45.1

)2

25

587

(45.7

)2

61

91

7(4

7.0

)5

2.6

53

.3

4G

VA

349

581

(10

0)

379

034

(100

)4

32

073

(100

)4

93

896

(100

)5

57

64

6(1

00

)1

00

.01

00

.0

5P

rod

uct

Tax

es4

24

39

465

65

514

14

542

78

61

245

--

6P

rod

uct

sub

sidie

s1

27

90

146

38

149

93

152

52

15

515

--

7G

SD

P3

79

230

410

961

468

494

532

922

60

337

6-

-

8P

CI(

NS

DP

) (¹

)6

88

66

746

39

845

79

956

89

10

753

2-

-

Note

: F

igu

res

giv

en i

n p

aren

thes

es i

nd

icat

e p

erce

nta

ge

shar

e to

GV

A.

77

Ta

ble

4

Are

a, P

opu

lati

on,

GV

A a

t C

urr

ent

Pri

ces,

an

d i

ts g

row

th a

t co

nst

ant

Pri

ces,

an

d P

CI

at C

urr

ent

Pri

ces

of

Dis

tric

ts o

f A

nd

hra

Pra

des

h

(New

Bas

e Y

ear

20

11

-12

) fo

r 2

01

4-1

6,

alon

g w

ith

Ran

ks

SI.

No

D

istr

ict

Are

aR

ank

Po

pu

lati

on

Ra

nk

Siz

e o

fR

ank

Dis

tric

tR

an

k o

nP

CI

at

Ran

k

(in

000

’(i

n L

akh

s)G

VA

GV

A G

row

thD

ist.

GV

AC

urr

ent

Pri

ces

sq.K

ms)

(Pro

j.)

(201

5-1

6)

Ra

tes

at

Gro

wth

Ra

tes

(in)

(201

5)

(000

’Cr.

)C

on

sta

nt

Pri

ces

201

4-1

52

01

5-1

62

01

4-1

52

01

5-1

62

01

4-1

52

01

5-1

6

12

34

56

78

91

011

12

13

14

15

1K

rish

na

8.7

10

45.9

73

66.7

51

9.2

51

2.8

84

11

22

77

31

40

59

32

2V

isak

hap

atn

am11

.29

43.6

64

65.1

32

5.9

21

2.3

311

21

24

71

71

40

62

81

3E

ast

Godav

ari

12.8

75

3.7

81

57.6

63

6.3

31

0.2

19

79

24

51

10

433

67

4G

un

tur

11

.48

49.7

32

55.8

74

8.6

18

.74

61

09

91

62

10

955

65

5W

est

God

avar

i8

.511

40.6

68

50.3

25

13.3

111

.75

13

10

760

61

21

78

43

6C

hit

toor

15.2

54

2.4

75

43.8

76

8.6

211

.25

56

87

355

10

044

38

7A

nan

tapu

ram

19.1

14

1.5

36

37.9

77

12.3

27

.71

21

38

17

42

89

084

10

8P

rakas

am1

7.6

33

4.5

79

37.6

48

7.5

59

.13

89

97

104

10

770

66

9K

urn

ool

17.7

24

1.2

57

36.8

59

6.2

18

.47

10

11

79

781

88

308

11

10

SP

S N

ello

re1

3.1

63

0.1

51

03

5.8

51

08

.49

11

.77

41

03

14

011

59

28

4

11

YS

R K

adap

a1

5.4

42

9.3

311

27.5

711

11

.94

8.3

73

12

82

734

91

888

9

12

Viz

ianag

arm

6.5

12

23.8

61

32

1.1

91

25

.79

9.9

91

28

76

623

86

223

12

13

Sri

kak

ula

m5

.81

32

7.5

12

20.9

91

33

.68

11

.47

13

56

49

71

74

638

13

An

dh

ra P

rad

esh

163

504

.46

557

.65

8.3

71

0.5

95

689

10

753

2

D

istr

icts

are

arr

ang

ed i

n t

he

des

cen

din

g o

rder

of

GV

A i

n 2

015-1

6 (

AE

).

D

istr

icts

wit

h G

VA

gro

wth

rat

e ab

ove

that

of

the

Sta

te i

n 2

01

5-1

6 (

AE

) (1

0.5

0%

): K

rish

na

(12

.88

%),

Vis

akh

apat

nam

(1

2.2

3%

), W

.

God

avar

i (1

1.7

5%

), S

PS

Nel

lore

(11

.70

%),

Sri

kak

ula

m (

11

.47%

), a

nd

Ch

itto

or

(11

.25

%).



Ta

ble

5

Pop

ula

tio

n,

GD

DP,

GV

A,

and

PC

I fo

r D

istr

icts

of

An

dhra

Pra

des

h S

ecto

r-w

ise

at C

urr

ent

Pri

ces

(New

bas

e 2

011

-12

) w

ith

Ran

ks

for

20

15-1

6 (

AE

)

(in

cro

re)

SI.

No D

istr

ict

Po

pu

lati

on

Ra

nk

GD

DP

Ra

nk

GV

AA

gri

cult

ure

Indu

stri

esS

ervi

ces

Per

Ca

pit

a

(la

khs)

of

GD

DP

Sec

tor

Sec

tor

Sec

tor

Inco

me

(in 2

01

5 p

roj)

Sec

tor

Ra

nk

Sec

tor

Ran

kS

ecto

rR

an

kP

CI

inR

an

k

GV

AG

VA

GV

A

12

34

56

78

91

011

12

13

14

15

1K

rish

na

45.9

73

722

19

16

67

46

213

26

21

34

60

33

19

60

21

40

59

32

2V

isak

hap

atn

am4

3.6

64

704

70

26

51

29

800

31

02

45

32

13

25

93

11

40

62

81

3E

.Godav

ari

53.7

81

623

83

35

76

55

171

74

31

50

04

22

54

77

41

04

33

67

4G

un

tur

49.7

32

604

53

45

58

71

171

68

41

24

25

42

62

79

31

09

55

65

5W

.Godav

ari

40.6

68

544

43

55

03

17

226

97

16

47

511

2114

55

12

178

43

6C

hit

toor

42.4

75

474

64

64

38

67

109

78

811

871

52

10

18

61

00

44

38

7A

nan

thap

ura

m4

1.5

36

410

85

73

79

71

105

22

98

87

67

18

574

78

90

84

10

8P

rakas

am3

4.5

79

407

32

83

76

45

136

71

58

91

36

15

061

10

10

770

66

9K

urn

ool

41.2

57

398

76

93

68

54

125

05

66

78

69

17

563

88

83

08

11

10

SP

S N

ello

re3

0.1

51

03

87

93

10

358

53

11

521

77

75

48

16

579

911

59

28

4

11

YS

R K

adap

a2

9.3

311

298

26

11

275

66

761

311

665

51

01

32

98

11

91

888

9

12

Viz

ianag

aram

23.8

61

32

29

24

12

211

86

589

41

24

49

31

21

08

00

13

86

223

12

13

Sri

kak

ula

m2

7.5

12

227

07

13

209

86

501

51

34

40

01

311

57

11

27

46

38

13

Andh

ra P

rades

h5

04

.66

03

376

557

646

164

086

131

643

26

191

71

07

53

2

Sec

tor

% s

hare

in

rela

tio

n t

o S

tate

GV

A1

00

29.4

23.6

47

.0

Note

s :

1.

Dis

tric

ts a

re a

rran

ged

in t

he

des

cen

din

g o

rder

of

GD

DP

fo

r 20

15

-16

(A

E).

2.

Dis

tric

ts w

ith

GV

A g

row

th r

ate

abo

ve

that

of

the

stat

e in

20

15

-16 (

AE

) (1

0.5

0%

): K

rish

na

(12

.88

%),

Vis

akh

apat

nam

(1

2.2

3%

), W

.

God

avar

i (1

1.7

5%

), S

PS

Nel

lore

(11

.7%

), S

rik

akula

m (

11.4

7%

), a

nd

Ch

itto

or

(11.2

5%

).

79

Ta

ble

6

Gro

upin

g o

f D

istr

icts

of

An

dh

ra P

rad

esh

in t

erm

s o

f G

VA

Gro

wth

at

Co

nst

ant

Pri

ces,

and

its

Co

ntr

ibuti

on

to t

he

Sta

te (

Sh

are)

at

Cu

rren

t pri

ces,

Mat

rix

for

201

5-1

6 (

AE

) (N

ew b

ase

20

11

-12

)

Hig

h G

row

th &

Hig

h C

on

trib

uti

on

(>

10

%)

Hig

h G

row

th (

>1

0%

) &

Lo

w C

on

trib

uti

on

(<

10

%)

Kri

shna

G:1

2.8

8,

C :

11

.92

Wes

t G

od

avar

iG

:11

.75

, C

:8

.82

Vis

akhap

atn

amG

:12

.23

, C

:12

.03

SP

S N

ello

reG

:11

.70

, C

:6

.42

Eas

t G

odav

ari

G:1

0.2

1,

C :

10

.55

Sri

kak

ula

mG

:11

.47

, C

:3

.73

Ch

itto

or

G:1

1.2

5,

C :

7.7

8

Low

Gro

wth

(<

10

%)

& H

igh C

on

trib

uti

on (

>10

%)

Lo

w G

row

th (

<1

0%

) &

Lo

w C

on

trib

uti

on

(<

10

%)

Gun

tur

G:8

.74,

C :

10

.18

Viz

ian

agar

amG

:9.9

9,

C :

3.7

0

Pra

kas

amG

:9.1

3,

C :

6.7

3

Ku

rnoo

lG

:8.4

7,

C :

6.5

6

YS

R K

adap

aG

:8.3

7,

C :

4.8

1

An

anth

apu

ram

G:7

.71

, C

:6.7

7

G

-Gro

wth

rat

e of

dis

tric

t G

VA

(20

15

-16

(A

E)

at C

onst

ant

(20

11

-12)

Pri

ces,

C -

% C

on

trib

uti

on

(sh

are

of

GV

A o

f +

the

dis

tric

t to

th

e

Sta

te)

G

row

th r

ate

rang

es f

rom

7.7

1%

to 1

2.8

8%

am

on

g t

he

13

dis

tric

ts

C

ontr

ibuti

on r

ang

es f

rom

3.7

0%

to

12

.03%

am

ong

the

13

dis

tric

ts

K

rish

na,

Vis

akhap

atnam

, an

d E

ast

God

avar

i ar

e h

ighly

pote

nti

al d

istr

icts

.

G

un

tur

& W

est

Go

dav

ari

dis

tric

ts a

re w

ell

equip

ped

to

jo

in t

he

top 3

dis

tric

ts.

Y

SR

Kad

apa,

Anan

thap

ura

m,

Ku

rnoo

l, S

rikak

ula

m a

nd P

rakas

am d

istr

icts

are

yet

to r

eali

se t

he

full

po

ten

tial

.



Ta

ble

7

Top 3

Sec

tors

in

Dis

tric

ts o

f A

ndh

ra P

rad

esh i

n t

erm

s of

shar

e in

GV

A a

t C

urr

ent

Pri

ces

for

20

15

-16

(A

E)

(New

bas

e 2

011

-12)

(V

alu

e in

cro

re)

SI.

No

.D

istr

ict/

GV

A a

tR

an

k –

1 S

ecto

r &

its

con

trib

uti

on

Ra

nk

– 2

Sec

tor

& i

ts c

on

trib

uti

on

Ra

nk

– 3

Sec

tor

& i

ts c

on

trib

uti

on

curr

ent

pri

ces

to D

istr

ict

GV

Ato

Dis

tric

t G

VA

to D

istr

ict

GV

A

12

34

5

1S

rik

aku

lam

– 2

098

6 (

10

0)

Oth

er s

ervic

es –

2

71

5 (

12

.93)

Rea

l es

tate

& o

wn

ersh

ip o

f d

wel

lin

gs

–A

gri

cult

ure

-

22

25

(1

0.6

0)

25

13

(1

1.9

7)

2V

izia

nag

aram

– 2

11

86

(1

00

)A

gri

cult

ure

–

3

29

1 (1

5.5

3)

Oth

er s

ervic

es -

27

06

(1

2.7

7)

Man

ufa

ctu

ring

–

23

13

(1

0.9

2)

3V

isak

hap

atn

am –

65

12

9 (!

00

)M

anu

fact

uri

ng

–

1

60

05

(2

4.5

7)

Rea

l es

tate

& o

wn

ersh

ip o

f d

wel

lin

gs

–T

rade,

h

ote

ls,

and re

stau

rants

74

21

(1

1.3

)-6

905

(1

0.6

0)

4E

. G

od

avar

i –

576

55

(1

00

)A

gri

cult

ure

–

83

30

(1

4.4

)M

anu

fact

uri

ng

–

6

08

5 (1

0.5

5)

Liv

esto

ck -

55

54

(9.6

3)

5W

. G

odav

ari

– 5

03

17

(1

00

)F

ish

ing

-8

75

0

(17

.39

)A

gri

cult

ure

-

87

04

(1

7.3

0)

Tra

de,

hote

ls &

res

tau

rants

- 5

19

6 (

10.3

3)

6K

rish

na

- 6

67

46

(1

00

)F

ish

ing

- 7

88

1 (

11

.81)

Rea

l es

tate

& o

wn

ersh

ip o

f d

wel

ling

sA

gri

cult

ure

-

69

66

(1

0.4

4)

– 7

05

8 (1

0.5

7)

7G

un

tur

-55

87

1

(10

0)

Ag

ricu

ltu

re –

1

06

91

(1

9.1

4)

Tra

de,

ho

tels

& r

esta

ura

nts

-5

33

6 (

9.5

5)

Man

ufa

ctu

ring

–

526

3 (9

.42

)

8P

rakas

am –

37

64

5 (

100

)A

gri

cult

ure

–

7

25

8 (1

9.2

8)

Liv

esto

ck -

4

45

2 (

11

.82)

Co

nst

ruct

ion

-

410

3 (1

0.9

0)

9S

PS

Nel

lore

– 3

58

53

(1

00

)F

ish

ing

- 4

47

7 (

12

.49

)A

gri

cult

ure

-4

33

6

(12.0

9)

Co

nst

ruct

ion

-

34

77

(9

.70

)

10

Ch

itto

or

- 4

38

67 (

10

0)

Liv

esto

ck –

5

47

3 (1

2.4

8)

Ag

ricu

ltu

re -

4

98

1 (

11

.35)

Man

ufa

ctu

ring

–

47

65

(1

0.8

6)

11

YS

R K

adap

a– 2

75

66

(1

00

)A

gri

cult

ure

–

5

25

8 (1

9.0

7)

Oth

er s

ervic

es -

29

84

(1

0.8

2)

Co

nst

ruct

ion

-2

91

4

(10.5

7)

12

An

anth

apu

ram

–

3

79

71 (1

00)

Ag

ricu

ltu

re –

7

01

4 (1

8.4

7)

Oth

er s

ervic

es -

39

98

(1

0.5

3)

Rea

l es

tate

& o

wn

ersh

ip

of

dw

elli

ng

s – 3

569

(9.4

0)

13

Ku

rnoo

l –

36

854

(10

0)

Ag

ricu

ltu

re –

8

37

9 (2

2.7

4)

Oth

er s

ervic

es -

40

38

(1

0.9

6)

Co

nst

ruct

ion

-

35

65

(9

.67

)

An

dh

ra P

rad

esh

- 5

57

64

6 (

10

0)

Ag

ricu

ltu

re –

8

02

51

(1

4.3

9)

Rea

l es

tate

& o

wn

ersh

ip o

f d

wel

ling

sM

anu

fact

uri

ng

–

52

31

6 (9

.38)

– 5

23

94

(9

.40

)

No

te:

Fig

ure

s g

iven

in

p

aren

thes

es in

dic

ate

per

centa

ge

con

trib

uti

on

to

d

istr

ict

GV

A

81

ARTICLE / 11

PROSPECTUS FOR URBAN GROWTH INANDHRA PRADESH

M. Koteswara Rao

ABSTRACT

The Asian region has been very dynamic as revealed by the rapid and diversified levels

of urbanisation. According to the Provisional Population Results of 2011 Census, the State

of Andhra Pradesh contains 28.34 millions of urban population in 260 towns of different size-

classes, which accounts for 33.49 per cent to the total population.

The data according to 2011 Census show that the urban population is unevenly distributed

among different size-classes of towns and cities. More than 75 per cent of urban population

is concentrated in about 22 per cent of cities. In contrast to this, 26 per cent of small towns

together account for only 22.4 per cent of the total population. These results do indicate that

the distribution of urban population in Andhra Pradesh, according to 2011 Census, is high.

Therefore, it is interesting to examine the pattern of urbanisation and urban growth for the

period 1901-2011. The number of towns has almost increased three fold during this period.

In 1901, there were 115 towns and the number rose to 353 by 2011. There was only one city

till 1941, namely Hyderabad. Since, 1951, the number of cities increased and by 2011 the

number rose to 132. The group of medium towns increased by about twenty four times during

the period 1901-2011 i.e., from 11 in 1901 to 262 by 2011.

It is evident from the data that three out of 13 districts stand out prominently as highly

urbanised when compared with other districts for the period under consideration. These are

the districts of Visakhapatnam, Krishna and Guntur. The data for the earlier decades i.e.,

1961, 1971, 1981, 1991 and 2001 also confirm that these three districts have registered higher

proportions of urban population. The most important and surprising features, that is observed

in 2011 Census is that the relatively backward districts such as Chittoor, Kadapa, Kurnool an

Anantapur have highest proportion of urban population. These trends have to be studied with

detailed enquiry.

Increasing urbanisation and concentration of population are bound to be associated with

an escalation of problems in cities and towns in terms of high population density, traffic

congestion, pollution, shortage of housing, civic services and infrastructure, slums, rise in

Professor, Department of Economics, Acharya Nagarjuna University, Guntur.


urban poverty, environmental degradation etc. However, urbanisation is considered inevitable

and the problem of urbanisation can be viewed as one emanating from poor city planning,

management and finances. Comprehensive and holistic urban planning through city

development plan that mainstream sustainable habitat should be a key component. It is

important to focus attention on integrated development of urban infrastructure and services

with emphasis on provision of basic services to the urban poor including housing, water

supply, sanitation, slum improvement, community toilets etc.

THEME - III

PERFORMANCE OF AGRICULTUREAND ALLIED SECTORS IN ANDHRA PRADESH

ARTICLE / 12

PERFORMANCE OF AGRICULTURE INANDHRA PRADESH

Gita G. Pandya

ANDHRA PRADESH AGRICULTURE AT A GLANCE

Andhra Pradesh is ranked eighth among the states both in terms of share of agriculture

GDP (24.7 %) and employment generation (58.55%)as per the 61st round of National Sample

Survey (Dev, 2007). Of the total geographical area of 27 million ha in the state, 39 per cent

is net sown area with a cropping intensity of 124 per cent. The net irrigated area of the state

is 4.4 million ha, while the area under rainfed agriculture is 6.4 million ha. The state receives

an average rainfall of 940 mm. Out of the state’s 11.5 million landholdings, 61 per cent are

marginal and another 22 per cent are small.

During 2005-06 Andhra Pradesh accounted for 12.24 per cent of the country’s rice

production and stood third among the rice producing states. The state’s share in groundnut

production is to the tune of 17.32 per cent and is next only to Gujarat and Tamil Nadu. In

the production of sunflower and cotton, Andhra Pradesh stands second with shares of 30 and

18.5 per cent, respectively in the country’s production (MoA, 2007). The state ranks highest

in the country in the production of mango, chillies and turmeric. It is also ranked first in

productivity of coarse cereals like sorghum, maize and also in chickpea. Compared to the pre-

emptive position of the state in terms of contributions to the nation’s granary and in respect

of production from other agricultural crops, the growth rates of the economy are less impressive

and are in fact less than the country’s average rates. However, there are problems in the basic

elements (agricultural growth, poverty reduction, health and education, and regional disparities)

of inclusive growth. Growth of agriculture, particularly crop sector, has been very low.

CROP SECTOR

The area under rice was stagnant, except for decline during the period 2001-05. While

the area under millets (sorghum, maize, pearl millet and finger millet) declined all through

the period of study with the exception of maize, which had a significant positive growth

especially during 1990s and 2001-05. This was in tune with the national trend as reported by

Bhalla and Singh (2001) and Kubo (2006). Among the pulses, chickpea showed a significant

Principal, Govt. Arts College, KK Shatri Educational Campus, Khokhara, Mani Nagar East, Ahamadabad.


gain in area, while in oilseeds sunflower area grew significantly in the 1980s and during

2001-05. Groundnut, an important oilseed crop gained area during the 1980s, due to the fillip

provided by the Technology Mission on Oilseeds but lost area in the 1990s and 2001-05. This

was probably due to cheaper import of edible oils, as the government eased restriction on

imports.

The growth rates of yields were negative in respect of blackgram, chickpea, groundnut

and sunflower, during 1991-05. Among the commercial crops, the gain in growth rate was

the highest in chillies. There was a slowdown in yield growth during the period after 1990

in case of rice. Sorghum productivity increased at a rate of 3.94% during 2001-05 reversing

the trend in the earlier decade.

The production of rice, which is the staple crop in the state, grew at a rate of 2.5 per

cent per annum during the 1980s against the long-term growth rate of 1.56 per cent. This

growth in production was driven by the growth in productivity (1.97%). During the 1990s,

the production fell to 1.69 per cent and the productivity to 1.14 per cent. However, during

2001-05, the production trends in rice are more discouraging. The production of rice in the

state outgrew the population growth, which was about 2.17 for the 1980s, and 1.30 per cent

for the 1990s. The rate of decline in production of sorghum, pearl millet and finger millet was

highest during the 1990s. This was predominantly due to fall in the area sown to these crops.

Rapidly changing food habits in favour of fine cereals like rice and wheat (Kumar et. al,

2007) and non-inclusion of coarse cereals in the PDS are quoted as major reasons for this

drastic trend.

GROWTH BEHAVIOUR – CEREALS AND MILLETS

The growth rate of rice was negative though not significant in the state and in most of

the major growing districts. The crop lost area rapidly in Karimnagar, Krishna, Warangal and

Mahabubnagar districts during 2001-05, probably due to expansion of area under maize and

unfavourable weather during 2001-02 and 2002-03. Yield has declined to in six districts.

Production was also declining during this period in all the districts except in East Godavari

and Vizianagaram districts. The area sown to rice was either declining or stagnating in

majority of the districts. There was also a slowdown in yield growth, which was reflected the

decline in the production decline, especially during 2001-05. This had serious implications

to food security at the state level and to the PDS, as the expected levels of supply was

critically affected. A significant part of area sown to rice was under groundwater irrigation.

Two major reasons for shrinkage of area under rice are slow down or decline in the net

irrigated area and occurrence of frequent droughts. Except in the case of area under tube

wells, the growth in irrigation was negative and significant. There was a negative trend in the

net irrigated area in all the districts. The trend was significant in Anantapur, Chittoor,

Nizamabad, Medak, Mahabubnagar, Karimnagar and Rangareddy.

87

PLUSES

Chickpea, blackgram, pigeonpea and greengram are the important pulse crops in the

state. Kurnool, Prakasam and Anantapur are the major chickpea growing districts accounting

for 70 per cent of production. Prakasam district leads in productivity (1.5 t/ha). Yield declined

in all the districts especially during 2001-05. The growth rate of production was higher in

Prakasam, Kurnool and Medak, mainly driven by expansion of area. The situation with

respect to chickpea was not satisfactory during 2001-05. The yield growth in most of the

districts was either non significant or negative. The expansion in area under chickpea was

happening at the cost of rabi rice.Krishna and Guntur are the major producers of blackgram.

Area under blackgram declined since 1990. It appears that chickpea, maize and sunflower are

replacing this crop. Area sown under pigeonpea in major districts was either stagnated or

wasdeclining. Prakasam and Mahabubnagar, the two major districts, lost both on account of

area and production. Medak, East Godavari, was the leading producer of greengram. At the

state level, there was an increase in area after 2000. Productivity levels were fluctuating

around 350 kg ha -1 much below the potential. Blackgram and green gram are traditionally

grown in rice fallows in the rice growing districts. However, these pulses are not gaining in

terms of area at the state level since 1990. Recently, the area under greengram is showing the

signs of stagnation. The failure of monsoons in recent years has badly affected the canal

irrigation in districts like Nalgonda, Khammam and Guntur as a result of which the area

under green gram increased at the cost of rice. The high prices prevailing for green gram is

another reason for arresting a further declining trend. In both the cases, some districts are

growing more and more of these pulses during 2001-05 (Krishna and Srikakulam in the case

of blackgram and Guntur in the case of greengram). Increasing incidence of insect pests such

as Maruca sp. is affecting the yields of black gram and green gram. However, the situation

with respect to yield growth was not encouraging.

OILSEEDS

Groundnut is a major crop in Rayalaseema region accounting for 85 per cent of the total

area. Both the area and production tended to decline over the last 15 years though at a slower

pace with stagnation of productivity around 700 kg ha-1. The unfavorable terms of trade

especially after the 1990s due to liberalization seem to have significantly affected the crop.

Recurrentmonsoon failures and incidence of bud necrosis and stem necrosis badly affected

groundnut yields in Anantapur and other districts. Technology Mission on Oilseeds triggered

sunflower cultivation in Andhra Pradesh. The crop is confined to Kurnool, Kadapa and

Anantapur. The area and production grew in the 1980s, and then started to decline during

1990s showing increasing trends during 2001-05 despite decreasing yields. The performance

of castor crop has not been that well during the last 15 years with both area and production

declining.

Performance of Agriculture in Andhra Pradesh • GITA G. PANDYA


COMMERCIAL CROPS

The growth in area under cotton in major growing districts like Guntur was slowing

down. In rest of the districts, yield declined. The area under chillies seems to have stagnated

except in Kurnool. There was productivity gain in Guntur and Kurnooldistricts leading to

production growth. The performance of sugarcane was much better during the 1990s as there

was production growth driven by increased yield gains in most of the districts.

SUMMARY AND POLICY IMPLICATIONS

As is evident from the findings presented, the crisis in Andhra Pradesh agriculture is

wide spread across crops and districts. The situation is alarming especially with respect to

food grains. The average annual index of total factor productivity during 1995-2000 period

was five per cent less than that during the 1980s in the state. Similarly, there was absolute

decline in the contribution non-food crops during the post reform period (Rao, 2005). Significant

growth in area was observed in crops like sunflower, maize and chickpea, while productivity

gains were limited to castor and chillies. Overall production growth was seen in maize, cotton

and chillies. At the disaggregate level, chickpea performed better in Prakasam and Kurnool;

and sunflower in Kurnool and Kadapa districts. Rice is the leading food crop of the state.

However, the area under rice in Andhra Pradesh is being gradually replaced by less water

intensive crops such as chickpea, maize and sunflower as reflected in the acreage under these

crops, probably due to shrinking water resources. Though such a shift is desirable as far as

the conservation of groundwater is concerned, the large-scale transfer of area from rice

deserves more critical analysis with respect to implications to food security. System of Rice

Intensification (SRI), which is picking up of late in response to the precarious water resource

situation can be one of the alternatives to retain the primacy of the crop in the state. Pulse

crops in the state are predominantly rainfed. Besides recurrent mid-season droughts, one of

the other reasons for falling productivity levels of pulses is the non-availability of quality

seeds. Further, in pulses like chickpea, farmers in this state do not prefer to cultivate Kabuli

type varieties that have high yield potential. Another important issue that affects profitability

of chickpea is that the consumption demand within the state is relatively low compared to

pigeon pea. Therefore, appropriate and proactive marketing facilities should be developed lest

the prices fall in the season of abundance. These two pulse crops play an important role in

building up soil fertility as well as a source of protein in human diet. It is therefore necessary

to take up appropriate measures in terms of research, extension and price support for increasing

the area under pulses. It is to be noted here that the per capita availability of pulses did not

improve significantly over time. A stagnant productivity level in pulses is an area of national

concern. It is well known that the yield barriers in pulses are difficult to break when compared

to cereals. However, it is amply demonstrated that one critical irrigation besides following

measures like IPM and INM could substantially boost yields (AICRPDA, 2005). Public

investment and institutional arrangements to create infrastructure to enable these measures

89

could help increase pulse outputs and bring down imports.Among the oilseeds, performance

of groundnuts was not encouraging while sunflower was gaining ground mainly due to yield

gains coupled with profitability. Castor can gain prominence in the state if promoted with

better industry linkages.

REFERENCES

1. Ahluwalia D 1991 Growth performance in Indian agriculture. Journal of Indian School of Political

Economy 3: 605 - 632.

2. AICRPDA. 2005. District-wise Promising Technologies for Rainfed Chickpea Based Production

System in India. A Compendium by NARS, State Departments of Agriculture and Agro-Industries.

All India Coordinated Research Project for Dryland Agriculture. CRIDA, Hyderabad. P.119

3. Bhalla, G.S. and Gurmail Singh. 2001. Indian Agriculture: Four Decades of Development. Sage

Publications, New Delhi.

4. Chand, Ramesh, S.S.Raju and L.M.Pandey.2007. Growth Crisis in Agriculture: Severity and Options

at National and State Levels. Economic and Political Weekly. June, 30:pp2528-33.

5. Dayakar Rao and Shahid Parwez. 2005. Dynamics of Cropping Pattern in Sorghum Growing States

of India.Indian Journal of Agricultural Economics. 60 (4): 644-659.

6. Department of Economics and statistics 2007. Statistical abstract 2007. Government of Andhra Pradesh,

Hyderabad.

7. Fan Shenngen, Peter Hazell, T. Haque.2000. Targeting public investments by agro-ecological zone

to achieve growth and poverty alleviation goals in rural India Food Policy 25 : 411–428 413.

8. Kumar, P Mruthyunjaya, and Dey, Madan M., 2007. Long term Changes in Inidan Food Basket and

Nutrition.Economic and Political Weekly. Sep 1.:3567- 3572.

9. Narayanamoorthy, A. 2007. Deceleration in Agricultural Growth Technology Fatigue or Policy Fatigue?

Economic and Political Weekly. June 23, pp 2375-79.

10. Rao, N.C. 2004. Aggregate agricultural supply response in Andhra Pradesh. Indian Journal of

Agricultural Economics. 59(1): 91-104.

Performance of Agriculture in Andhra Pradesh • GITA G. PANDYA


ARTICLE / 13

AGRARIAN DISTRESS AND FARMERS SUICIDES INANDHRA PRADESH : A SOCIO-ECONOMIC ANALYSIS

G. Saritha & K. Madhu Babu

INTRODUCTION

Andhra Pradesh is predominantly an Agricultural economy as agriculture is the main

source of livelihood for nearly 70 percent of the population. Therefore agriculture is the most

vital and sensitive sector of the state. The changes that are occurring in this sector since the

eighties are often causing great distress to the farmers. The state agricultural sector performed

well in the eighties by recording a growth rate of 2.67 percent annum.but in the nineties the

growth rate of decelerated to 1.16 percent per annum. The declaration is caused mainly by

the slow growth of crop yields. The yields of important crops like rice, groundnut, cotton and

sugar cane were lower in the state compared to other states. The contribution of agriculture

to NSOP in the state has declined from about 40 percent in the early eighties to 31 percent

in 1999-2000. This downturn in the performance of agriculture in the state might be due to

the decline in public investments in irrigation, rural infrastructure and agricultural research.

Investment in public irrigation sources such as canals declined with nineties. As such, the

increases in the irrigated area in the nineties, at the rate of five percent per annum, is due to

well irrigation, which has become highly erratic in most areas on account of steep fall in the

water table. The occurrence of frequent droughts is compounding the problem. The decline

in the public investment has an impact on the private investment in agriculture which also

recorded a steep decline in this decade.

The factors like lower yields, rising cost of alleviation, declining prices of sever crops,

widening disparities between agricultural and non-agricultural sectors, conspicuous expenditure

on ceremonies, a mounting debt burden and dipping incomes of the cultivators are responsible

for plunging the small and marginal farmer into crises which have no other alternative expect

driven them to take the extreme steps of suicides.

The government of India identified 31 districts in the four states viz., Andhra Pradesh,

Karnataka, Kerala and Maharashtra where the incidence of farmer’s suicides were very high.

Among the identified suicide states, Andhra Pradesh (including Telengana) ranks first with.61%.

Research Scholar, Dept. of Economics, Acharya Nagarjua University, Guntur, Andhra Pradesh.Assistant Professor, Dept. of Economics, Acharya Nagarjua University, Guntur, Andhra Pradesh.

91

Suicides districts followed by Karnataka (6 Districts) Maharashtra (6 Districts) and Kerala (3

Districts). It shows the gravity of the situation prevailing in Andhra Pradesh when compared

to other parts of the country. Maximum number of suicides was reported from Ananthapur

district followed by Guntur district and there were also young farmers around 25years of age.

The main reasons as reported in the news papers were crop loss and debt burden. But to make

a comprehensive analysis of this serious problem and suggest policy measures a study of the

agrarian conditions in the affected areas and the household land information is also necessary.

Hence, the present paper has been made to examine the market imperfections and farmer’s

distress in Andhra Pradesh was taken up to following specific objectives.

OBJECTIVES

1. To make an in-depth study of the stress leading to the extreme stage in distress and

locate socio-economic components responsible for this. and

2. To offer remedial measures for the farming community and match these with the

present institutional arrangements to alleviate distress.

METHODOLOGY

The study is based on the both primary and secondary data. Secondary data drawn from

the statistical abstracts of Andhra Pradesh and season and crop reports. The identification of

the problem of farmers’ suicide in the state is also based on the secondary data, which is

compiled from newspapers and the information gathered by the A.P. Rythusangam. The

analysis of the agro-economic and social causes leading to farmer’s distress based on the

household level data was also collected. To identify the specific factors that lead the farmers

to commit suicide, a comparison was made between victims (farmers who committed suicide)

and non-victims (control basis). For collecting the primary data in Ananthapur district was

purposively selected for the study. The selection of the district is based on the highest number

of reported suicide cases. The reference period for collecting the information is the agricultural

year 2014-15.

CHANGES IN THE AGRARIAN ECONOMY OF ANDHRA PRADESH

The state of Andhra Pradesh is spread over an area of 1, 60, 20,400 sq km and it

accounts for 4.87 percent the total area of the country. It is classified into two regions viz.,

costal Andhra and Rayalaseema. Costal Andhra region is endowed with fertile alluvial soils

formed by deltas under the three rivers-Godavari, Krishna and Penna. It is served by the

southwest and northwest monsoons and enjoys highest rainfall in the state normally it receives

about 1000 mm of rain. The soils in Rayalaseema are rocky and this region suffers from

uncertain and scanty rainfall. Normally it is less than 700 mm but it has rich mineral source

and a potential for forest wealth. During the last five years period the net sown area in the

state increased only marginally i.e. from 38.23 percent to 40.96 percent in 2009-10 to 2014-

Agrarian Distress and Farmers Suicides • G. SARITHA & K. MADHU BABU


15. The forest area remained more or less the same at 22 percent, well short of the recommended

33 percent for maintaining ecological balance. There was a marginal decline in the barren and

uncultivable land, cultivable wastes permanent pastinres and other was an increase in the land

put to non agricultural uses and other follow lands including cultivable wastes. Permanent

pastries and land under miscellaneous trees and grows are used for non-agricultural purposes

rather than bringing the land under plough.

ECONOMIC AND SOCIAL REASONS FOR FARMERS’ SUICIDES

The study of the socio-economic characteristics as caste, literacy, type of family, size

of family and structure, ownership of land and other assets.etc, provide insights into the living

conditions of the farmers and help in further analysis of the determinants of distress of the

farmer’s. a farm household’s economy is generally more dependent on the crop economy.

Factor like cropping pattern, input use, production, yields, marketing infrastructure, price etc,

have substantial influence on the income of the household.

Table – 2

Socio-Economic Profile of Sample Farmers in the Selected District

S.no Sample details and characteristics Victims households Control households

1 Number of house holds 50 52

2 Forward castes (%) 30.0 34.62

3 backward castes(%) 48.0 44.62

4 Sc&ST”s (%) 20.00 21.15

5 Illiterates 26.00 25.00

6 Land details of sample house holds

a. Own land (in acres) 162.10 241.15

b. Leased-inland (in acres) 52.50 106.55

c. Leased – out (in acres) - 3.00

d. Operated land (in acres) 214.60 344.70

7 Age group 30-60 69.23 48.08

8 Family type

a. Nuclear family (percent) 74.00 59.62

b. Joint families (per cent) 26.00 40.38

c. Average family size (No of persons) 4.92 5.73

Source: Primary data

The Table-2 shows the sample households are distributed by forward castes (FCs),

Backward Castes (BCs) and Scheduled Castes and Tribes (SC, ST’s). The caste distribution

93

of the households indicates that 30 percent of the Victim’s households belong to FCs, 48.00

percent to BCs and SC&ST’s from 20.00 percent. The control households also exhibit more

or less similar distribution with 34.62 percent of FC’s, 44.62 and 21.15 percent of BC’s and

SC, ST’s respectively. We found that the suicides of farmers were not isolated to any particular

caste groups but they were found in all the caste groups. From the analysis of the type of

family it is observed that emotional and practical support from within the family might be

lower for the victims as most of them are living in nuclear families, while joint family system

was more prevalent in the control households. The levels of literacy of the farmers and their

family members are very low which act as independent for adopting following modern

methods of farming.

CROP ECONOMY : CROPPING PATTERN-PRODUCTION AND YIELDS

A farm household’s economy is generally more dependent on the crop economy. The

cropping pattern and other agricultural characteristics of the sample farmers are presented in

Table 4.

Table – 4

Agricultural Characteristics of the Sample Farmers in the Study Area

Descriptions of characteristics of the sample farmers Victims households Control households

in the study area

Cropping pattern

(%) area under paddy crop to gross cropped area 15.46 18.37

(%) area under / groundnut to area under non food crops 28.9 32.42

(%) area under / cotton to area under non food crops 7.06 5.44

(%) Total crop area 219.60 316.30

(%) net sown area 191.75 314.30

Irrigated area (%) 41.96 50.52

I. Yields of major crops

(i) Rice (kgs/ha) 2439 2464

(ii) Ground nut (kgs/ha) 317 435

(iii) Cotton 435 700

II. Cost of cultivation (Rs per hectare) 14936 15825

i. Ground nut (Rs) 9089 8633

ii. Cotton (Rs) 24747 23944


Groundnut is recorded as the major crop occupying 28.9 percent of area of the victims

and 32.42 percent of area of the control households. Ground nut is followed somewhat



closely by paddy (15.46) for the victims for the control farmers (18.37) stands in a distant

second place.

The production and yield levels of the sample farmers indicate the poor state of agriculture

as the yields are considerably lower than the district and the state average yields. Between

the suicide and control farmers, there is not much difference in the yields (groundnut (kgs/

ha) victim group 317 kgs/ha for control households is 435 kg/ha).

On the whole the cost of cultivation reported by the sample farmers is high and within

the sample farmers the victim’s households are slightly compared to control households for

ground nut, cotton, but for paddy it is higher for the control farmers.

ECONOMIC REASONS FOR FARMER’S SUICIDES

The household economy factors like household income, expenditure, assets and

outstanding loans are presented in Table-5. The table 5 reveals that per household annual

income from all sources is Rs.9922 for the victims and Rs.16928 for the control households.

Table – 5

Income & Expenditure

Item Victims Control group

I. Income from agriculture

a. Total value of output (Rs) 20408 21463

b. Total costs (Rs) 16381 16058

c. Net income (Rs) 4027 5405

II. Annual income various sources

a. Agricultures (Rs) 6177 13150

b. Dairy (Rs) 943 307

c. Other sources (Rs) 2802 3471

Total income (Rs) 9922 16928

III. Annual consumption expenditure

a. Food (Rs) 8657 10171

b. Non food (Rs) 5294 6184

c. Total (Rs) 13951 16355

IV. Outstanding Loans

a. Institutional (Rs) 15410 22765

b. Non-Institutional (Rs) 85793 61931

c. Total (Rs) 101203 84696


95

With an average family size of about five for the victims and about six for the control, the

income seems very meager. The consumption expenditure for the victims is over and above

the income for the victims. For the control farmer’s consumption expenditure is within the

limits of income. With such meager income the farmers are forced to borrow money for

various household needs and for investing in agriculture. The total value of assets owned by

the victim’s amount the Rs. 64,814 per household as against Rs. 1,06.976 of the control

households.

The farmers are investing heavily in digging wells for irrigation. With frequent crop

failures farmers were found facing problems in meeting even consumption expenditure. Non-

farm income generating activities being poor, almost all the farm households reported borrowing

money for various purposes like investing in crops, digging wells, household consumption,

health expenditure, and children’s marriage expenses especially dowries for daughters. The

socio-cultural reasons as reported by the family members indicate that many victims had

problems in the family. Addiction to alcohol is common feature for most of the victims.

Marriage of daughters also is found to be an important aspect causing distress to the individuals.

Crop loss, debt burden were reported as the major reasons for suicides by the victims.

FINDINGS OF THE STUDY

The following are the major findings of the study

Majority of the farmers committing suicides are small and marginal farmers.

Most of the victims have neglected families while the control households have more

joint families, which indicate that the emotional and practical support within the

family was found to be lower for the victims.

Wells are major source of irrigation, which are probate sources, and the farmers are

investing heavily to dig and deepen the wells. Many times the efforts of the farmers

fail leaving the farmers with the loan but not water.

Except price, the yields of ground nut, cotton and other crops are very low compared

to the average yields.

The marketing facilities as reported by the sample farmers are poor and they are

subjected to exploitation in the market.

The cost of cultivation is also found to be high particularly huge amounts spent on

pesticides in the case of cotton crop.

Crop loss, debt burden and failure of crop wells were reported as the major reasons

for suicide by the victims’ relatives.

POLICY SUGGESTIONS

The cropping pattern should be regulated based on the resource availability of the

region, especially the irrigation.



There is a need to regulate the unscrupulous activities of the private traders in the

seed market. Regulatory steps are to be strictly implemented.

It may be difficult but not impossible to ensure reasonable prices for output because

the local markets are linked to the global markets.

The state should ensure provision of cheaper credit through institutional sources and

regulate the activities of private moneylenders. The practice of input- credit tie-up

should be discouraged.

Promotion of watershed development activities through public investments through

people’s participation is necessary for capital formation.

REFERENCES

1. “White paper on Agriculture, Horticulture, Sericulture, Animal husbandry, Dairy, Fisheries and

Agricultural marketing” Government of Andhra Pradesh, Department of Agriculture, 23 July-2014.

PP. 1-46.

2. Parthasarathy & Shameen (1998), “Suicides of Cotton Famers in Andhra Pradesh: An Exploratory

study, Economic Political Weekly, 33 (13) May 28, 1998. PP-720-726.

3. Assadi, Muzaffar (1998): “Farmers Suicides: Signs of Distress in Rural Economy”. Economic &

Political Weekly, April-4-1998.

4. Revathi. E (1998): ‘Farmers Suicides: Missing Issues; Economic & political Weekly, May-1998.

5. Boss, Ashish (2000): ‘From Population to Rests in Punjab’. American Boll Worm and Suicides in

Cotton Belt; EPW, 35 (35) September-16, 2000-P-3375-3378.

6. Deshpomde R.S (2002) ‘Suicides by farmers in Karnataka: Agrarian Distress and Possible Alleviatory

Steps’. EPW, 37 (26), June 29, 2002 pp-2601-2610.

7. Annie Nirmala.K.(2003) “Market Imperfections and Farmers Distress in Andhra Pradesh” Agro-

Economic Research Centre, Andhra University. Visakhapatnam.AP.

8. Revathi. E (2009): ‘Farmers Suicides in Andhra Pradesh: Issues and Policy Concerns. “Human

Development in A.P. Experiences, Issues and Challenges”. Edited. Dev. et. al Centre for Economic

and social studies. Hyderabad.

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39


ARTICLE / 14

FACTORS RESPONSIBLE FOR AGRARIAN CRISISIN ANDHRA PRADESH

SK. Asha Begum

ABSTRACT

The existing literature on the agricultural crisis provided several factors that are directly

and indirectly responsible for the distress and disillusionment among farmers. While

Indebtedness of the farmers seems to be the major reported cause, the reasons that prompt

the farmers to borrow money from individuals rather than from institutions are varied and

differ from place to place. In this context, many studies are conducted on the livelihood and

mitigation of poverty and the consequences of dependence on agriculture with a focus on

socio-economic aspects. Area specific and in-depth studies on survival or suicides are a few

in number and time has come for researchers and academicians to conduct detailed analysis

of factors behind suicides committed by farmers in India. The farmers are greatly affected by

income vulnerability and poverty. Thus people living in agriculture on an average lag far

behind the rest of the world inhuman well-being and development indicators. A large number

of people depending on agriculture are characterized as most deprived lot. An unfortunate

consequence of the pattern of hardships faced by farm families is the growing number of

suicides among farmers in thousands, which is not prevalent in any other profession. Farmers

in many regions in the country are under the grip of economic shock. Though the economic

shock has affected entire population depending on the agriculture, its intensity is very high

in some agricultural regions. The intensity of economic crisis among farm families found to

be varied with the socio economic settings of the people depending on agriculture. Andhra

Pradesh is one of the few states where the intensity of economic crisis in agriculture is found

to be reflecting in growing number of suicides among farm families. Andhra Pradesh agriculture

is Prone to all types of disasters.

Key Words: Controlled Agro-climatic regions, Factors Responsible, agrarian economy, Agrarian

Crisis.

Research Scholar, Department of Economics, Acharya Nagarjuna University.

ARTICLE / 15

PERFORMANCE OF AGRICULTURAL SECTORIN ANDHRA PRADESH

P. Kothandarami Reddy & Koti Reddy Tamma

INTRODUCTION

Agriculture is considered as backbone of the Andhra Pradesh Economy. More than

60per cent of our total population earn their livelihood from agriculture and contributing a

major portion to Gross State Domestic Product (GSDP). In order to make agriculture viable

and profitable and to improve incomes in agriculture and allied sectors, the state has given

top priority for agriculture. In 1993-94 agriculture and allied activities contributed about 39.5

per cent to GSDP of Andhra Region. Even though the crop sector witnessed high volatility

during 1990s due to consecutive droughts and decelerating crop yields, the transformation

continued towards high value commodities such as fruits, vegetables, milk, meat, poultry and

fish. In terms of absorbing labour force and generating incomes, it has a strategic role even

in 2010s. It contributes more to distribution of workforce (of workforce & GSDP) and less

to the aggregate growth of the economy. The government is getting substantial income from

raising land revenue. Agriculture and allied sector’s contribution to Gross Value Added

(GVA) at current prices for the year 2015-16 (AE) is about 29 percent. Agriculture and allied

sector during 2015-16, is likely to record to a growth 11.77 percent at current prices (Socio

Economic Survey- 2015-16, Govt of AP).The government has launched the Primary sector

Mission to address the farm related issues like enhancing value addition from horticulture,

livestock and fisheries and shortages in storage space including cold storages. The state is

committed to transform the primary sector with an inspirational goal of making Andhra

Pradesh as one of the three top leading states in India by 2029.

The area under food grains is estimated at 41.30 lakh hectares in 2015-16 as against

39.63 lakh hectares in 2014-15 showing an increase of 4.21 per cent. The total production

of food grains in 2015-16 is estimated at 137.56 lakh tonnes while it was 160.03 lakh tonnes

in 2014-15 showing a decrease of 14.04 per cent. Wide range of agro-climatic conditions of

the state is conducive for growing a large variety of Horticultural crops, including root and

tuber crops, ornamental crops, plantation crops like coconut, cashew and cocoa etc., it

Associate Professor, UGC-Human Resource Development Centre, S.V. University, Tirupati.Professor of Economics, IBS (A Constituent of ICFAI Foundation for Higher Education) Hyderabad.


contributes about 5.6 per cent of the state GDP and is moving towards value enhancement

in addition to focus on production. The state has been divided into 736 watersheds for

estimation of ground water resources. The net ground water irrigational potential created

during 2014-15 was 11.09 lakh hectares. The state of Andhra Pradesh is allocated 512.040

TMC of Krishna waters under the existing projects and also given liberty to utilize remaining

water to the extent feasible. Andhra Pradesh has taken up 4 projects such as Telugu ganga

Project, Handri Niva Sujala Sravanthi, Galeru Nagari Sujala Srvanthi and Veligonda based

on the surplus water as per Krishna Water Dispute Tribunal and are in advanced stage of

completion.

Above all, the instability in crop production varies significantly across crops and sub-

regions in the state. In essence, the state has more heterogeneity in crop production than

homogeneity arising from its varied agro-climatic conditions.


The major objectives of the study are:

1. To study the trends in the contribution of Agriculture to GSDP and shares of districts

in Gross Value added of Agricultural sector in the residuary state of Andhra Pradesh

2. To study the relationship between net irrigated area and food& non-food crops

3. To identify the issues confronted and provide policy implications for the development

of Agricultural sector.

METHODOLOGY

The entire study is backed by secondary data only. The data is collected from the

Statistical Abstracts published by the Directorate of Economics and Statistics, Publications of

National Sample Survey Organization, Reserve Bank of India, Centre for Economic and

Social Studies and Indian Institute of Population Studies etc. Simple statistical techniques are

extensively used such as percentages, averages, index numbers and co-efficient of variation.

To study the relationship between net irrigated area and area under food and non-food crops,

Pearson’s correlation co-efficient is used.

PROGRESS OF AGRICULTURAL SECTOR IN ANDHRA PRADESH

The data in table 1 provides information about contribution of agricultural sector to

GDDP of Andhra Pradesh. Agricultural sector accounted for 39.5 per cent to the GDDP of

Andhra Pradesh in 1993-94. Since then, its contribution to GDDP declined to 27.10 per cent

in 2011-12. It clearly indicates the failure of agriculture to contribute its due share to the

GDDP as a result of unfavourable weather conditions. In the subsequent two years the

contribution of agriculture to GDDP increased slightly and again fell to 27.28 per cent in

2014-15 and 26.76 per cent in 2015-16.

101

Table – 1

Contribution of Agricultural Sector to GDDP of Andhra Pradesh

Year GDDP (Rs.crore) Contribution of

Agriculture to GDDP

1993-94** 35697 39.50

2010-11** 317599 27.30

2011-12* 349581 27.10

2012-13* 350043 28.15

2013-14* 380280 28.71

2014-15* 412188 27.28

2015-16* 455484 26.76

Source: (1) GDDP Old Series**(Economic Survey 1994-95 and 2011-12)

(2) GDDP new series*(Economic Survey 2015-16)

Table – 2

Gross Value Added of Agriculture Sector at Constant Basic Prices with 2011-12 as Base Year (Rs.Crore)

District 1993-94* 2011-12 2012-13 2013-14 2014-15

1. Srikakulam 470.52 3433 3763 3659 3311

2. Vizianagaram 460.35 3528 3868 3783 3797

3. Visakapatnam 542.52 4643 4557 4901 4986

4. East Godavari 1459.05 9697 10262 10688 11220

5. West Godavari 1524.77 12022 12903 13873 15171

6. Krishna 1492.05 11937 12673 13608 13622

7. Guntur 1834.37 12213 11297 13004 13240

8. Prakasam 1035.25 8148 8660 9909 10310

9. SPS Nellore 1020.54 6301 6406 7488 7601

10. YSR 795.07 4142 3622 4414 4938

11. Kurnool 1126.44 5879 6665 9008 9364

12. Ananthapuram 1153.50 6435 7497 7918 7919

13. Chittoor 1134.98 6374 6400 6952 6986

Andhra Pradesh 35697.00 94751 98572 109204 112465

Sources: GDDP, AP 2008 & Socio-Economic Survey 2011-1 and 2015-16, AP, *Old Series

The above table 2 provides information about Gross Vale added of Agricultural sector

at constant basic prices with 2011-12 as base year. As per Agricultural GDDP in 1993-94 at

Performance of Agricultural Sector in A.P. • P. KOTHANDARAMI REDDY & KOTI REDDY TAMMA


constant prices, Guntur stood in first position (Rs.1834.37 crores) followed by West

Godavari(Rs.1524.77 crores), Krishna (Rs.1492.05 crores) and East Godavari (Rs.1459.05

crores) districts, while bottom four positions are occupied by Srikakulam (Rs.470.52

crores),Vizianagaram (Rs.460.35 crores), Visakhapatnam (Rs. 542.52 crores) and YSR

(Rs.795.07 crores) districts. The same trend was observed in case of Gross value added of

Agricultural sector since 2011-12. As per Gross Value added of Agricultural sector at constant

basic prices in 2014-15,West Godavari stood in first position (Rs.15171 crores) followed by

Krishna (Rs.13622 crores),Guntur(Rs.13240 crores) and East Godavari (Rs.11220 crores)

Districts, while bottom four positions are occupied by Srikakulam (Rs.3311 crores),

vijayanagaram (Rs.3797 crores), YSR (Rs.4938 crores) and Visakhapatnam (Rs.4986 crores)

Districts. It is observed from the table that the agricultural development was concentrated in

South Coastal Andhra region where levels of irrigation are high (especially surface irrigation)

and rainfall is also adequate. The other two regions remain backward in terms of agricultural

development due to lack of irrigation facilities and inadequate rainfall.

Table – 3

Land Use Pattern in Andhra State: Geographical, Forest, Sown and Irrigated Area (%)

Year Geo-graphical Area Forest Area NetSown Area

1 2 3 4

1956-57 100(163) 22(35.7) 40(65.4)

1960-61 100(159) 20(32.3) 37(59.1)

1970-71 100(138) 26(35.3) 48(65.9)

1980-81 100(160) 21(34.3) 39(62.2)

1990-91 100(160) 21(33.8) 42(66.5)

2000-01 100(161) 22(34.5) 35(66.8)

2000-11 100(163) 21(33.9) 41(67.2)

2011-12 100(160) 22(34.9) 41(65.4)

2012-13 100(160.20) 21.74(34.84) 40.33(64.62)

2013-14 100(160.20) 21.80 (34.93) 40.95(65.61)

2014-15 100(162.76) 22.51(36.63) 38(62.35)

Sources: (1) 1956-57 to 2011-12: Area and land use statistics 2006, Area & Land use Statistics, Appendix Table

8.A & Statistical Abstracts. (2) 2012-13 to 2014-15: Directorate of Economics and Statistics, AP.

Note: Figures in parentheses area in lakh hectares.

As can be seen from column-2 from the above table-3 that the geographical area of

Andhra Pradesh almost remained constant at a little over 160 lakh hectares.Among various

uses, as Andhra Pradesh economy is mainly an agricultural economy, the most important use

103

of land is for cultivation i.e., Sown area. It is observed from the table that the share of sown

area remains the same during the study period. The net sown and forest area in Andhra

Pradesh show no long term trend, indicating that there is stability of land use in that state,

no land is being lost in the long run to forests or to urbanization, the gross cropped area has

grown steadily at 0.23 per cent per annum.

ISSUES CONFRONTED TO AGRICULTURAL SECTOR

SIZE OF AGRICULTURAL HOLDINGS IN ANDHRA PRADESH

In Andhra Pradesh, the size of agricultural holding is quite uneconomic, small and

fragmented. With the growth of the size of families, the agricultural holdings are gradually

being sub-divided among the heirs, in this way generation after generation the land is being

subdivided and fragmented as well. The growing sub-division and fragmentation of holding

make the adoption of modernized method in agricultural operation quite difficult. Application

of new technology, use of fertilizers and making provision for irrigation facilities will be

difficult in uneconomic holding, this results in low productivity. The following table 4 shows

the size and number of operational holding and area operated upon by these various sizes.

Table – 4

Distribution of Landholdings by Size Classes: 2010-11

Size Group No. of Percentage to Area Percentage Average size of

Holdings (Lakhs) Total (Lakh hect) (Lakh hect) holdings (hect)

Marginal 49.84 65.40 21.60 26.68 0.43

Small 15.91 20.88 22.51 27.80 1.41

Semi-medium 7.96 10.44 21.00 25.94 2.64

Medium 2.30 3.02 12.82 15.83 5.57

Large 0.20 0.26 3.04 3.75 15.20

Total 76.21 100.00 80.97 100.00 1.06

Source: Directorate of Economics and Statistics, A.P

Table 4 reveals that out of the total number of 76.21 lakh holdings, 65.40 per cent was

of marginal category, and the remaining category of holding include small category-20.88 per

cent,semi-medium-10.44 per cent, medium-3.02 per cent and large-0.20 per cent. If we take

those holding less than one hectare as uneconomic, then 65.40 per cent of holdings are to be

considered as uneconomic and the remaining 34.60 per cent of the total holding are economic.

The total area operated under marginal category was estimated at 21.60 lakh hectares (26.68

per cent) of the total area operated. The table also reveals that the average size of holding

in Andhra Pradesh was only 1.06 hectares as an 2010-11. Due to continuous sub-division and

fragmentation of holdings, average area operated per holding has been declining gradually in

the state.



RAINFALL

Agricultural productivity and thereby agricultural Gross Value Added are vulnerable to

vagaries of climate. Direct correlation between rainfall and crop yields is possible in the case

of both food and non-food crops. Agricultural productivity is vulnerable to the vagaries of

temperature and rainfall. Data related to average rainfall in Andhra region is presented in the

following table 5.

Table – 5

Annual Average Rainfall In Andhra Region (mms.)

Year Andhra Year Andhra

1956-57 1149 2005-06 744.0

1960-61 906 2008-09 1155.0

1965-66 606 2009-10 893.0

1970-71 921 2010-11 686.0

1980-81 915 2011-12 646.0

1990-91 972 2014-15 606.1

2000-01 908 2015-16 815.5


Table 5 shows average annual rainfall in Andhra region (consists of 13 districts) from

1956-57 to 2015-16. The data reveals that there is a large deviation in the amount of rainfall

recorded during the study period. During the years1965-66 and 2014-15 rainfall recoded was

lowest and while the year 2008-09 shows the highest average rainfall of 1155.0 mm over the

study period.

CROPPING INTENSITY

Cropping intensity is defined as the ratio be-tween net sown area (NSA) and gross

cropped area (GCA). The cropping intensity has direct correla-tion with assured irrigation

which enables farmers to go for multiple cropping and use higher dose of fertilizers and HYV

seeds. Hence, besides irrigation fertilisers, early maturing high yielding variety of seeds,

selective mechanization such as the use of tractors, pumping sets and seed drills, etc., plant,

protection measures through the use of insecticides, pesticides etc. do have role in affecting

the intensity of cropping.

In table 6 cropping intensity in Andhra Region for the period 1956-57 to 2014-15 is

presented. It can be observed from the table that the crop intensity is affected by changes in

net sown and gross cropped area. Both the net sown area and Gross cropped area are affected

since 1956-57 mainly by rainfall and irrigation facilities. It is also observed from the table

that the crop intensity has increased consistently from 1.14 in 1956-57 to1.31 by 2011-12.

105

Table – 6

Cropping Intensity in Andhra Region

Year Net Sown Gross Cropped Cropping Index numbers

Area(000ha) Area(000ha) Intensity of Col.3(1956-57=100)

1 2 3=2/1 4

1956-57 6539 7436 1.14 100

1960-61 5911 6798 1.15 101

1970-71 6586 7708 1.17 103

1980-81 6217 7375 1.19 104

1990-91 6649 8158 1.23 108

2000-01 6678 8361 1.25 110

2010-11 6717 8667 1.29 113

2011-12 6541 8546 1.31 115

2014-15 6235 7856 1.26 110.5

Source: 1. Agricultural Statistics at a Glance,2014-15,Directorate of Economics &Statistics, Telangana & Andhra

Pradesh. 2. Statistical Abstracts (Various years), Directorate of Economics &Statistics, Telangana & Andhra Pradesh

RELATIONSHIP BETWEEN NET IRRIGATED AREA AND FOOD & NON-FOOD

CROPS IN ANDHRA PRADESH

Pearson’s correlation co-efficient was used to empirically test the relationship between

net irrigated area and area under food crops and net irrigated area and area under non-food

crops separately. The study indicates a negative correlation between net irrigated area and

area under total food crops for the period 1956-57 to 2014-15 and positive correlation between

net irrigated area and area under non-food crops. It reveals that the proportion of area under

cultivation between food crops and non-food crops has recorded a change during the period

1956-57 to 2014-15. In recent years, there is definite shift in area from food-crops to non-

food crops in the residuary state of Andhra Pradesh. The main reasons behind this shift are;

(1) prices of non-food crops have been increasing at a very faster rate

(2) cultivation of non-food crops have become much remunerative and productive due

to the introduction of new technology in Indian agriculture and

(3) lack of sufficient irrigation facilities and drought at various points of time since 1991

have motivated the farmers to diversify their cultivation from food crops to non-food

crops.

It is observed from the table 7 that the correlation between NIA and TFC is significant

at 5% level. It shows a negative correlation between these two variables-when the area under

total food crop decreases, the other variable (net irrigated area increases).



Table – 7

Correlation between Net Irrigated Area And Area Under Total Food and Non- Food Crops from

1956-57 to 2014-15

Details of Correlation Food Crops Non-food Crops

Net Area Area under Net Area Area under

Irrigated Total Food crops Irrigated Total Food crops

NIA Pearson Correlation 1 -.317 1 .0812**

Sig. (2 tailed) *.015 .000

N 59 59 59 56

TFC Pearson Correlation -317 1 .812** 1

Sig (2-tailed) .015 .000

N 59 59 56 56

**Correlation is significant at the 0.01 level (2-tailed)

It is observed from the table 7 that the correlation between NIA and TNFC is significant

at 5% level of significance. It shows a positive and high correlation between these two

variables-as the net irrigated area is increased, the total area under non food crops production

also increased.

POLICY IMPLICATIONS & CONCLUSIONS

It was concluded that the agricultural development was concentrated in South Coastal

Andhra region where levels of irrigation are high (especially surface irrigation) and rainfall

is also adequate. To bridge the existing inequities, the immediate priority in new irrigation

schemes must be to provide resources for irrigation-deficient and low-rainfall areas which

have been neglected in the past. The study indicates a negative correlation between net

irrigated area and area under total food crops for the period 1956-57 to 2014-15 and positive

correlation between net irrigated area and area under non-food crops. There is a need to raise

farm productivity especially in the vast rain fed areas. Improved seeds can play an important

role in increasing productivity. Use of improved seeds and fertilizers requires proper irrigation

facilities. Farmers should be educated in the methods of sowing, manuring, and irrigating the

new high yielding varieties of seeds. Government has to take steps for modernizing irrigation

systems in a phased manner, efficient water management, adequate maintenance of canals and

distribution systems, surveys and investigations for preparation of new projects, developing

National Grid system to ensure water supply from water surplus areas to water-deficit areas

etc.

REFERENCES

1. Agricultural Statistics at a Glance, 2014-15, Directorate of Economics & Statistics (Telangana &

Andhra Pradesh )

107

2. B.N.Srikrishna Committee (2010): “Committee for Consultations on the Situation in Andhra Pradesh”,

Dec 2010.

3. Dholakia Bakul H and Dholakia, Ravindra H(1992): “Technical Progress in Indian Agriculture:

Temporal Analysis”, Vikalpa, Vol 17, No. 2, Apr-June, 1992.

4. Government of Andhra Pradesh (2015-16): Socio-Economic Survey, (Planning Dept.)

5. Government of Andhra Pradesh: Statistical Abstracts, various issues

6. Government of Telangana (2015): Reinventing Telangana-Socio-Economic Outlook, (Planning

Department)

7. Government of Telangana : Statistical Abstracts, various issues

8. Mohan, R. (2006), “Agricultural Credit in India: Status, Issues and Future Agenda”, Economics and

Political Weekly, March (18-24), Vol. XLI No.11, pp. 1013-1040.

9. Pandhy, K.C., Commercial Banks and Rural Development,New Delhi,Asian Publication, 1980.

10. S. Kishan Rao & Rahul A. Shastri (2014): Structure and Development of the Economies of Telangana

and AP States (1956-2014), National Akademi of Development.



ARTICLE / 16

PERFORMANCE OF AGRICULTURE WITH SPECIALREFERENCE TO UNDIVIDED ANDHRA PRADESH

Y. Venkata Rao

ABSTRACT

This paper examines Inter-regional variations in Andhra Pradesh in the growth rates of

agricultural Area, Production and the Yield changes from pre- and post- reform periods in

each region and differences between the regions etc, with a view to link them to the suicide

deaths in the State of Andhra Pradesh. The study used secondary data covering the period

before the adoption of the liberalization policy (1970-71 to 1989-90) and the period after the

adoption of the liberalization policy (1991/92 to 2008/09). The crops concerned in the study

were Rice, Maize, and Pulses. Cereals, Food grains, Cotton and Groundnuts, Oilseeds. The

study estimated the growth rates in Area, Productivity, and Production before and after the

adoption of the liberalization policy for the nine crops. Further, the study conducted a

decomposition analysis to determine the contribution of different components to the growth

rate. The results of the study showed that there were variations in growth rates of area,

production and productivity for the crops before the adoption of the liberalization policy

(1970/71 to 1989/90) as compared with after the adoption of the liberalization policy (1991/

92 to 2008/09).

Research Scholar, School of Economics, University of Hyderabad

109

ARTICLE / 17

ORGANIC FARMING IN ANDHRA PRADESH

G. Savaraiah

ABSTRACT

Organic farming is natural farming. In fact, it is the oldest form of agricultural practice.

In India, the traditional knowledge of agriculture which was essentially organic was nurtured

and groomed by millions of farmers over several hundreds of years and continued to grow

systematically without any adverse impact on soil environment. The farming till the green

revolution period was mostly without the use of modern or chemical fertilizers and pesticides.

The organic farming aim at human welfare harming the environment and follows the principles

of health, ecology, fairness and care for all including soil.

The modern concept of organic farming combines the tradition, innovation and science.

The modern farm products are more harmful to the human beings. Moreover the modern

agricultural practices lead to soil erosion and water pollution, depletion of natural resources

and destruction of delicate ecosystems and curtailing human longevity. All these things forced

the Indian farmers to adopt the natural farming i.e organic farming which provides us with

the very essence of life without any health hazards. Organic farming is gaining movement all

over the world as it offers viable alternative to the ill effects of modern agriculture. Organic

farming is practiced in more than 100 countries, and more than 31 billion hectares of area

is under organic farming in the world and the market of organic food touched $31 billion by

2005. In India, majority of the states have been promoting the e organic farming activities.

We shall discuss to emphasise the need for the organic farming, status of organic farming and

the training to be imparted to the farmers to adopt organic farming in Andhra Pradesh.

Organic farming is the need of the hour. By switching over to organic farming, the

budgetary burden to the government for providing subsidy to the chemical fertilizers will be

lessened. Besides, foreign exchange incurred on imports of chemical fertilizers etc will be

conserved and the additional financial resources can be made use for the promotion of social

welfare schemes. Further public health will be promoted and quality of life will be enhanced.

It is heartening to note that the Government of Andhra Pradesh has taken initiative and

stepping up all efforts to popularize and promote organic farming.

Professor, Department of Economics, S.V.U.College of Arts, Tirupati


The government should taken supportive measures for the local production of inputs

required for encouraging organic farming. The Government of India has been providing

subsidy for organic farming. Government of AP has been conducting training camps for

farmers and creating awareness about the organic farming methods and its benefits. Promotion

of organic farming under RKVY from 2013-14 will it is hoped to achieve good results with

proposed 130 clusters covering 725 villages and 75,000 farmers with 50,600 hectares during

2015-16.

111

ARTICLE / 18

NAVYANDHRA MARCHING TOWARDSBLUE REVOLUTION

G. Savaraiah

India is a major supplier of fish in the World. In 2006 the Country extend over 6,00,000

metric tonnes of fish to some 90 countries, earning over $51.8 billion. Shrimps are one of

the major varieties exported. Shrimp production from coastal aquaculture during 2004 stood

at approximately 1,20,000 tonnes. Farmed shrimp accounted for about 60 percent of shrimp

exported from the Country. Marine and fish water catch fishing combined with aquaculture

fish farming is a rapidly growing industry in India. In 2008, India were the sixth largest

producer of marine and fish water capture fisheries, and the second largest aquaculture

farmed fish producer in the World. Fish as food-both from fish farms and catch fisheries-

offers India one of the easiest and fastest way to address malnutrition and food security.

Andhra Pradesh stands first in total fish and prawns/shrimp production in India since

2013-14 both in terms of production and value. The state is fourth in marine fish production.

42 percent of marine exports of India registered during 2014-15. Andhra Pradesh has fertile

river basins, extensive canal system and conductive agro-climatic conditions for fishery

promotion. The state has 974 km of coastline and is one of the largest producers of marine

products. An attempt is made in this article to evaluate the performance of fisheries development

in the state of Andhra Pradesh and make the fisheries sector as one of the growth engines

for socio-economic development of the new state i.e Navyadra Pradesh.

CONTRIBUTION OF FISHERIES

Fisheries are one of the most promising subsectors of the agriculture sector. this subsector

occupies a predominant place in the socio-economic development of the state as it contributes

substantially to economic growth and income generation to lakhs of people. Sustainable

development of fisheries can only be achieved through improvement of the quality, technical

skills and management of human resource in the sector. it is a significant employment generator

and a source of nutritious food and foreign exchange earner for the state. about 1.4 million

people are directly or indirectly employed in the state in this sector with it recording faster

growth than crop and livestock sectors. Andhra Pradesh ranks first in brackish water shrimp

production, first in fresh water prawn production, second in fresh water fish production,

Professor, Department of Economics, S.V.U.College of Arts, Tirupati


second in total value of fresh water fish and produced and fourth in marine fish production.

the state contributed nearly rs.3,000 crore by way of marine exports, which is nearly 50

percent of the country’s marine exports.

DISTRICT-WISE FISHERMAN ACTIVITIES

In Andhra Pradesh the traditional fisher community people are considered as indigenous

people who are the most marginalized and disadvantaged groups. In fact, they are the vulnerable

sections. The government of Andhra Pradesh has introduced many programmes related to

capture fisheries and aquaculture and their sustainable development with particular emphasis

on improving human well-being, food security and poverty reduction Higher Productivity

knowledge transfer for sustainable fishing continued growth in fish in fish production with

increase in fish exports have the potential for increasing the living standards of Indian

fisherman. Fishing activities are attracting large number of fisherman, women and other

people. The employment potential of the fisheries reveals that lakhs of people are engaged

in fishing industry and depend on fisheries for their livelihood in various ways. Besides those

who directly catch the fish for marketing, there are equal large number of people engaged in

subsidiary industries like refrigeration, preservation, canning and in the manufacture of fish

products and by products. The particulars relating to the districts -wise fishermen activities

are shown in table-1.

The table-1 shows that large number (3.35 lakhs) of fishermen are engaged in fishing

activities followed by the marketing of fish (1.41 lakhs) and repairing/ mending of nets (0.49

lakhs). The higher number of fishermen (21.10 percent) engaged in fishing activity is found

in East Godavari district followed by S.P.S Nellore district (19.30 percent), Srikakulam

(12.45 percent) Krishna (11.03 percent) and Prakasam districts (9.41 percent) whereas the

lowest number of fishermen engaged in fishing activity is noticed in Chittoor district (0.80

percent) followed by Y.S.R district (0.48 percent), west Godavari (2.05 percent) and Kurnool

(2.09 percent). In case of fishermen engaged in marketing of fish, the highest number is

found in East Godavari (34.3 percent) followed by Srikakulam (18.6 percent) Prakasam (9.7

percent) and PSR Nellore (9.2 percent) but the lowest number is reported in Chittoor(0.05

percent) followed by (0.51 percent), Guntur (0.91 percent) Kurnool (2.45 percent) and west

Godavari (1.60 percent). The above analysis shows that generally the lowest number of

people engaged in fishing and marketing activities appeared very low incase non-coastal

districts but they found in the coastal districts like West Godavari, Guntur and Vijayanagaram

districts. The majority of the fishermen engaged in repairing/ mending the fishing nets is

found in East Godavari district (44.9 percent) followed by Guntur (18.83 percent) and PSR

Nellore district (13.66 percent) whereas the lowest number is available in Kurnool (0.33

percent) followed by YSR (0.41 percent) Srikakulam (0.46 percent) Chittoor (0.73 percent)

and Visakhapatnam (1.19 percent).

113

Table – 1

District-wise Fishermen Activities in Andhra Pradesh, 2014-15

Sl.No District No. of Fishermen engaged in Members in Type of Fishing Activity

Fishing Marketing Repairing/ Fishing Inland Marine

Activity of Fish Mending Community

of nets

(1) (2) (3) (4) (5) (6) (7) (8)

1 Srikakulam 42115 26,112 226 50,228 14,944 35,264

2 Vizianagaram 16,980 5,685 2,350 25,015 13,015 12,000

3 Visakhapatnam 26,357 9,357 582 10,823 9,803 28,779

4 East Godavari 70,316 48,281 22,035 70,316 22,500 47,816

5 West Godavari 6,863 2,254 755 27,452 22,092 1,042

6 Krishna 36,750 8,400 4,200 49,350 23,100 26,250

7 Guntur 20,119 1,282 9,234 30,635 14,874 5,245

8 Prakasam 31,370 13,600 2,240 98,400 7,170 24,200

9 S.P.S Nellore 64,323 12,950 6,700 47,972 17,819 47,972

10 Y.S.R 1,612 360 200 1,912 1,912 —-

11 Kurnool 6,978 3,450 162 10,590 10,590 —-

12 Ananthapuram 8,162 8,162 - 8,162 8,162 —-

13 Chittoor 2,663 720 360 1,320 1,320 —-

ANDHRA PRADESH 3,34,608 1,40,613 49,044 4,32,175 1,67,301 2,28,568

Source: Commissioner of Fisheries, Andhra Pradesh, Hyderabad.

The total number of population in fishing community is 6.05 lakhs in 2015 as against

4.29 lakh in 2014 engaged in fishing activities and marketing of fish in the state of Andhra

Pradesh. This analysis reveals that the large number of members in the fishing community

from the East Godavari district have involved in fishing activities and largely benefitted. The

highest number of fishermen engaged in inland fishing is found in Krishna district (13.81

percent) followed by East Godavari (13.96 percent) and West Godavari district (13.45 percent).

In case of fishermen engaged in marine fishing activities, the highest number is found in PSR

Nellore district (21.0 percent) followed by East Godavari (20.92 percent) and Srikakulam

district (15.45 percent). On the whole, the large number of fisher men has benefitted more

from the fishing sector the east Godavari, PSR Nellore and Krishna districts.

FISH PRODUCTION

Fishing industry has been showing an impressive growth during the last two decades.

Blessed with abundant marine resources spread across the coast line of coasted Andhra

Navyandhra Marching Towards Blue Revolution • G. SAVARAIAH


Pradesh is heading for a blue revolution. The fisheries of India broadly and consist of two

types- (1) marine fisheries (2) inland fisheries which include freshwater, estuarine and backwater

fisheries. Inland fisheries resources consist of two types of water- brackish and fresh. The fish

production has gone up from 3.08 lakh tones in 1995-96 to 19.79 lakh tones in 2014-15,

showing more than six-fold increase during the last two decades in Andhra Pradesh. The

details relating to the fish and prawn production in the state are shown in table-2

Table – 2

Fish Production in Andhra Pradesh 1995-96 to 2014-15

(Production in Tonnes)

Sl. No. Year Marine Fish Marine Brackish Inland Fresh Water Total

Shrimp Water Shrimp Fish Prawn

1 1995-96 130782 21208 27140 112305 16560 307995

2 1996-97 130403 21644 30377 113661 17214 313299

3 1997-98 129043 17504 31320 122495 20075 320437

4 1998-99 130123 19877 44858 139568 23103 357529

5 1999-2000 142754 23728 32269 206865 34375 439991

6 2000-01 157159 25343 37844 238781 40566 499693

7 2001-02 180761 24179 36604 289557 42906 574007

8 2002-03 211533 36762 38501 438827 49572 775195

9 2003-04 229963 33963 33339 510037 53417 860719

10 2004-05 181581 29151 32973 491625 33874 769204

11 2005-06 192067 26769 41973 517824 35554 814187

12 2006-07 207112 33599 37811 513706 49849 842078

13 2007-08 218815 36077 46885 571296 64596 937669

14 2008-09 244924 46236 26341 716864 67121 1101486

15 2009-10 246544 46606 30659 782508 51917 1158235

16 2010-11 251826 38727 43379 1055750 34130 1423812

17 2011-12 326472 52945 56179 888309 78781 1402686

19 2012-13 351585 62764 69871 1022497 81733 1588450

20 2013-14 373338 64908 88036 1139708 102793 1768783

21 2014-15 406249 69152 105162 1276817 121198 1978578

Source: Commissioner of Fisheries, Andhra Pradesh, Hyderabad

The table-2 shows that production of fish/ prawn in the state has increased constantly

from 1995-96 and registering an average annual growth rate of 9.92 percent. The marine fish

production has risen by 2.76 lakh tones in 2014-15 over 1995-96 registering more than two-

115

fold increase. But the share of marine fish production to the total fish production in A.P has

significantly declined from 42.46 percent in 1995-96 to 20.53 percent in 2014-15. Similarly

the marine shrimp production has increased more than three times but its share has been

declined to 3.50 percent in 2014-15 as against 6.89 percent in 1995-96. There is a fourfold

increase in the production of brackish water shrimp between 1995-2015. Its share has come

down from 8.81 percent to 5.32 percent during the same period. Though there is a steady and

continuous growth in the production of marine fish and shrimp, their share in the total fish

and pawn production has been considerably declined due to mechanized and organized fishing

by the foreigners and frequent storms/ cyclones. Moreover, the fisheries and aquaculture

development programmes have been taken up by the governments with a view to optimization

of production and productivity, augment of exports, generation of employment and welfare

of fisher folk communities and their socio-economic status. So that there is nineteen-fold

increase in the last twenty one years. The share of inland fish has tremendously increased

from 36.46 percent in 1995-96 to 64.53 percent in 2014-15. In case of fresh water prawn, its

share has marginally increased from 5.38 to 6.13 percent during the same period. This is

because of the large scale involvement of farmers who are driven by robust market especially

in Kolkata and North-Eastern States took up intensive pisciculture in the delta areas of the

state.

DISTRICT-WISE FISH PRODUCTION

Marine fishing is one of the oldest occupations of the villagers who are residing near

sea coasts. In fact the marine fishing provides main substance to the large number of backward

and economically weaker sections of the people. The rights of the traditional fishing

communities have been in focus in recent years in the wake of increasing commercialization

and consequent un-sustainability of marine. The particulars relating to the district-wise marine

fish and prawns production are shown in table-3.

The table-3 shows that the marine fish and prawns production has increased to 4.75 lakh

tones in 2014-15 as against 3.79 lakh tones registering an increase of 15.51 percent. The rate

o growth in the marine fish and prawns production is found in East Godavari followed by

PSR Nellore district and Visakhapatnam between 2011-12 and 2013-14. In case of percentage

increase in the production levels between 2011-12 and 2013-14, West Godavari district shows

higher growth followed Vijayanagaram, Krishna and West Godavari districts whereas the

Guntur district shows low level increase followed by Visakhapatnam and Prakasam. The

analysis reveals that though the highest production of marine fish and prawns was achieved

by East Godavari and Visakhapatnam districts they did not show higher increase between

2011-12 and 2013-14.

The state government has been encouraging inland fish and prawns production by way

of providing financial incentives. 24673 hectares of area covered with fresh water aquaculture

in the state. In Nellore district alone aqua-farmers cultivated In 14,000 hectares. The inland



Table – 3

District- Wise Marine Fish and Prawns Production

Sl.No District 2011-12 2014-15 Growth Rate (percentage)

(1) (2) (3) (4) (5)

1 Srikakulam 41,402 56,963 37.59

2 Vizianagaram 13,591 16,507 21.46

3 Visakhapatnam 79,274 97,320 22.76

4 East Godavari 81,128 1,01,729 25.39

5 West Godavari 8,190 11,805 44.14

6 Krishna 31,207 39,943 27.99

7 Guntur 30,387 38,914 28.06

8 Prakasam 22,904 29,609 29.27

9 S.P.S Nellore 71,334 82,611 15.81

ANDHRA PRADESH 3,79,417 4,75,401 25.30

Source: Commissioner of Fisheries, Andhra Pradesh, Hyderabad

Table – 4

District Wise Inland Fish and Prawns Production from 2011-12to2014-15

Sl.No District 2011-12 2014-15 Growth Rate (%)

1 Srikakulam 9,919 11,912 20.09

2 Vizianagaram 9,075 11,510 26.83

3 Visakhapatnam 14,095 15,591 10.61

4 East Godavari 41,021 46,299 12.87

5 West Godavari 3,80,836 5,69,261 49.48

6 Krishna 4,15,955 5,60,127 34.66

7 Guntur 31,009 33,707 8.70

8 Prakasam 16,627 24,974 50.20

9 S.P.S Nellore 75,612 86,340 14.19

10 Y.S.R 4,034 3,269 18.96

11 Kurnool 20,580 24,253 17.85

12 Ananthapuram 2,891 6,647 129.92

13 Chittoor 1,615 4,125 155.42

ANDHRA PRADESH 10,23,269 13,98,015 36.62


117

fish and prawns production accounted for 70.25 percent in the total fish and prawns production

if the state. The particulars relating to the district-wise inland fish and prawns production are

shown in table-4.

The table-4 shows that the highest quantity of inland fish and prawns production is

found in Krishna district followed by west Godavari (39.38 percent) and SPS Nellore district.

A sizeable quantity of production of fish and prawn is available in East Godavari district

(3.13 percent) and Guntur district (2.49 percent). In case of Rayalaseema districts except

Kurnool (1.98 percent) the production of inland fish and prawns did not even touch 0.50

percent due to the shortage of water. There is a considerable increase in the production of

fish and prawns in 2014-15 when compared with 2011-12, is found in West Godavari,

Krishna Vijayanagaram and Ananthapur districts. It is disheartening to note that there is a

drastic decline in YSR district and marginal decline in case of Visakhapatnam, West Godavari

and Guntur district during the same period.

There is a good demand for brackish water prawn in India. It has also a large export

potential through which India is earning lot of foreign exchange. The brackish water prawn

production has increased from 56179 tonnes in 2011-12 to 88,036 tonnes in 2013-14, registering

a growth of 56.71 percent growth. The particulars relating to the district-wise brackish water

prawn production are shown in table-5

Table – 5

District Wise Brackish Water Fish and Prawns Production from 2011-12to2014-15 (in Tonnes)

Sl.No District 2011-12 2014-15 Growth Rate (%)

1 Srikakulam 481 821 70.69

2 Vizianagaram 74 138 86.49

3 Visakhapatnam 1,001 3,265 226.17

4 East Godavari 6,254 11,373 81.85

5 West Godavari 18,187 31,550 73.48

6 Krishna 9,001 13,801 53.33

7 Guntur 4,056 7,594 87.23

8 Prakasam 4,785 10,301 115.28

9 S.P.S Nellore 12,340 26,319 113.28

ANDHRA PRADESH 56,179 1,05,162 87.19


The table-5 clearly reveals that the highest prawn production is found in West Godavari

and SPS Nellore districts. 12.0 percent and more than 10.00 percent of the brackish water

prawn production is available in Krishna and East Godavari districts respectively. 7 to 8



percent is achieved by the Guntur and Prakasam districts. But there is a significant increase

in the production of prawns in Guntur, Prakasam, Srikakulam, and East Godavari,

Vijayanagaram, Visakhapatnam and West Godavari districts during 2014-15 when compared

with that of 2011-12

MOVING TOWARDS BLUE REVOLUTION

The Government of Andhra Pradesh has set an ambitious target of achieving a production

of 22.67 lakh tones for 2015-16 and 26.40 lakh tones for the year 2016-17 as against the

actual production of fish and prawn of 19.79 lakh tones during the 2014-15.

The government has set a target of achieving 22.67 lakh tones valued at Rs.30,000 crore

for 2015-16 including marine, inland and brackish water cultures and by October 2015, the

production is achieved to 12.64 lakh tones, and by November 2015, the production is pegged

at 14.13 lakh tonnes worth Rs. 16,269 crore registering a growth of 26.47 percent compared

to the previous year. The report shows that 42percent of targets for marine fish production

and about 57 percent of targets for both production and earnings for fresh water fish were

achieved. The production of prawns and shrimps reached to 3.03 lakhs tones valued at

Rs.9963 crore up to October 2015. It shows that about 66 percent and 53 percent of targets

for production and earnings of prawns have achieved so far.

The industry continues to pin its hopes on fish production and set a target of achieving

a production of 26.40 lakh tones valued at Rs. 37638 crore for 2016-17. Marine fish production

accounts for 4.50 lakh tones valued at Rs.4.059 crore.The industry has a strong desire and

put a hope on inland fish production and set a target of achieving 16.00 lakh tones worth Rs.

11,808 crore. This can be achieved through encouraging fish farmers by way of proving

financial and non-financial incentives which are stated in the new fish policy. Fresh water

prawn is the emerging area which is attracted by more entrepreneur farmers. The industry set

a target of 5.90 lakh tones of production of brackish water shrimp and fresh water prawns

valued at Rs. 21,771 crore for 2016-17.

PROPOSED EARNINGS AND INVESTMENTS

The aqua industry, already a biggest revenue grosser with an estimated Rs.20,000 crore

annual earnings, is gearing up for a major leap. The New fisheries policy for Aquaculture

development aims to increase the aquaculture production in the state from Rs.22, 000 crore

in 2014-15 to Rs.35,000 by 2018-19. The Government of AP get a target raise the total

earning of Rs.37,638 crore from the fisheries sector for the year 2016-17. It is expected and

estimated to get the income of Rs.376 crore from the industry as tax at the rate 10 percent.

In order to achieve these targets, the government has to invest Rs.3671 crore. Out of this, the

share of the state government will be of Rs.1382 crore, the funds from the Central Government

will be of Rs.915 crore and the rest of the amount of RS.1326 crore will be secured from

the private sector.

119

PROMOTING THE STATE AS THE AQUA-HUB OF INDIA

The government of Andhra Pradesh has formulated plan to promote the state as the

Aqua Hub in the South Asia. The fishing industry should be developed by utilizing available

resources, providing basic inputs for the fishermen and aqua farmers and creating infrastructure

with a view to heading for a blue revolution. The planning department has put forth the

following activities to be undertaken

1. Fisheries sector identified and considered as one of the Growth Engines forsocio-

economic development of the New State.

2. The extension of fisheries cultivation in 14 thousand hectares in fresh water.

3. New fish ponds should be created in 15 thousand hectares and water supply to these

new ponds should be arranged from the reservoir/ projects on par with the irrigation

to the agriculture sector

4. Reorganization of the department of fisheries

5. Policies should be changed to bring the D.K.T patta lands, government lands under

the fish and prawn cultivation

6. Liberalize the policies in providing sanctions to make the fish ponds

7. Loan and insurance facilities should be provided to the fishermen and aqua farmers

8. Electricity supply should be given on subsidy to the fish ponds

9. Fish rearing should be encouraged in the reservoirs and small irrigated projects/

sources

10. Marketing and storage facilities should be created to the SHGs and Matsya Mitra

Groups (MMGs)

CONCLUSION

The traditional marine fishermen considered fishing activity as are of the more

remunerative occupation. The fishing activity becomes a risky and non-remunerative occupation

as the middlemen/ commission agents and moneylenders exploited the fishermen. The

intermediaries, on whom traditional fishers bank a lot to sell their catch, should be kept at

bay from them by providing an acceptable marketing mechanism. Many marine fishermen are

in debt trap due their consumption habit of alcoholic drinks proper financing mechanism

should be evolved through banks or thrift credit cooperative societies to lend loans to traditional

fishers at low/ concessional interest. The government can create confidence in the minds of

fisheries community by way of issuance of identity cards to fishers, venders and those

involved in trading. The fisheries department should develop infrastructure for landing bats

on the shore and at the markets, steps to reduce fatigue of fishers and improve the livelihood

by conducting skill development programmes and strengthen social security net. The operations



of foreign trawlers in India waters, destructive methods of fishing and encroachment of

coastal areas for non-fishing activities have not been adequately tackled by the government.

Under these conditions, the fishers could not able to get more production of fish.

REFERENCES

1. Wikipedia

2. The Hindu, 22nd, December 2015

3. Govt of AP. Social-Economic Survey- 2016-15. Planning Department P.68

4. Hans India, 13th December, 2015

5. The Hindu, 22nd, December 2015, Chennai, Edition.

6. Economic Times, 29 June 2015

7. Sakshi 2 December 2015

8. Eenadu, 29th, November 2015

9. Sakshi 2 December 2015

10. The Hindu, 9, December 2015

11. The Hindu, 29th, December 2015

121

ARTICLE / 19

EXPORT POTENTIAL OF AGRICULTURE OFANDHRA PRADESH – AN ANALYSIS

I. Narendra Kumar & K. Suneetha

In India, the agricultural development is essential to achieve overall economic progress.

Because India has a population of over one billion to feed. Over two-thirds of its national

work force directly or indirectly depends on agriculture. Agricultural sector generates 14.6

per cent of total GDP in the India economy and exports US1.14 billion in 2014-2015. The

economy is dependent on sustained agricultural growth. The agricultural sector has been

successful over the past six decades in keeping pace with rising demand for food. The country

entered into globalization and economic liberalization, which has great impact on future land

use and production patterns. This shift towards globalization may also be environmentally

desirable, as the producers will concentrate more on quality of production through cost

effectiveness. These changes have profound influence on future agricultural research and

technology dissemination to the farmers in the country.

The present day ills of agriculture and crashing prices are being attributed to World

Trade Agreement. This is due to the fact that implications and consequences of WTA are not

fully understood by many. The developed and developing countries do not have same level

field for operations. They felt that, compulsory market access and patenting of plant seeds

provisions adversely affect the food security of the people of the country. Even today, the

agricultural sector in the country is more subsistence oriented i.e., production for self-

consumption and adversely affected by vagaries of monsoons. The export potential of

agricultural output from the country should be studied from time to time, which is a dire need

because export led agricultural growth paves the way in the coming future. This facilitates

the establishment of requisite infrastructure in the country. Since Andhra Pradesh state is

endowed with diverse agro-climatic conditions and occupies a prominent place in India, the

same is considered for following the management approach to evaluate the existing situation,

exploring the export opportunities and preparation of action plans for any threats which

would ensure food security on one hand and profitability of the business on the other.

Academic Cosultant, Department of Econometrics, S.V.University, Tirupati.Assistant Professor, Department of Econometrics, S.V.University, Tirupati.


IMPORTANCE OF AGRICULTURE IN ANDHRA PRADESH

The State of Andhra Pradesh is broadly divided into two agro-climatic zones. The

Rayalseema zone, which is semi-arid and drought prone and receives around 700 mm rainfall.

The net sown area is only 38 per cent in this zone and the irrigation infrastructure is poor.

The Coastal zone has more than 1000 mm rainfall and the climate is sub-humid. The soil

salinity and floods are the limiting factors. The area under cultivation is higher, which also

has better irrigation facilities and higher productivity. Frequent cyclones, floods, drainage and

salinity are the limiting factors. The zone has 60 per cent of area under irrigation with

reasonably high cropping intensity. The salient features relating to the importance of agriculture

in the state are;

Nearly 30 per cent of the state’s GDP is from the agriculture and allied sectors.

It provides employment to 64.55 per cent of the state’s population.

The state ranks first in the production of various agricultural products in the country

in Agricultural and Agro-based industries account for 39 per cent of the total exports

from Andhra Pradesh.

The excessive dependence of food production on small sized holdings has adversely

curbed the potentialities of large scale commercialization of this sector. The agricultural

extension programmes implemented earlier laid more emphasis to cereals, rather than on

farming systems approach. The state is blessed with diverse agro-climatic zones, soils, cropping

pattern, food habits, culture and distribution of asset. However, the actual potentials have not

been fully exploited. This is mainly due to several inherent weaknesses and constraints such

as short comings in the pre and post-harvest operations and management, low productivity

of crops, lack of adequate and updated knowledge on developments taking place in the

potential and existing overseas markets, infrastructural constraints etc. Hence an effective

policy for the amelioration of the above constraints in agriculture and efficient utilization of

states own resources are essential for boosting the agricultural exports from the state. The

Government of Andhra Pradesh should restructure the existing pattern of agricultural production

and marketing so as to realize the benefits of foreign trade. It helps in estimating the marketable

surplus for different commodities, studying the possible constraints in marketing, utilization

of technology, identification of potential buyers, exporting the commodities based on price

trends in the international market etc. In the short-run, it will be useful for understanding the

market demand pattern and possibilities of meeting such demands for the available resources.

In the long run, it will form the basis for restructuring the supplies to cater to the international

demand and thereby vibrate the agro-economy of the state. These factors are,

POSITIVE POTENTIALITIES FOR EXPORTS OF AGRICULTURE PRODUCTS

Andhra Pradesh is among the top five Indian states in terms of cultivated land. Large

population mostly living in rural areas and deriving their livelihood from agriculture

and allied activities.

123

Diverse soil types which facilitate cultivation of large number of crops round the year

and climate is fairly congenial for a variety of agriculture and allied activities.

Second largest coast line in the country providing several gateways for International

trade, rich natural resources, rich livestock and good scope for marine cultivation.

Rich bio-diversity with respect to agriculture and horticultural crops and support

from the several ICAR institutes and, ICRISAT in the areas of education, extension,

research and training for the welfare of farming community.

Andhra Pradesh is one of the top five states in India in food grains production,

ranking fourth after U.P., Punjab and M.P.

Andhra Pradesh ranks third amongst the Indian states with respect to production of

Rice (12.87 million tons) contributing 13.3 per cent of India total rice production and

2.8 per cent of world rice production. In terms of rice productivity, Andhra Pradesh

ranks third in India after Tamilnadu and Punjab.

Andhra Pradesh ranks second with respect to production of Maize contributing to

13.6 per cent of India’s total production and top in terms of productivity.

Andhra Pradesh produces about 0.8 million tons of assorted pulses, Red gram, Green

gram, Black gram, Horse gram, etc.

Andhra Pradesh produces total 3.26 million tons of oilseeds ranking fourth in the

country.

Andhra Pradesh ranks third in India with respect to production of Groundnut and

accounts of 21 per cent of country’s total Groundnut production and about 6.3 per

cent of world’s production.

Andhra Pradesh ranks third with respect to production of Sunflower and accounts for

28 per cent of country’s Sunflower production.

Andhra Pradesh produces 2.5 million tonnes of Cotton, constituting 18.3 per cent of

India’s total cotton production. It is the largest producer of Tobacco in the country.

Andhra Pradesh produces 7.6 per cent of the country’s Sugarcane ranking 5 th amongst

the Indian states.

One of the largest producers of fruits and vegetables in the country.

Andhra Pradesh produces an estimated over 12 million tonnes of horticultural crops.

Andhra Pradesh occupies 1 st rank in the country, both in production and productivity

in respect of mango orange, lime and in productivity of papaya, grapes and oil palm.

The other products are banana, tomato, guava, onion, okra, sapota and cashew.

Andhra Pradesh takes top rank in the country in area under chilly production and

also large production of turmeric and coriander.

Export Potential of Agriculture • I. NARENDRA KUMAR & K. SUNEETHA


Andhra Pradesh is the 7 th largest milk producer in the country, producing about 6.8

million tonnes of milk per year, growing at 5-6 per cent per annum.

Andhra Pradesh stands second in the country in Mulberry cultivation and also Andhra

Pradesh stands second in the country in Cocoon production.

CONSTRAINTS FOR THE EXPORT OF AGRICULTURE PRODUCTS

Long coast line often results in cyclones and storms.

Relatively high percentage of illiteracy of 66 per cent compared to national average

of 48.0 of the country. And about 60 per cent of the Gross Cropped Area is under

rain fed farming.

Low irrigation infrastructure and low investment capacity of the farmers.

Lack of adequate technical manpower and infrastructure to study the implications of

WTA on the agricultural exports.

Low marketable surplus due to high domestic consumption.

Maintenance of Rural roads is poor.

Lack of proper marketing infrastructure like cold storage facilities, processing facilities,

grading facilities, market information network, advertisement etc.

PROSPECTS OF EXPORT POTENTIALITIES OF AGRICULTURE

The existing diversified agro-climatic conditions, soils and cropping pattern offers

great opportunities for producing diverse crops both for the international as well as

to domestic market.

Conducive environment for direct foreign investment in the state to build requisite

infrastructure.

The spread of Information Technology sector in the state offers great opportunities

to export the commodities by studying the price trends in the international markets.

The establishment of bio-technology industries in the state provides a greater scope

for releasing pest and disease resistant varieties and promoting quality of production

through cost effectiveness.

Location of several ICAR institutions, agricultural universities, and other institutions

facilitate exchange of expertise and materials to study the implications of WTA

relevant to the state.

Large extension network system facilitates the farmers to shift their cropping pattern

towards more profitable crops.

125

THREATS TO EXPORT POTENTIALITIES OF AGRICULTURE PRODUCTS

Erratic distribution of rainfall may adversely affect the production, droughts, floods

and cyclones of high frequency and intensity and limited scope for expansion of area

under agriculture.

Threats of extremism, absentee landlordism leads to ineffective utilization of land

and other resources.

CONCLUSIONS AND SUGGESTIONS

From the above facts, it is clear that the farmers should be motivated to take up the

agricultural and allied activities as a profit making business and to concentrate on profitability

of crops. It implies that the farmers should produce and market their produce through cost

effective technologies. To achieve this, the following suggestions are made;

Trained and skilled manpower should be provided in the fields of agricultural research,

extension and marketing.

Networking of different scientific organizations located in the state should be improved

so as to expand application of modern technology in the fields of production and

marketing.

The state is having an easy access to all parts of the country and has the 2 nd largest

coast line in the country, there is a greater opportunity to promote exports by developing

both air-cargo and ship-cargo facilities with requisite infrastructure.

The Agriculture department should conduct an extensive research for generating cost

effective technologies for agricultural production.

There is a greater need to educate the farmers to adopt new practices with more

emphasis on adopting biological control and bio-fertilizers so as to reduce the cost

and improve the quality of the agricultural production.

Bio-technology should be given special attention regarding development of high

yielding varieties with drought tolerance, pest and disease resistance and with higher

quality.

There is a greater need to invest substantially for infrastructure development such as

cold storages, grading facilities, processing facilities, market information network

etc., which will have a positive impact on export marketing.

Information should be provided on international trade, production, prices, quality

standards, seasonality, marketable surplus etc., for analyzing and disseminating

information among the producers and exporters. The export competitiveness of

agricultural commodities should also be studied from time to time so as to encourage

their exports which have more comparative advantage in the international market.

Export Potential of Agriculture • I. NARENDRA KUMAR & K. SUNEETHA


This facilitates full exploitation of market access opportunities provided by the WTA.

The expenditure incurred on export promotion activities does not go against the spirit

of WTA, because they come under the Green Box provisions.

A long term policy is essential to promote the agricultural exports on a sustainable

basis. The policy should aim at proper selection of commodities for exports based on

the needs of other countries rather than on surplus oriented commodities. The above

facts reiterate the need for adequate attention paying to overcome the possible threats

and mitigating the weaknesses for a proper and planned development of export

oriented agriculture in Andhra Pradesh. These should be carried out both from the

short-term and long-term perspective so as to carve out the states due share in the

world trade.

REFERENCES

1. Agricultural Reports, Department of Agriculture and co-operation, Ministry of Agricultural statistics,

Government of Andhra Pradesh, Hyderabad, 2014.

2. Dutt, Ruddar, Indian Economy, Chand & Company, New Delhi, 2012.

3. Naik, G. and Jain, S. K. Indian agricultural commodity futures markets: A Performance survey,

Economic and Political Weekly, 2002.

4. Qamar Hasan, Subsistence to Market economy - Possibilities of Agricultural Transformation through

Agro Export, Mittal Publications, New Delhi, 2014.

5. Shah, A. and Thomas, S. David and Goliath, Displacing a Primary Market, Journal of Global Financial

Markets, 2012.

6. Statistical Abstract of Andhra Pradesh, Government of Andhra Pradesh, Hyderabad, 2014.

7. Season and Crop Reports, Government of Andhra Pradesh, Hyderabad, 2014.

8. Economic Survey 2014, Ministry of Finance, Government of India, New Delhi.

9. United Nations Report, The Millennium Development Goals Report 2010, United Nations, New

York, 2010.

127

ARTICLE / 20

DEVELOPMENT OF HORTICULTURE SECTOR IN A.P.:AN ANALYSIS

G. Savaraiah & K. Priyanka

ABSTRACT

Over the years, horticulture has emerged as one of the potential agricultural enterprises

in accelerating security, poverty alleviation and employment generation. It offers not only a

wide range of options to the farmers for crop diversification, but also provides ample scope

for sustaining large number of agro-industries which generate huge employment opportunities.

The horticulture sector has contributed significantly to GDP in agriculture (28.5 per cent from

8.5 per cent of the area). With the increasing focus on research and development in the area

of horticulture, the production of horticulture crops has significantly increased across the

country. A golden revolution is in the offing and India has emerged as a leading player in the

global scenario.

Horticulture is the fastest growing sector within agriculture and its economic prosperity

has provoked marked changes in the life styles and consumption habits of the people.

Horticulture development was at very low ebb till the third five year plan and received

meagre attention even thereafter. Though India is the leading product and exporter of species

particularly those of chillies and turmeric, mango citrus, banana and pomegranate. Pickles

and mango pulp are the main prolapsed products that. Andhra Pradesh is one of the leading

states in producing and exporting horticultural products that are exported. The share of High

Value Commodities (HVC) in total value of agricultural output (at constant 1992-93 prices)

has increased from 29.1 per cent in Triennium ending (TE) 1982-83 to 33.1 per cent in TE

ending 2002-03 in Andhra Pradesh. An attempt is made here to review the progress made in

the horticultural development in the state of Andhra Pradesh. Horticulture is an important

segment of agriculture sector started gaining ground in the recent past and is evident from

its consistently growing contribution to the G.S.D.P. Over the years, by offering a wide range

of choices to the farmers for crop diversification and providing opportunities for sustaining

large number of agro-industries, there by promoting ample employment opportunities to semi-

skilled and unskilled labour force, horticulture has emerged as an indispensable part of

agriculture. Horticulture as a sub-sector of agriculture is showing remarkable signs of progress

in Andhra Pradesh.

Professor, Department of Economics, SVU College of Arts, TirupatiResearch Scholar, Department of Economics, SVU College of Arts, Tirupati


ARTICLE / 21

AGRICULTURAL LABOUR AND WAGE RATES INANDHRA PRADESH : AN INTER-DISTRICT ANALYSIS

Sivasankar, V & Hemanathan, S

ABSTRACT

The undivided Andhra Pradesh occupied first rank in the proportion of agricultural

labour. The Census of India reported that the proportion of cultivators had declined and the

proportion of agricultural labour had increased. According to 2011 Census, the total workforce

in bifurcated Andhra Pradesh accounted for 46.51 per cent of the total population. Among

total workers, main workers constituted 83.72 per cent while marginal workers accounted for

16.27 per cent of the total workers. The non-workers were 53.49 per cent (2, 64, 16,893).

Among the main workers, cultivators were 15.97 per cent (30, 70,723), agricultural labourer

were 44.50 per cent (85, 57,567), worked in household industry were 2.74 per cent (527857),

and other workers were 36.79 per cent(70,75,020). The present study attempts to analyse the

proportion of agricultural labour in the total inter-district workers with and also the wage rate

of these workers. The study explores wage rates of different agricultural occupations. This

paper is divided into five sections. The second section deals with the sources of data and

methodology. Third section provides an account of the proportion of agricultural labours at

district level. Fourth section presents agricultural wage rates likes’ field labour wage rate,

other agricultural labour wage rate and heads man wage rate. The final section presents

conclusion.

The proportion of agricultural workers in Andhra Pradesh was 60.47 per cent and 39.5

per cent of workers were non-agricultural workers. In the total agricultural workers 15.91 per

cent was for males and females of cultivators and 44.50 per cent was agricultural labours. The

real wage rates of agricultural workers have increased for both in all the districts. The money

wage rates have to a great extent were higher than real wage rate in all operations for both

male and female workers. In the inter-district analysis reveals that the wage disparities have

sustained and gender difference have extended in all operation and all districts of Andhra

Pradesh.

Assistant Professor, Muthurangam Government Arts College (Autonomous), Vellore, Tamil Nadu.Ph.D Research Scholar, Muthurangam Government Arts College (Autonomous), Vellore, Tamil Nadu.

129

ARTICLE / 22

ROLE OF MILLETS IN FOOD SECURITY ANDNUTRITIONAL STATUS IN ANDHRA PRADESH

B. Guna Sekhar & E. Lokanadha Reddy

INTRODUCTION

Food insecurity has been the major concern of food policy in India. The hunger and

food insecurity is the most atrocious form of deprivation in the way of fulfilment of most

basic need of every human being. Every individual has a fundamental right to be free from

hunger and have access to sufficient, safe and nutritious food and its effective utilisation for

an active and healthy life. There should be no place for hunger and food insecurity in a

democratic society. Several policies were initiated by the government from time to time to

increase food security. Public Distribution System is one of the major state policies to eradicate

food insecurity. The Public Distribution System (PDS) is a large-scale food rationing

programme, meant to increase food security at both the national and the household levels.

In Andhra Pradesh, the Public Distribution System occupied a predominant role in

distribution of essential commodities, thorough fair price shops to the public in general and

the vulnerable sections of society in particular. With this scheme PDS became rice centric

since the rice is the predominant commodity under PDS in Andhra Pradesh. Though, other

items like sugar and wheat distributed from the fair price shops, but the share of sugar and

wheat distribution is very nominal and negligible (Chapter, III).

Minor millets are nutritionally comparable or even superior to staple cereals such as rice

and wheat (Gopalan et al., 2004; Geervani and Eggum, 1989). Compared with rice, 100 g of

cooked grain of foxtail millet contains almost twice the amount of protein, finger millet over

38 times the amount of calcium, and little millet more than nine times the amount of iron

(Gopalan et al., 2004). Millets are rich in vitamins, minerals (calcium and iron in particular),

sulphur-containing amino acids and phytochemicals, and hence are often described as ‘nutritious

millets’ (Bala Ravi, 2004) or ‘nutricereals’ (Choudhury, 2009). They also contain high

proportions of non-starchy polysaccharides and dietary fibre. Their slow release of sugar on

Assistant Professor, Department of MBA, Sri Venkateswara College of Engineering and Technology(Autonomous), Andhra Pradesh.Professor of Economics, Department of MBA, Sri Venkateswara College of Engineering and Technology(Autonomous), Andhra Pradesh.


ingestion makes them ideal food for diabetic patients, whereas the lack of gluten in their

grains makes them good food for coeliac-affected people (Kang et al., 2008).

Despite their nutritional benefits, tolerance for difficult growing conditions, and ease of

storage, small millets have consistently been neglected. In this paper an attempt has made to

reveal the status of food security and nutrition status in Andhra Pradesh.

IMPLEMENTATION OF NATIONAL FOOD SECURITY ACT (NFSA), 2013

As passed by the Parliament, Government has notified the National Food Security Act,

2013 on 10th September, 2013 with the objective to provide for food and nutritional security

in human life cycle approach, by ensuring access to adequate quantity of quality food at

affordable prices to people to live a life with dignity. The Act provides for coverage of up

to 75 per cent of the rural population and up to 50% of the urban population for receiving

subsidized food grains under Targeted Public Distribution System (TPDS), thus covering

about two-thirds of the population. The eligible persons will be entitled to receive 5 Kgs of

food grains per person per month at subsidized prices of Rs. 3/2/1 per Kg for rice/wheat/

coarse grains. The existing Antyodaya Anna Yojana (AAY) households, which constitute the

poorest of the poor, will continue to receive 35 Kgs. of food grains per household per month.

The Act also has a special focus on the nutritional support to women and children.

Besides meal to pregnant women and lactating mothers during pregnancy and six months

after the child birth, such women will also be entitled to receive maternity benefit of not less

than Rs. 6,000. Children up to 14 years of age will be entitled to nutritious meals as per the

prescribed nutritional standards. In case of non-supply of entitled food grains or meals, the

beneficiaries will receive food security allowance. The Act also contains provisions for setting

up of grievance reddressal mechanism at the District and State levels. Separate provisions

have also been made in the Act for ensuring transparency and accountability.

There is a direct link between nutrition and food diversity. Malnutrition, with its two

constituents of macronutrient (protein energy malnutrition) and micronutrient deficiencies

(also known as hidden hunger), continues to be a major health burden in India. Nationally,

food price increases have affected food consumption trends. For example, the poorest

households have changed the type of cereals consumed of rice and wheat as staple cereals

due to the availability through the Public Distribution System, rather than coarse cereals such

as bajra, ragi, maize and jowar which are rich in micronutrients and minerals (Ramachandran,

2007).

NUTRITIONAL STATUS OF ANDHRA PRADESH

CHILDREN’S NUTRITIONAL STATUS

Forty-three percent of children under age five are stunted, or too short for their age,

which indicates that they have been undernourished for some time. Twelve percent are wasted,

131

or too thin for their height, which may result from inadequate recent food intake or a recent

illness. One third are underweight, which takes into account both chronic and acute under

nutrition.

Even during the first six months of life, when most babies are being breastfed, 21

percent of children are stunted, 18 percent are wasted, and 29 percent are underweight

(Stunted means low height for age, Wasted means low weight for height and Underweight

means low weight for age). Children in rural areas are somewhat more likely to be

undernourished, but even in urban areas, more than one-third (37%) of children suffer from

chronic under-nutrition. Even in the wealthiest households, 28 percent of children are stunted,

7 percent are wasted, and 16 percent are underweight. Girls and boys are about equally likely

to be undernourished.

Children’s nutritional status in Andhra Pradesh has improved slightly since NFHS-2 by

some measures but not by all measures. Children under age three years (the age group for

which nutritional status data are available in NFHS-2) are less likely to be too short for their

age today than they were seven years ago (which means that chronic under-nutrition is less

widespread).They are also less likely to be underweight, but they are slightly more likely to

be too thin for their height, which means that acute under-nutrition is still a major problem

in Andhra Pradesh.

ADULTS’ NUTRITIONAL STATUS

Adults in Andhra Pradesh suffer from a dual burden of malnutrition. In all, 34 percent

of women and 31 percent of men are too thin, but 16 percent of women and 14 percent of

men are overweight or obese. Only 51 percent of women and 56 percent of men are at a

healthy weight for their height. Under-nutrition is particularly serious among the young

(particularly those in the age group 15-19), those in the lower wealth quintiles, and scheduled

tribes.

Sixty-three percent of women in Andhra Pradesh have anaemia, including 39 percent

with mild anaemia, 21 percent with moderate anaemia, and 3 percent that have severe anaemia.

Fifty-nine percent of pregnant women and 73 percent of women who are breastfeeding are

anaemic. The prevalence of anaemia is lower among more educated women and among those

who are in the higher wealth quintiles. However, except for women in Hyderabad, at least

56 percent of women in all of the groups are anaemic (Andhra Pradesh, NFHS-3, 2008).

The National Family Health Survey 2015-16 (NFHS-4), the fourth in the NFHS series,

provides information on population, health and nutrition for India and each State / Union

territory. NFHS-4, for the first time, provides district-level estimates for many important

indicators. The anaemic condition of each district in Andhra Pradesh has shown in the

Table 3.1.

Role of Millets in Food Security • B. GUNA SEKHAR & E. LOKANADHA REDDY


Table – 3.1

District-wise Status of Anaemia among Children and Adults (in percentages) in Andhra Pradesh

Sr. No. District Anaemia among Children and Adults (in percentages)

Children Non-pregnant Pregnant All Men age

age 6 -59 age 6-59 women women 15-49

months who months who age 15-49 age 15-49 years years

are anaemic are anaemic years who who are who are

(<11.0 g/dl) (<11.0 g/dl) are anaemic anaemic anaemic

(<11.0 g/dl) (<13.0 g/dl)

Rayalaseema Districts

1. Anantapur 53.0 52.8 * 52.7 22.6

2. Chittoor 46.6 48.4 (58.8) 48.8 20.3

3. Kurnool 54.5 54.6 (51.8) 54.5 26.6

4. Y.S.R. Cuddapah 55.8 57.6 (59.4) 57.7 18.6

Coastal Andhra Pradesh Districts

5. East Godavari 63.1 64.9 (56.2) 64.6 34.3

6. Guntur 68.1 59.0 (33.6) 57.9 24.9

7. Krishna 58.1 59.7 * 59.4 22.6

8. Prakasam 56.3 57.7 (57.9) 57.7 23.4

9. Sri Potti Sriramulu Nellore 50.4 59.1 (59.2) 59.1 41.3

10. Srikakulam 70.6 72.1 * 71.8 29.3

11. Visakhapatnam 64.5 66.6 * 66.4 28.2

12. Vijianagaram 78.7 75.7 * 75.5 44.3

13. West Godavari 55.1 60.3 * 59.9 19.2

Andhra Pradesh 58.6 60.2 52.9 60.0 26.9

Source:Districts and State Fact Sheets, NFHS – 4, 2015-16

Note: ( ) Based on 25-49 unweighted cases

* Percentage not shown; based on fewer than 25 unweighted cases

NUTRITIONAL STATUS AND HEALTH BENEFITS OF MILLETS

“Millets are one of the oldest foods known to humans and possibly the first cereal grain

to be used for domestic purposes”. Millets are small-seeded grasses that are hardy and grow

well in dry zones as rain-fed crops, under marginal conditions of soil fertility and moisture.

Millets are also unique due to their short growing season. They can develop from planted

seeds to mature, ready to harvest plants in as little as 65 days. This is important in heavily

populated areas. When properly stored, whole millets will keep for two or more years

(Michaelraj and Shanmugam, 2013).

133

In the recent years concern for millets has been on the rise within Indian society and

this has, together with substantive work done in the past, yielded a considerable body of

evidence consisting of field experiences and academic literature from non-governmental and

other sources showing the existence of valid linkages between millets, poverty reduction,

malnutrition alleviation and rural development. These linkages are discussed below

MILLETS : ‘MIRACLE GRAINS’

Millets share certain common characteristics which make them socially important crops:

Millets are drought resistant and require few external inputs. They can be grown

under harsh circumstances in arid and semi-arid environments requiring less water

than many other cereals and are often able to cope with poor soils. For this they are

sometimes called ‘miracle grains’ or ‘crops of the future’.

Millets provide food and livelihood security to millions of households, in particular,

to small and marginal farmers and inhabitants of rain fed areas, especially in remote

tribal areas.

Millets are usually cultivated as dual-purpose crops providing both food grain for

human consumption and straw for animals, contributing to economic efficiency in

mixed farming systems. Millets are the staple crops in some rain fed regions.

Numerous varieties of millets exist with differentiated cultivation and taste

characteristics, including hybrids, improved varieties, and local ones. This especially

applies to local varieties which are predominantly conserved on-farm. Millets are

frequently cultivated with other millet varieties, pulses, beans, oilseeds, etc. as part

of the mixed farming system. The rich crop and varietal diversity of millet based

cropping systems foster and enrich agro-biodiversity of their ecosystems.

Millets are C4 carbon sequestrating crops contributing to the reduction of CO2 in

the atmosphere, besides being water efficient. For this they deserve to be cherished.

They may also become entitled for benefits under (international) climate change

mitigation mechanisms like Payment for Environmental Services (PES) schemes.

Paddy, on the contrary, is one of the major contributors to climate change through

methane emissions17 and wheat, a thermally sensitive crop, is vulnerable for reduction

in its cultivation range if average temperatures increase as part of climate change.

Millets have been cultivated for around 3,000 years making them an integral part of

the culture and history of India. References to millets can be found in mythology,

poetry, religious practices, ayurvedic recipes, and in numerous dishes. Millets are not

only food grains; they are still intricately interwoven in the socio-cultural fabric of

numerous regions.

Lignans, an essential phytonutrient present in millet, is very beneficial to the human

body, which act against different types of hormone-dependent cancers, like breast cancer and



also help reduce the risk of heart disease. Regular consumption of millet is very beneficial

for postmenopausal women suffering from signs of cardiovascular disease, like high blood

pressure and high cholesterol levels.

A high source of fibre, millet is very beneficial against breast cancer in postmenopausal

women. According to research and recent studies, consumption of millet can help women

combat the occurrence of gallstones, as they are a very high source of insoluble fibre.

This form of cereal grain is very high in phosphorus content, which plays a vital role

in maintaining the cell structure of the human body. The key role of this mineral is that it

helps in the formation of the mineral matrix of the bone and is also an essential component

of ATP (adenosine tri-phosphate), which is the energy currency of the body.

A single cup of millet provides around 24.0% of the body’s daily phosphorus requirement.

This mineral is a very important constituent of nucleic acids, which are the building blocks

of genetic code.

Recent research has indicated that the regular consumption of millet is associated with

reduced risk of type 2 diabetes mellitus. This is mainly due to the fact that whole grains like

millet are a rich source of magnesium, which acts as a co-factor in a number of enzymatic

reactions in the body, regulating the secretion of glucose and insulin.

Magnesium is also beneficial in reducing the frequency of migraine attacks. It is even

very useful for people who are suffering from atherosclerosis and diabetic heart disease. The

nutrition statues has compared with rice in the Table - 4.1.

Table – 4.1

Comparison Chart of Nutrition Levels in Millets with Rice

Millet Type Ca Fe Thiamin Ribo- Niacin Protein Fat (g) Ash (g) Crude Carbs (g) Energy

(mg) (mg) (mg) flavin (mg) (g) fibre (kcal)

(mg) (vitamin (NX (g)

B3) 6.25)

Finger Millet (or)Ragi 350 3.9 0.42 0.19 1.1 7.7 1.5 2.6 3.6 72.6 336

Pearl Millet (or) Bajra 42 11 0.38 0.21 2.8 11.8 4.8 2.2 2.3 67 363

Sorghum (or) Jowar 25 5.4 0.38 0.21 2.8 10.4 3.1 1.6 2 70.7 329

Maize 26 2.7 0.38 0.2 3.6 9.2 4.6 1.2 2.8 73 358

Rice (brown) 33 1.8 0.41 0.04 4.3 7.9 2.7 1.3 1 76 362

Source: Das Pranati, 2008.

CONCLUSION

The most of the Rayalaseema districts have shown better condition in anaemia among

children and adults with that of coastal districts of Andhra Pradesh. Both Vijianagaram and

135

Srikakulam districts are high anaemia among children, women and adults. To overcome the

anaemia conditions, the government and non-government organizations can encourage the

people to consume more finger and pearl millets which account 350 mg of calcium and 11mg

of iron respectively. Comparing with rice, millets are rich in nutrients and micronutrients.

Hence, usage of millets may arrest the malnutrition condition in Andhra Pradesh.

REFERENCES

1. Andhra Pradesh NFHS-3 (2008), National Family Health Survey (NFHS-3), India, 2005-06, Andhra

Pradesh.

2. Das Pranati (2008), ‘Millets for Scientific Research and Food’, Principal Scientist, Department of

Food & Nutrition, Assam Agricultural University, Jorhat.

3. DHAN Foundation (2012), ‘Supporting Millets in India: Policy Review and Suggestions for Action’,

Revalorising Small Millets in Rainfed Regions of South Asia (RESMISA).

4. Districts and State Fact Sheets, NFHS – 4 (2015-16), Ministry of Health and Family Welfare,

Government of India.

5. Michaelraj Stanly Joseph P. and Shanmugam A. (2013), ‘A Study on Millets based Cultivation and

Consumption in India’, International Journal of Marketing, Financial Services & Management Research,

Vol.2, No. 4.

6. Ramachandran P (2007) Nutrition Transition in India 1947-2007, New Delhi: Nutrition Foundation

of India.



ARTICLE / 23

AGRICULTURAL CREDIT FLOW IN ANDHRAPRADESH : ACTION PLAN AND STRATEGIES

Subhendu Dutta & C.S. Shylajan

INTRODUCTION

Credit is a catalyst that helps to accelerate the farm and non-farm sector development

of an economy. Investments in farm can generate farm income sustainably when credit is

adequately supported by backward and forward linkages, viz. inputs of production, technology

and services.

“Credit is often a key element in the modernization of agriculture. Not only can

credit remove financial constraint but it also accelerates the adoption of new

technology. Credit facilities are also an integral part of the process of

commercialization of the rural economy. However, no amount of credit even at the

most reasonable rates can guarantee higher productivity or income among the rural

poor, as the success depends upon many factors including the availability of inputs

and services, sound credit policies, well-managed institutions and appropriate delivery

channels” (The World Bank, 1975).

The credit flow to agriculture, more importantly after introduction of financial sector

reforms in early-nineties, increased from Rs. 2,85,146 crore during the 9th Plan [1997-2002]

to Rs.6,91,739 crore [243%] during the 10th Plan [2002-07]. Credit disbursement during the

11th Plan [2007-12] further increased to Rs.19, 20,400 crore [277%]. As against annual

average disbursement of Rs. 57,029 crore, Rs.1,38,348 crore and Rs.3,84,080 crore during

previous three plans the disbursement during 2012-13 alone was Rs. 6,07,375 crore, exhibiting

significantly high growth of credit year after year. However, studies have brought up some

issues related to flow of agricultural credit in India. First, improvement of crop productivity

and output has been not so satisfactory; second, there has been a significant disparity in the

flow of credit among States; third, there are significant imbalance between short-term and

term loans and also between credit disbursed to agriculture and allied activities; and fourth,

institutional credit is not easy to access by small, marginal and tenant farmers.

IBS, Hyderabad, IFHE (Deemed to be University), Hyderabad.IBS, Hyderabad, IFHE (Deemed to be University), Hyderabad

137

The present paper evaluates the status relating to agricultural credit flow in Andhra

Pradesh. Next section deals with an overview of credit flow in India. Section 3 deals with

the present.

AGRICULTURAL CREDIT FLOW : STATUS AND ACTION PLAN BY THE

GOVERNMENT IN ANDHRA PRADESH

The Annual Credit Plan 2013-14 and 2015-16 for the State was Rs.47016.95 crore and

Rs. 65,272 crore respectively towards Agriculture Credit. In 2013-14, Rs.49974.46 crore

(105%) was disbursed whereas in 2015-16, it was Rs.40, 258.45 crore (62%) under Agricultural

credit which is lower by 43%. In 2013-14, an amount of Rs. 37058.08 crore was disbursed

under crop loans as against the target of Rs. 35548.65 crore (104.25%) and an amount of Rs.

12716.38 crore disbursed as against the target of Rs.11468.30 crore (110.88%) under Agriculture

Term Loans including Allied activities. And in 2015-16, an amount of Rs.31,978.82 crore

(67%) was disbursed under crop loans (short term loans) as against the target of Rs. 48,066

crore and an amount of Rs.8279.63 (48%) crore was disbursed as against the target of

Rs.17205 crore under Agriculture term loans including allied activities. Interest free Crop

loans to all farmers up to Rs.1.00 lakh and Pavala Vaddi for crop loans ranging from Rs. 1.00

lakh to 3.00 Lakh, if repaid in time. Beginning with Rabi season of 2011 in Nov, 2011. an

amount of Rs. 280 crores was released under the Vaddi Leni Runalu and an amount of Rs.

222.90 crores was settled with 22.50 lakh farmers. The Annual Credit Plan 2014-15 for the

State was Rs.56019 crore towards Agriculture Credit. Rs.39938 crore (71%) was disbursed

under Agricultural credit. An amount of Rs. 29658 crore (71%) was disbursed under crop

loans as against the target of Rs. 41977 crore and an amount of Rs.10280 (73%) crore

disbursed as against the target of Rs.14041 crore under agriculture term loans including allied

activities (see Table 2).

To facilitate financing land licensed cultivators (tenant farmers), the Government passed

an act- “Andhra Pradesh land licensed cultivators Act No 18 of 2011’’ so that land licensed

cultivators (tenant farmers) get loan and other benefits. During 2014-15, Loan Eligibility

Cards (LECs) were issued to 3, 39,214 (Fresh & Renewal) Land licensed cultivators by the

Revenue department. Amounts of Rs. 85.39 crore have been issued under Crop loans 39,403

LEC holders. During 2015-16, the Revenue Department has issued Loan Eligibility Cards

(LECs) to 4, 55,914 (Fresh: 1, 88,318 and Renewal: 2, 67,596) Land Licensed cultivators

(Tenant farmers) in the state. An amount of Rs.146.88 crore has been given to 70,013 LEC

holders so far. District-wise details of loan eligibility cards and sanctioned amounts are given

in Table 3.

To mitigate the financial burden of the farmers, the Government has announced “Rythu

Sri” (vaddileni panta runalu/pavala vaddi) scheme and has announced the Interest free crop

loans to all the farmers up to Rs. 1.00 lakh and pavala vaddi for crop loans from Rs.1.00 lakh

to Rs. 3.00 lakhs if repaid in time (maximum period of one year). During 2014-15, an amount

Agriculture Credit Flow in Andhra Pradesh • SUBHENDU DUTTA & C.S. SHYLAJAN


of Rs.44.31 crore was settled under vaddileni runalu and Rs. 1.02 crore was settled under

pavala vaddi. During 2015-16, an amount of Rs.156.80 crore was released under the vaddileni

runalu as against the allocation of Rs.172.00 crore. An amount of Rs.9.50 crore was released

under the pavala vaddi as against the allocation of Rs.10.00 crore. An amount of Rs.527.65

crore have been settled to 0.74 lakh farmers accounts (as on Sept. 2015) under vaddi leni

runalu and Rs.10.40 lakh have been settled to 0.02 lakh farmers’ accounts under pavala vaddi,

and the settlement of claims is under progress.

Table – 2

Disbursement of Agriculture Credit as on 30th September 2015

(Amount in Rs Crore.)

Sl.No District Short term Agricultural term Total Agriculture % of

production loans loans including loans Achievement

Infrastructure and disbursed

Ancillary Activities

1 Srikakulam 1171.22 329.89 1501.11 49.96

2 Vizianagaram 973.97 176.96 1150.93 56.03

3 Visakhapatanm 1293.04 643.01 1936.05 88.41

4 East Godavari 3855.86 1089.48 4945.34 56.44

5 West Godavari 4222.03 1116.48 5338.51 61.54

6 Krishna 2230.27 788.98 3019.25 49.68

7 Guntur 4740.06 923.76 5663.82 62.73

8 Prakasam 2232.12 692.93 2925.05 64.57

9 SPS Nellore 1498.58 634.05 2132.63 55.46

10 Y.S.R 1844.60 502.02 2346.62 62.86

11 Kurnool 2246.38 416.82 2663.20 58.83

12 Ananthapuramu 3386.10 499.74 3885.84 89.13

13 Chittoor 2284.59 465.51 2750.10 61.32

Total 31978.82 8279.63 40258.45 61.68

Source: Finance (Institutional Finance) Department

Under ‘Agricultural Debt Redemption Scheme’, an amount of Rs.7,433 crores has been

released in all the districts in 3 phases and the number of accounts redeemed is 54.06 lakh

accounts. A total no. of 35.15 lakh farmer families were benefitted under this programme. To

facilitate the reddressal of the grievances of the farmers who have not received the benefit

due to errors, mistakes committed by the Banks, data entry errors etc., the grievance reddressal

cells have been constituted at State/ District/Revenue division level. In the month of September

2015, “Rythukosam Chandranna” programmes were conducted successfully in all the

139

districts.During the programme wide publicity was given on Debt Redemption and exhibited

stalls of agriculture and allied sectors to impart knowledge of advanced technology to the

farmers. The farmer interaction programmes with the resource persons were also organized.

The details of agricultural credit disbursed are presented in Table-2.

The data in Table-2 show that the government could disburse 62.0 per cent of the total

amount allocated to finance the farmers as on September-2015. The percentage of achievement

was found highest in drought-prone mandal – Ananthapuramu – which was at 89.13 per cent,

followed by Visakhapatnam (88.41 per cent) and Prakasam (64.6 per cent) districts.

The Government has been showing special interest to finance the licensed cultivators

also. The Government has issued loan eligibility cards to licensed cultivators so as to finance

the needy licensed cultivators. The number of cards issued and crops loans sanctioned are

presented in Table-3.

Table – 3

Loan and Other Eligibility Cards issued and credit extended to licensed cultivators during 2015-16

(up to Sep, 2015)

Sl.No District No. of LECs issued No. of licensed cultivators

sanctioned crop loans

Renewal of New LECs Total Cultivators Amount

old LECs (Rs in Cr)

1 Srikakulam 7846 7644 15490 670 2.01

2 Vizianagaram 10830 4997 15827 707 0.82

3 Visakhapatanm 5043 9921 14964 1498 2.91

4 East Godavari 84288 16833 101121 39887 81.84

5 West Godavari 110650 112603 223253 23067 43.93

6 Krishna 6037 9369 15406 1024 2.94

7 Guntur 3210 7630 10840 653 3.26

8 Prakasam 13996 0 13996 689 2.28

9 Nellore 6364 1971 8335 202 1.05

10 Kurnool 12282 10179 22461 10 0.07

11 Ananthapuramu 417 3024 3441 650 1.99

12 Kadapa 4158 1186 5344 715 2.12

13 Chittoor 2475 2961 5436 241 1.66

Total 267596 188318 455914 70013 146.88

Source: Agriculture Department



The Government of Andhra Pradesh has issued 4.6 lakh loan and other eligibility cards

to licensed cultivators which comprise the renewal of 2.7 lakh cards. Similarly 70013 licensed

cultivators were sanctioned the crop loans to the turn of Rs. 146.88 crore as on September,

2015. The issue of eligibility cards was highest in West and East Godavari districts and the

amount of crop loans was also highest in these districts.

The comprehensive Credit Plan of the government prepared for each district for the year

2015-16 to facilitate pragmatic resource-based credit planning process at micro level has the

following features. The objective of the Plan is to provide timely Agricultural credit to

farmers at lesser interest rate.

It is proposed to issue Rs. 69548.83 crore towards agriculture credit for the year 2015-

16. For Crop loans, both Kharif and Rabi, the target was Rs. 50979.32 crore (73%); and for

Agriculture Term Loans including Allied to Agriculture, the target was Rs. 18569.51 crore

(27%).

The Andhra Pradesh government promulgated an Act in 2011 to provide loan and other

facilities eligibility card to the farmers, who raise crops with express or implied permission

of the owners, enabling them to access credit from the financial institutions and to claim

benefits of input subsidy, crop Insurance, compensation for damage of Crops etc. During

2015-16, it was proposed to facilitate institutional credit to 3, 39,214 land licensed cultivators

who have been issued Loan Eligibility Cards (LEC) by the Revenue Department.

During 2015-16, it is proposed to enrol and facilitate bank credit to new non- loaner

farmers @150 per each bank branch. It is proposed to facilitate institutional credit to the

about 16302 functional Rythu Mithra Groups in the Andhra Pradesh.

THE KISAN CREDIT CARD

The Kisan Credit Card has emerged as an innovative credit delivery mechanism to meet

the production credit requirements of the farmers in a timely and hassle free manner. The

banks should adopt the scheme by the vast institutional credit frame work. Term loans should

be sanctioned to farmers on Farm Machinery, to overcome the labour problem.

Another step the government has taken is the ‘Agricultural Debt Redemption scheme’

to Farmers, in order to give life support to the distressed farmers. The Crop Loans and

Agriculture gold loans disbursed for crop purposes only including the loans converted to

MTL due to calamities, up to 31.12.2013 and outstanding (including interest) as on 31-12-

2013, will be covered under the scheme. Loans which were outstanding as on 31.12.2013

would be eligible for redemption even if they were subsequently repaid to the bank/cooperative.

The government has released an amount of Rs. 7069.67 crores during 2014-15. For the year

2015-16, an amount of Rs. 4300.00 crores is allocated under Non Plan to benefit approximately

40.07 lakh farmers in the state.

141

The Government has announced the Pavala Vaddi scheme to the farmers who have

availed crop loans from Rs. 1.00 lakh to Rs. 3.00 lakhs and repaid within due date (maximum

up to 1 year). The farmer has to repay 3% interest amount on crop loans to the banks. During

2015-16, an amount of Rs. 1000.00 lakhs is allocated under Normal State Plan towards

Pavala Vaddi scheme on crop loans from Rs. 1.00 lakh to Rs. 3.00 lakhs.

The Government has also announced the Interest free Crop loans called Vaddi Leni

Runalu scheme to all the farmers up to Rs. 1.00 lakh and Pavala Vaddi for crop loans from

Rs. 1.00 lakh to 3.00 lakhs, if repaid in time from Rabi 2011. The interest subsidy will be

calculated on the crop loan amount from the date of its disbursement/drawl up to the date of

actual repayment by the farmer or up to the due date of the loan as fixed by the banks,

whichever is earlier, subject to a maximum period of one year. During 2015-16, an amount

of Rs. 17200.00 lakhs is allocated under Non Plan towards this scheme. The Annexure Tables

provides district wise details of agriculture credit for 2015-16, allocation for debt redemption

scheme etc.

STRATEGIES TO BE ADOPTED TO ACHIEVE THE TARGETS

The important strategies that followed to achieve the targets are given as under:

1. Banks may sanction crop loans on top priority before commencement of the cropping

season.

2. Banks may issue crop loans strictly adhering to the scale of finance fixed by the

District level Technical Committee (DLTC), and to prominently display scales of

finance in their notice boards.

3. LEC card holders should also be covered under loaning on par with regular farmers

on production of Loan and other Eligibility Card, either single or in a group mode

of Joint Liability Group (JLG).

4. Banks may extend finance to LEC holders under Joint Liability Group model financing

for the purposes other than crop loans, wherever the owners have already availed

crop loans to the full eligible extent of their eligibility.

5. Revenue Department may renew the Loan and Other Eligibility cards already issued

and issue fresh LECs to the Land Licensed cultivators.

6. Bankers should participate in Farmers meets and Conduct of credit camps in the

villages to create awareness among farmers regarding institutional finance.

7. Agriculture Department will identify the new non- loaner farmers and tenant farmers

and mobilize them to banks during “Polam Pilusthondi” programme.

8. Creating awareness among the farmers about the advantages of timely repayment of

loans by the farmers to be eligible for 0% interest and Pavala Vaddi on crop loans.

Wide publicity is also to be given among farmers about sanction for crop loans, Scale

of Finance, the cutoff date fixed and Consumption loans etc.



9. Banks should take up financing LECs /RMGs/JLGs in a big way to cater to the needs

of Small and Marginal farmers, Tenant farmers and oral lessees.

CONCLUSIONS

Besides the action plan and strategies the government of Andhra Pradesh has planned,

policy should address to create enabling environment that can significantly enhance CREDIT

ABSORPTION CAPACITY OF THE GEOGRAPHICAL AREAS AND FARMERS IN

EACH VILLAGE. INVESTMENT SHOULD GO INTO THE CREATION OF rural

infrastructure to improve farm fuel/energy, transport, communication, storage, processing and

marketing facilities in rural areas; expanding irrigation and reclamation of wastelands;

integration of agricultural education, research and extension services and strengthening of

capacity-building of farmers to bridge the huge yield gap between the potential yields and

actual yields at field level in rain-fed and irrigated farming systems; development and use of

genetically engineered seeds, micro-irrigation system, greenhouse technology, integrated nutrient

and pest management technique, computer-based modelling to track disease and pest incidence;

expanding farm mechanization program.

Steps should be taken to transform a negative SUBSIDY REGIME into a ‘CAPITAL-

INTENSIVE POSITIVE AGRICULTURAL MARKETING SERVICE REGIME’ and stimulate

production to generate marketable surplus. Attractive schemes and incentives should be provided

to make agriculture activity a remunerative enterprise. Solutions to minimize problems of

floods, drought and cyclones should be taken. Bank’s lending to indirect agriculture exceeding

4.5% of its net bank credit should be allowed for financing entrepreneurs who can provide

contractual services to farmers, more particularly small & medium ones in respect of facilities/

services. Banks need to design loan & other financial products to match farmers’ needs. There

is no evidence of a link between the growth of agricultural credit and the credit subsidy

introduced in 2006-07 in the country. Generalized loan waivers constitute a moral hazard and

impair the system as far as agricultural credit is concerned. So such steps are to be taken very

cautiously.

REFERENCES

1. Agricultural Statistics at a Glance 2014, Government of India, Ministry of Agriculture, Oxford

University Press, 2015.

2. Dar, Javid Ahmad (2015). Trend and Growth of Flow of Credit to Agriculture after 1991 in India,

IOSR Journal Of Humanities And Social Science (IOSR-JHSS) Volume 20, Issue 1, Ver. IV), PP 51-

61.

3. Godara, Ratan Lal; Singh, Partap &Singla, Sanjay (2014).Agriculture Credit in India: An Analytical

Study, International Journal of Latest Trends in Engineering and Technology, Vol. 3 Issue 3 January

2014.

143

4. Kumar, Anjani, Singh, K.M. and Sinha, Shradhajali (2010). Institutional Credit to Agriculture Sector

in India: Status, Performance and Determinants, Agricultural Economics Research Review, Vol. 23

July-December 2010 pp 253-264.

5. Narayanan, Sudha (2015). The Productivity of Agricultural Credit in India, WP-2015-01, http://

www.igidr.ac.in/pdf/publication/WP-2015-01.pdf.

6. Pal, Debdatta (2015). Linking Credit with other Markets: A Review of the Issues in Rural Economies,

Forum for Development Studies, Vol. 42, No. 1, 159–178, http://dx.doi.org/10.1080/08039410.

2014.974666.

7. Raithu Kosam Primary Sector Development: Status, Strategy and Action Plan (2015), Government

of Andhra Pradesh.

8. Socio-Economic Survey-2015-16, Planning Department, Government of Andhra Pradesh



ANNEXURE TABLES

District wise targets proposed for sanction of loans to LEC holders for the year 2015

145Agriculture Credit Flow in Andhra Pradesh • SUBHENDU DUTTA & C.S. SHYLAJAN

147Agriculture Credit Flow in Andhra Pradesh • SUBHENDU DUTTA & C.S. SHYLAJAN


ARTICLE / 24

DAIRY DEVELOPMENT IN ANDHRA PRADESH:A STUDY OF THE MILK COOPERATIVE SOCIETIES

IN NELLORE DISTRICT

D. Krishnamoorthy & A. Mallappa

Indian economy is basically an agricultural economy. About 69 per cent of India’s

population is living in rural India. For those who are living in rural India, agriculture is the

main occupation. Among the allied activities of agriculture, dairying has assumed greater

importance in India, due to its simple nature in generating additional employment and income

to millions of rural households. Dairying has been practiced as an allied activity since time

immemorial. India accounts for one-sixth of cattle and half-of buffalo population of the

world. The art of rearing of cows and buffaloes for milk is known as dairying. Milk is an

important contributor to India’s agricultural output. Today, it is India’s largest ‘crop’ in terms

of its output value, surpassing even major cereals like rice and wheat. India is the largest

producer of milk in the world. According to Economic Survey 2015-16, the production of

milk was estimated at 146.3 million tonnes in 2014-15 as compared to 137.69 million tonnes

during 2013-14 registering a growth of 6.26 per cent. The per capita availability of milk in

India has increased from 176 grams per day in 1990-91 to 322 grams per day by 2014-15.

It is more than the world average of 294 grams per day during 2013. The country has now

achieved self reliance in milk production and is geared for the export of substantial value

added milk products beyond its seashores. It has not only conserved the valuable foreign

exchange by almost eliminating the import of milk and milk products but also has started

exporting these products to African and Middle-East countries. The success of dairy industry

in India could, mainly, be attributed to the integrated cooperative system of milk collection,

transportation, processing and distribution under AMUL pattern. It should be noted that in

December 1946, Tribhuvandas Patel and Vallabhai Patel and others have formed Anand Milk

Union Limited (AMUL) in Gujarat for doing milk business from the collected milk of that

area. Dr. Varghese Kurien, the founder Chairman of the Gujarat Milk Marketing Federation

for more than 30 years is credited with the success of Amul. The Anand pattern is a system

that is collectively owned, operated and controlled by farmers. It ensures a fair price to the

Professor, Dept. of Economics, SV University, Tirupati.Professor, Dept. of MBA, Sri Venkateswara College of Engineering, Vidyanagar, Bengaluru, Karnataka.

149

farmers and high quality milk and dairy products to the consumers. It has been transplanted

with success in some Asian countries such as Bangladesh, Sri Lanka, China and in other

countries. Also the experience of Anand pattern village milk producers’ cooperatives has been

replicated by many states in India to suit their needs and priorities. The National Dairy

Development Board (NDDB) sphere heads the task of facilitating the formation of milk

cooperatives in India. In India, milk is processed and marketed by 170 Milk Producers’ Co-

operative Unions and 15 State Cooperative Milk Marketing Federations. Over the years,

brands created by cooperatives have become synonymous with quality and value. Gujarat

state tops high in milk procurement followed by Karnataka, Maharastra, Tamil Nadu and

Andhra Pradesh. One of the successful milk cooperative societies in India is Nellore District

Milk Producers’ Cooperative Limited. In this paper, an attempt is made to analyse the

functioning of the milk cooperative societies under Nellore District Milk Producers’ Cooperative

Limited in the three revenue divisions, viz., Kavali, Nellore and Gudur in terms of various

indicators.

OBJECTIVES AND METHODOLOGY OF THE STUDY

The following are the specific objectives of the study:

i. To study the growth and the functioning of the village level milk producers Cooperative

Societies in Nellore district of Andhra Pradesh;

ii. To analyze the problems that these societies are now facing; and

iii. To offer feasible suggestions for improving the performance of these societies.

The study is based on multi-stage random sampling technique. In the first stage all the

three revenue divisions in Nellore district viz., Nellore, Gudur and Kavali were taken up for

the study. From each revenue division, two mandals were selected using Simple Random

Sampling without Replacement. From each selected mandal, all the villages having Cooperative

Milk Societies were listed out and from out of them three villages having Cooperative Milk

Societies were selected using probability proportional to size (PPS) sampling technique. From

each village one milk cooperative society was selected. On the whole, in Nellore district,

from the three revenue divisions (3 x 2 mandals = 6 mandals) from 6 mandals (6 x 3 villages

=) 18 villages and 18 x 1 = 18 milk cooperative societies were selected for the study. The

period data collection related to the year 2014. The collected data were analysed using simple

two-way tables, descriptive statistical measures like mean, standard deviation, coefficient of

variation and compound growth rate that employs the semi-log function.

GROWTH OF MILK SOCIETIES

Table-1 furnishes the growth of total members of the village level milk societies in the

three revenue divisions of Nellore district. The relevant statistical data has been collected

from the year 2004 to 2013. A cursory glance at the table indicates that in Kavali revenue

Dairy Development in Andhra Pradesh • D. KRISHNAMOORTHY & A. MALLAPPA


division, there has been a deceleration in the growth of members from 610 in the year 2004

to 240 in the year 2013. The largest decline of -34.25 per cent seemed to have occurred in

the year 2013 as compared to the previous year 2012. The annual mean (average) level of

membership in Kavali division was 442.90 with a standard deviation value of 114.05. The

variation in the annual membership as indicated by the coefficient of variation (CV) was

considerably high at 25.75 per cent in Kavali revenue division. On the whole, the membership

in the milk cooperative societies in Kavali revenue division registered an annual negative

compound growth of -8.00 per cent which is statistically significant at one per cent probability

level as could be seen from the computed t-value of 10.98.

Table – 1

Growth of Cooperative Milk Societies in the three Revenue Divisions of Nellore District

Years No. of Members Year-on-year annual change (%)

Kavali Nellore Gudur Col 2 Col 3 Col 4

Division Division Division

2004 610 485 300 - - -

2005 586 538 335 -3.93 10.93 11.67

2006 553 560 375 -5.63 4.09 11.94

2007 465 485 399 -15.91 -13.39 6.40

2008 441 523 423 -5.16 7.84 6.02

2009 404 555 409 -8.39 6.12 -3.31

2010 385 459 519 -4.70 -17.30 26.89

2011 380 650 588 -1.30 41.61 13.29

2012 365 695 665 -3.95 6.92 13.10

2013 240 573 770 -34.25 -17.55 15.79

Mean 442.90 552.30 478.30

SD 114.05 73.96 153.04

CV 25.75 13.39 32.00

CGR -8.00 2.30 9.80

t-value 10.976** 1.959@ 8.932**

Note : **significant at 1 per cent level; @-Not significant

Source: Filed Survey

In Nellore Revenue division, the total number of members in milk cooperative societies

seemed to have increased moderately from 485 in the year 2004 to 573 in the year 2013. The

average number of members per year during the ten year period from 2004 to 2013 in Nellore

revenue division was 552.30 that were relatively higher as compared to the other two revenue

151

divisions of Kavali (442.90) and Gudur (478.30). At the same time, the fluctuations in the

annual membership in the cooperative milk societies in Nellore division both in absolute

terms (in terms of Standard Deviation at 73.96) and in relative terms (in terms of coefficient

of variation-CV at 13.39 per cent) were very low as compared to the other two revenue

divisions in Nellore district. On the whole, the membership in the village level milk societies

in Nellore division registered a moderate positive growth of 2.30 per cent per annum. The

growth, however, is not statistically significant as could be observed from the computed t-

value of 1.96.

As compared to Kavali and Nellore revenue divisions, the growth of membership in

cooperative milk societies of Gudur revenue division is highly impressive and statistically

significant. As could be observed from the table, the number of members in milk societies

in Gudur revenue division soared from a low base of 300 in the year 2004 to a staggeringly

high level of 770 in the year 2013. The average (mean) level of yearly membership in the

milk societies of Gudur revenue division has been registered at 478.30 for the period from

2004 to 2013. But the fluctuations in the average level of membership as indicated by

standard deviation (153.04) and Coefficient of variation (32 per cent) were higher in Gudur

revenue division as compared to the other two revenue divisions (25.75 per cent in Kavali

and 13.39 per cent in Nellore Nellore divisions).

In short, the growth of membership in the milk cooperative societies in the Gudur

revenue division (in terms of compound growth rate) has been positive and very high at 9.80

per cent per annum. The growth rate is also statistically significant at one per cent probability

level as could be observed from the t-values.

MILK PROCUREMENT

Milk procurement depends upon several factors. Firstly, the milk procurement depends

upon the seasons. During the rainy and winter seasons when the plenty of green fodder is

available for the cattle, milk will be available in large quantities and hence milk procurement

will also be high. This season is called flesh season. On the other hand, during summer

season, there will be shortage of green fodder and hence, milk availability will also be less.

Consequently, the milk procurement from the farmers will also be less. This season is called

‘lean’ season. The farmers respondents have given average milk procurement from them

taking into account both the flesh and lean seasons. Table – 2 incorporates the milk society

wise milk procurement in Nellore district. A cursory glance at the table indicates that the total

milk procurement per day by all the 18 Milk societies aggregated to 4932 liters in Nellore

District. The average milk procurement per society amounted to 274 liters per day. Among

the three revenue divisions in Nellore district, the total milk procurement seemed to have

been very high at 2230 liters per day in Gudur revenue division followed by Kavali revenue

division at 1370 liters and Nellore revenue division at 1332 liters per day. The average milk

procurement per day also varied in the same order in the three revenue divisions of Nellore



district. As against the district average of 274 liters per day, the average milk procurement

per day in Gudur division is very high at 371.67 liters per day followed by Kavali revenue

division at 228.33 liters and Nellore division at 222.0 liters.

Table – 2

Milk Procurement Per day Per Milk Society

Divisions No. of Societies Milk Procurement per day

in 2013 Morning (LTs) Evening (LTs) Per Day

Total Average Total Average Total Average

Kavali Division 6 520 86.67 850 141.67 1370 228.33

Nellore Division 6 455 75.83 877 146.17 1332 222.00

Gudur Division 6 840 140 1390 213.67 2230 371.67

Total 18 1815 100.83 3117 173.17 4932 274


Thus for the reasons discussed already, Gudur division has been showing good progress

not only in terms of growth of number of members in the cooperative societies but also in

terms of milk procurement. The members seemed to have taken keen interest to develop the

Dairy industry under the auspices of Nellore District Milk Producers’ Co-operative Union

Ltd. Normally, the milk yield in the morning is higher as compared to that in the evening.

But in the study area the milk yield seemed to be high in the evening as compared to that

in the morning. This could be observed from the data presented in the table. The total milk

procurement in the evening is relatively higher at 3117 liters as against 1815 liters in the

morning in Nellore district. Similarly, the average milk procurements in the evening and in

the morning were respectively at 173.17 liters and 100.83 liters in the district. The same trend

could be observed in all the revenue divisions.

PROBLEMS CONFRONTED BY THE MILK SOCIETIES

The findings of the study as reported in Table – 3, indicated that the village level

societies are confronted with several teething problems some of which are considered

insurmountable. Lack of finance seemed to be the major problem in the working of village

level societies. The fiancés needed for the day to day operations of the societies are mostly

drawn from the interest accrued from the Corpus fund which would generally be collected

from the members at the time of taking membership. These are also called shares of the

members. As per the information given by the members, the share amounts were very low

ranging from Rs. 10 to 15 per share. Depending upon the financial position of the members,

they buy as many shares as they want. There is also no matching grant from the government

153

to strengthen the financial position of the societies. Hence, all the 18 sample societies seemed

to have been confronted with the problem of lack of finance.

Another important problem confronted by the members is irregular supply of inputs to

the members. As noted already, the societies supply feed and ground nut cake to the members.

Due to inadequate finances, some of the Societies are not in a position to procure the inputs

and supply the same to the members.

Another important problem emanated from the analysis is lack of support from the

district organization. Three societies from Kavali revenue division, four societies from Nellore

revenue division and 3 societies from Gudur revenue division expressed dissatisfaction over

the inadequate support received from the district level organization viz., Nellore District Milk

Producers’ Cooperative Union Ltd. The major areas of concern were inadequate and untimely

supply of inputs, absence of financial support to extend loans to the needy members, delays

in providing technical and veterinary services to the members etc.

It was also brought to the notice of the researcher that there was no cooperation among

the members on several aspects. In some villages, group politics and domination by a handful

of members seemed to have been affecting the proper functioning of the milk cooperative

societies in the district. As could be observed from the table, the problem seemed to be very

high in Kavali revenue division where four out of six unions were confronted with this

problem. While two societies seemed to have been affected with the problem of lack of

cooperation among the members in Nellore division, one society is stated to have been

affected with this problem in Gudur revenue division.

The members also do not supply the prescribed quantities of milk regularly. Occasionally

on some pre-text such as ill health, out of station, arrival of guests etc., the members reduce

the quantity of milk supplied or do not supply the milk altogether. Sometimes, the private

milk dairies lure the milk suppliers by providing advance to them in needy times and get the

milk supply diverted to them. As a result, there are fluctuations in the quantity of milk

procured and supplied to the chilling centers.

Several private Dairies in the district have sprung up in the district putting cut throat

competition to the Nellore Dairy. These include Dodla Dairy, Sangam Dairy, Heritage Dairy,

Mother’s Dairy, Arogya Milk etc. These private dairies offer several concessions and liberal

financial facilities to the members and lure the members to supply milk to these dairies.

Consequently, the Nellore Cooperative Dairy has been facing several problems. Out of six

sample societies in each of the three revenue divisions, 5 societies in Kavali Revenue division,

4 societies in Nellore Revenue division and 3 societies in Gudur Revenue division were

facing stiff competition from the private dairy units.

Political interference, particularly the local political leaders, in the affairs of the

management of the milk cooperative society is also hindering the harmonious functioning of

the village level Milk Cooperative Societies in Nellore district. The political interference



seemed to be very high in the case of distribution of inputs to the members, in the case of

allotment of shares of the society, in the case of election of the president, secretaries and other

executive members of the society. While four societies in Nellore revenue division have been

affected by undue interference by the political leaders, three societies in Kavali revenue

division and two societies in Gudur revenue division have been affected by the political

interference.

Table – 3

Problems in the Management of Village-level Societies

S. No. Problems Kavali Division Nellore Division Gudur Division

1. Lack of Finance 6 6 6

2. Irregular supply of Inputs 2 3 2

3. Lack of Support from district Organization 3 4 3

4. Lack of Co-operation among the members 4 2 1

5. Irregular supplies of milk 3 2 2

6. Non availability of loans from the banks 4 3 3

7. Competition from private Dairies 5 4 3

8. Political interference 3 4 2

9. Delay in taking decisions 2 3 3

10 Delay in the transfer of assets from APCS to MACS 4 5 4


Due to undue political interference, inordinate delay seemed to have been taking place

in taking several decisions relating to the supply of inputs, recommending loans to the

members, payment of money to the members etc. Two societies in Kavali revenue division,

three societies each in Nellore and Gudur revenue divisions seemed to have been suffering

from the problem of inordinate delay in taking right decisions.

Another important problem being faced by the cooperative milk societies in Nellore

district is the delay in the transfer of assets from the earlier organization to the present

organization. Earlier the Cooperative milk societies in Nellore district were functioning under

the Andhra Pradesh Cooperative Societies Act of 1964. However, in the year 1995 the Andhra

Pradesh Mutually Aided Cooperative Societies Act came into existence. Nearly 3120 societies

in the undivided Andhra Pradesh were converted from the A.P.C.S Act 1964 to APMACS Act

1995 and 26, 958 were new registrations under the APMACS Act 1995. Nellore Milk Union

was one among the societies which were converted from the old Act to the new Act. However,

the assets of the old societies were not transferred to the new society in several villages. As

could be observed from the table out of the total 18 societies in Nellore district, assets have

not been transferred in the case of 5 societies in Nellore revenue division, 4 revenue divisions

from each of Kavali and Gudur revenue divisions.

155

CONCLUDING OBSERVATIONS AND SUGGESTIONS

Dairying is an important allied activity of agriculture, which provides the needed support

to the small and marginal farmers to augment their employment and income levels. Since, the

cooperative structure provides the much-needed impetus to them to undertake the activity on

profitable line, the institution of milk cooperative societies should be strengthened. The

needed finances should be extended to the members based on collective security. The political

interference should be kept at the low ebb. The members should resolve their differences with

mutual understanding and give and take policy. For the sake of short-term gains from the

private vendors, the members should not ransack and destroy the institution of the cooperative

societies, which provide eternal benefits to the members as well as to the consumers. The

government should take earnest efforts to transfer the assets from the societies under A.P.C.S

Act 1964 to societies under APMACS Act 1995 so that the administration would run on

smooth lines.

SELECT REFERENCES

1. Government of India (2014), Report of the National Commission on Agriculture and Animal

Husbandry, New Delhi: Ministry of Agriculture and Irrigation.

2. Bhasin, N.R. (2012), ‘Regional Cooperation and Indian Dairy Industry’, Indian Dairy Man, Vol. 78,

p.12.

3. Government of India (2016), Economic Survey: 2015-16, Vo. I & II, New Delhi: Oxford University

Press.

4. Chahal, S. (1998), “Performance of co-operative in marketing of milk in Punjab”, Indian Co-

operatives Review.



ARTICLE / 25

COOPERATIVE BANKS FOR THE DEVELOPMENT OFAGRICULTURE SECTOR IN ANDHRA PRADESH

M. Usharani, K. Swarooppa Rani, V. Sreevani & G. Savaraiah

INTRODUCTION

The role of credit in agricultural economy is crucial and it helps in enhancing productivity

and promoting standard of living of the farmers. In India, the co-operative banking sector

plays an important role in providing credit to agriculture sector. In this study, an attempt has

been made to examined the role of Cooperative banks in agriculture credit from 2007-2008

to 2014-15 in India and particularly in Andhra Pradesh. Thus, this study examines the structure,

trend and progress of cooperative banking institutions and challenges faced by Cooperatives

in agricultural development as they provide basic credit which lubricates the wheel of

agriculture.

Agricultural Cooperatives in India are the backbone of the cooperative system and

involved in variety of functions and serving the rural masses by providing credit, Agro-

Chemicals, Agriculture Implements, fertilizers, seeds, etc. Their role has been commendable

in making essential inputs available to the rural masses for the development of the agriculture

and allied activities. Andhra Pradesh is basically an agrarian economy and is known as

“Granary of the South” by producing one-tenth of India’s total output of food grains. As

Andhra Pradesh is predominantly agricultural in character around 70 percent of the population

depends on it for their livelihood. In Andhra Pradesh the Co-operative credit societies play

an important role in serving the needy farmers by providing short term, medium term and

long term loans at lower rates of interest. Andhra Pradesh is the first state which implemented

the Single Window Credit Delivery System (SWCCDS) in 1987.It is an innovative programme

in which PACS are expected to provide multi-farm credit and multi-functional services at a

single contact point to help the poor farmer.

Agriculture scenario in Andhra Pradesh has witnessed fast transformation since 1991.

In this process, farmers have become more capital intensive as they are shifted to raise the

commercial crops which involves huge investments. The farming community mostly small

and marginal farmers is not able to invest such huge investments on farms on its own as it

Ph.D Research scholars, Dept. of Economics, S.V.U.College of Arts, Tirupati.Ph.D Research scholars, Dept. of Economics, S.V.U.College of Arts, Tirupati.Ph.D Research scholars, Dept. of Economics, S.V.U.College of Arts, Tirupati.Professor, Dept. of Economics, SV University, Tirupati, Tirupati, Andhra Pradesh.

157

do not have any assets or money. Thus their dependence on credit has increased for meeting

their agricultural requirements. The three- tier short-term and two-tier long- term cooperative

credit structures are merged under Single Window Cooperative Credit System (SWCCDS) in

the undivided state of Andhra Pradesh. The basic objective of the cooperatives was to eliminate

exploitation of the farmers by the money-lenders, by providing timely cheap credit at low rate

of interest to the farmers for agricultural development. Cooperative Banks are playing an

important role for the diversification of agriculture loan by providing loans to the farmers for

the various allied agricultural activities like Dairy, Poultry and Fishery etc. under the SWCCDS.

OBJECTIVES OF CREDIT CO-OPERATIVES

The following are the objectives of cooperatives:

1. To ensure timely and increased flow of credit to the farming sector

2. To reduce and gradually eliminate the money lenders

3. To reduce regional disparities throughout the country

4. To provide longer credit support to various rural development programmes

5. To provide cheap credit with or without any security.


The very purpose of the present study is to examine the growth and performance of

Cooperative Banks in respect to agriculture credit in India and with particular reference to

Andhra Pradesh. The paper aims at an analysis of analyses the flow of the co-operative credit

for agricultural development in Andhra Pradesh.

PRIMARY COOPERATIVE AGRICULTURAL CREDIT SOCIETIES (PACS)

PACS, as the foundation of the Co-operative system are meeting the development needs

of the farmers by providing credit, inputs and storage and processing and marketing facilities.

The business of the Primary Societies has to be diversified under the Single Window

Cooperative Credit Delivery System in the undivided State of Andhra Pradesh. In fact, Primary

Agricultural Credit Society (PACS) is the kingpin of the entire cooperative credit movement

in A.P or elsewhere in the country. Loans are given for short-term period, normally for the

harvest season, for carrying on agricultural operations, and the rate of interest is fixed. The

primary agricultural credit society was expected to attract deposits from among the members

and non-members of the village and thus promote saving and self-help. But in actual practice

PACS did not involve in the deposit mobilization. It encourages the people in the villages to

deposit their money in the District Central Cooperative Bank as it has safe locker facilities

and the rate of interest on deposits is higher than that of the commercial banks. It provides

short-term, medium-term and long-term loans and advances to needy members under the

Cooperative Banks • M. USHARANI, K. SWAROOPPA RANI, V. SREEVANI & G. SAVARAIAH


Single Window Cooperative Credit Delivery System (SWCCDS). The Government of Andhra

Pradesh has taken many reforms in order to strengthen the PACS in the State. The loss

making PACS were merged with the viable PACS as recommended by the Vaidyanadhan

Committee. The particulars relating to the number of PACS and their membership in Andhra

Pradesh and Indian are presented in table-1

Table – 1

Number of PACS and Membership with PACS

Year No. of PACS India Membership In Thousand (in’000)

Andhra Pradesh Andhra Pradesh India

2007-08 4064 94950 22000.83 131530.00

2008-09 2748 95633 13122.79 132349.90

2009-10 2721 94647 12405.35 126419.14

2010-11 2792 93413 12146.15 121224.88

2011-12 2807 92432 12056.37 113595.62

2012-13 2807 93488 12056.37 127467.79

2013-14 2807 93042 7997.47 130119.64

2014-15 2807 92789 12056.37 121087.81

Source: NAFSCOB

The Table-1 above shows that the number of primary agricultural credit societies (PACS)

has drastically declined from 4064 is 2007-08 to 2721 in 2009-10 shows 30.8 percent decline

due to reorganization of PACS in the undivided Andhra Pradesh State. Later on, it has

gradually increased to 2807 in 2011-12, registering an increase of 2.2 percent. The similar

trend is also seen number of PACS has continued even today in the Navyandhra Pradesh. The

same trends have appeared in case of the number of PACS in India where it shows the

number of PACS has declined by 2161 PACS in 2015 over 2007, registering a decline of 2.28

percent during that period.

The members of the PACS are the pillars of the cooperative credit movement in Andhra

Pradesh or elsewhere in the world. All the farmers are generally become the members of

PACS. But in case of PACS under Single Window Cooperative Credit Delivery System

(SWCCDS) all the farmers and non-farmers in the area of operation of PACS will join as

members since the PACS has providing long term finance. Hence, the membership per PACS

was very much higher in the initial period when SWCCDS was introduced. The membership

of PACS in A.P has declined from 22001 thousands in 2007-08 to 12056 thousands in 2014-

15, indicating a two-fold decrease whereas in case of India, there is one- fold decrease in the

membership of PACS from 131530 in 2007-08 to 121088 thousands in 2014-15. The

membership per society has also declined from 5414 in 2007-08 to 4295 during 2014-15 in

159

Navyandhra Pradesh whereas in India it declined from 1385 to 1305 during the same period.

The above analysis reveals that the number of PACS and the number of members in PACS

have declined during the period 2007-08 to 2014-15.

LOANS AND ADVANCES OF PACS

The PACS have to provide short-term, medium- term and long- term loans to its members

under SWCCDS. But in actual practice, PACS are only providing short-term and medium-

term credit to the farmers. Mostly they are supplying short-term production crop loans to the

farmers (members) in their area of operation. The particulars relating to the loans issued to

the agriculture sector by PACS in the state of Andhra Pradesh and India from 2007-08 to

2014-15 are presented in table-2

Table – 2

LOANS ISSUED TO AGRICULTURE SECTOR BY PACS

(Rs. In Lakhs)

Year Andhra Pradesh India

2007-08 270537.58 5764247.97

2008-09 257541.41 5878674.15

2009-10 333920.78 7493753.97

2010-11 20590.81 9130388.26

2011-12 166495.22 10730023.20

2012-13 166495.22 16190915.99

2013-14 400350.10 17141955.84

2014-15 400350.10 15905029.14

Source: NAFSCOB

The data in the Table-2 depicted that the loans issued by PACS to agriculture sector in

Andhra Pradesh and India has spectacularly grown during the study period. It is evident that

there is about one and half fold and more than two and half-fold increase in the total loans

issued by the PACS in Andhra Pradesh and India respectively. The average loan per society

has also tremendously increased from Rs.66.57 lakhs in 2007-08 to Rs.142.63 lakhs in 2014-

15 in Andhra Pradesh whereas in case of India, the average loan per PACS has also

tremendously increased from Rs.60.71 lakh to RS.171.41 lakhs during the same period. It

shows that the volume of loan amounts has tremendously increased during the last eight years

in both Andhra Pradesh and India. However, the loans issued by PACS in the state of A.P

recorded very meagre share over the loans issued by all PACS in India is found just 2.52

percent in 2014-15 as against 4.69 percent in 2007-08. It indicates that the share of A.P has

considerably declined during the same period. It means that the PACS have been restricted



their lending operations to low levels when compared with that of the lending activities of

PACS in India.

DISTRICT CENTRAL COOPERATIVE BANKS (DCCBS):

The District Central Co-operative Bank (DCCB) occupies and forms an important

position in the Co-operative credit structure. The success of the Co-operative credit movement

largely depends upon the role and financial strength of the DCCB. The finance granted by

the DCCB is given to the cultivators through PACS. The Central Cooperative Banks located

at the district headquarters or some prominent town of the district. Their main function is to

lend to primary credit society and undertake normal commercial banking business also, such

as attracting deposits from the general public and lending to the needy against proper securities.

The particulars relating to the number of offices and the membership of district central

cooperative banks in the state of AP and India are furnished in table 3.

TABLE – 3

No. of Offices and Membership of District Central Cooperative Banks

Year No. of offices with H.O. Membership

Andhra Pradesh India % Share Andhra India % Share of A.P.

of A.P. Pradesh

2007-08 573 13151 4.36 1774465 3396881 52.2

2008-09 565 13233 4.26 246920 3528802 57.06

2009-10 562 13181 4.27 295305 3975660 61.77

2010-11 562 13327 4.24 299253 3146070 26.99

2011-12 567 13495 4.20 286426 3659385 29.47

2012-13 577 13656 4.23 322770 3915657 38.59

2013-14 585 13811 4.24 972174 3563497 27.28

2014-15 611 14060 4.35 1097430 3347203 32.78

Source: NAFSCOB

The Table-3 shows that the number of offices i.e branch network of DCCBS has grown

in the state of Andhra Pradesh and India. But in case of membership of DCCBs has increased

from 573 and 13151 in 2007-08 to 611 in AP and 14060 in 2014-15 in India registering an

increase of 6.63 percent and 6.91 percent in AP and India respectively. There is a considerable

decline in the membership of DCCBs in AP (38.15 percent) and India (1.46 percent). However,

the share of offices of DCCBs in AP to the total offices of DCCBs in India has marginally

declined from 4.36 percent in 2007-08 to 4.36 percent in 2014-15. The share of membership

of AP has gradually declined from 52.2 percent to 32.78 percent during the same period. The

above analysis reveals that there is a decrease in the membership and also the number of

161

offices due to the changes in the operations of DCCBs as suggested by the Vaidyanathan

Committee Report.

LOANS ISSUED TO AGRICULTURE SECTOR BY DCCBS

The Central Cooperative Banks have provided short-term and medium- term loans to

the members of DCCBs.The DCCBs have to supply the required credit to the PACS for

agricultural development. The DCCB provides guidance for the improvement of the financial

soundness of the PACS in its area of operations. The particulars relating to the short-term and

medium term loans provided by the DCCBs for agriculture sector are furnished in Table-4.

TABLE – 4

LOANS ISSUED TO AGRICULTURE SECTOR BY DCCBs

(Rs. In lakhs)

Year Short term Loans Medium term Loans

Andhra Pradesh India % Share Andhra Pradesh India % Share

2007-08 254453 4113718 8199 239844 3.42

2008-09 215512 3974546 6.19 14037 255891 5.49

2009-10 395392 5168183 5.42 10814 302545 3.57

2010-11 535052 6460688 7.65 28726 368434 7.79

2011-12 610119 7631374 8.29 30785 362917 8.49

2012-13 1221412 10141581 7.99 23734 366994 6.46

2013-14 1210747 11349254 12.04 51096 415732 12.30

2014-15 846683 12135621 10.67 40846 613446 6.65

Source: NAFSCOB

The Table-4 reveals that the short-term production credit supplied to the farmers through

DCCBs has increased from Rs.2545 crore in 2007-08 to Rs. 8467 crores in 2014-15, shows

more than three-fold increase in Andhra Pradesh whereas it has grown by about threefold

increase in India during this period. Medium term loans in AP has tremendously increased

from Rs.82 crores in 2007-08 to Rs.408.5 crores in 2014-15 registering about five-fold

increase whereas these loans in India has risen by Rs.3736 crores in 2014-15 over 2007-08,

and its share in medium term loans issued by DCCBs in Andhra Pradesh over total medium

term loans issued by all DCBs in India considerably increased from 3.42 percent in 2007-08

to 12.30 percent in 2013-14 and further declined to 6.65 percent in 2014-15. The short-term

production loans issued by DCCBs to the PACS constitute about 95 percent of the total loans

and advances made by DCCBs in AP and India. The data reveals that most of the DCCBs

have concentrated more on the crops loans which are payable within a year or after the



harvest but in case of medium-term loans, the repayment may be more than 3 years. There

is a problem of recycling of funds at DCCA level it PACS delayed to repay the medium-term

loans.

STATE COOPERATIVE BANKS (SCBS)

The State Cooperative Banks have to finance, co-ordinate and control the working of

the Central Cooperative Banks in each state. They serve as the link between the Reserve bank

and the general money market on the one side and the Central Cooperative Bank and Primary

Credit Societies on the other. They obtain their funds mainly from the general public by way

of deposits, loans and advances from the Reserve Bank and they can also improve their own

share capital and reserves. The members of the state cooperative banks generally consist of

the individuals, government, central cooperative banks and other cooperative societies. The

particulars relating to the number of offices of the state cooperative banks and their membership

are shown in the following Table-5.

Table – 5

No. of Offices and Membership by State Cooperative Banks

Year No. of Offices inclusive H.O Membership

Andhra India % Share Andhra India % Share

Pradesh of AP Pradesh of AP

2007-08 26 994 2.62 23 200768 —

2008-09 26 992 2.62 23 200772 —

2009-10 26 1015 2.56 23 330808 —

2010-11 26 1028 2.52 22 234827 —

2011-12 26 1036 2.50 22 254358 —

2012-13 37 1081 3.42 22 339896 —

2013-14 37 1096 3.32 23 338455 —

2014-15 37 1131 3.32 23 555479 —

Source: NAFSCOB

The state cooperative banks have opened their offices in the important towns and cities

in their respective States with a view to provide finance to the DCCBs and monitor their

activities for smooth function of the cooperative banks. The total number of offices of State

Cooperative Bank (SCB) in AP has shown only 26 throughout the period from 2007 to 2012,

there after it considerably increased to 37 which continued up to 2014-15 whereas in India,

the number of offices has significantly increased from 994 in 2007-08 to 1131 in 2014-15,

registering an increase of 13.78 percent. The percentage share of number of offices of SCBs

in Andhra Pradesh over total SCBs in India has considerably increased from 2.62 percent to

163

3.37 percent during the same period. The membership of AP SCB is only 23 throughout the

period except 2011 to 2013 whereas the membership of all SCBs in India has increased from

2001-08 in 2007-08 to 555479 in 2014-15, shows more than two and half-fold increase. The

share of membership of SCB in A.P when compared with all SCBs in India is negligible.

AGRICULTURAL LOANS ISSUED BY SCBS

The loans and advances of State Cooperative Banks issued to their members particularly

DCCBs in Andhra Pradesh and India have shown in the following Table-5.

Table – 6

Agricultural Loans Issued by SCBs

(Rs. In lakhs)

Year Short term Loans Medium term Loans

Andhra Pradesh India % Share Andhra Pradesh India % Share

2007-08 231129 2255415 10.25 9166.00 91014 10.07

2008-09 157118 2647386 — 10225.00 85182 12.03

2009-10 225551 2485266 9.08 -0- 65574 —

2010-11 410437 3727114 11.02 -0- 165055 —

2011-12 441188 4789779 9.30 -0- 111436 —

2012-13 611496 5407632 8.40 -0- 152639 —

2013-14 639636 7613699 7.32 -0- 144932 —

2014-15 548703 7493708 30.09 35266 239572 14.72

Source: NAFSCOB

Table-6 reveals the short-term and medium term agriculture loan issued by the State

Cooperative Banks in Andhra Pradesh and all over India during 2007-08 to 2014-15. The

short-term loans issued to the DCCBs by the SCB has risen by Rs.3176 crore in 2014-15 over

2007-08, in Andhra Pradesh registering about two and half-fold increase whereas the Short-

term loans issued by all SCBs in India have shown three-fold increase during the same

period. It shows that there is an impressive growth in the short-term lending by the SCBs in

AP and India.

It is disheartening to note that the SCB in AP has not given medium- term loans to the

DCCBs from 2009-10 to 2012-13.However, the medium-term loans issued by SCB in AP is

of Rs.353 crore in 2014-15 as against Rs.92 crore in 207-08 whereas the medium-term loans

issued by the SCBs at all India level has increased from Rs.910 crore in 2007-08 to Rs.2396

crore in 2014-15, registering an increase of 163.3 percent. The share of short-term loans of

SCB in AP over all India level has declined from 10.25 percent to 7.32 percent during the



same period 2007-08 to 2013-14. This analysis reveals that the SCB in A.P has not able to

provide sufficient short-term loans to the farmers in the state through DCCBs and PACs

because of low level of refinancing facilities.

CONCLUSION

In the context of trade liberalization and globalization, the cooperative approach is one

of the best means of self-protection for small farmers mainly due to its self-help concept and

member’s participation. It is therefore vital for agricultural cooperatives to strengthen

cooperative credit, improve the efficiency of agricultural credit supply, and enhance capital

market flexibility to overcome the weakness of the banking business of agricultural cooperatives.

Especially, members’ participation in the agricultural cooperative approach and effective

supervised credit system must be emphasized for the improvement of the agricultural financing

system. It is also urged that the banking sector of agricultural cooperatives must take measures

to reform themselves into a universal banking system by which both farm credit as well as

nonfarm credit will be efficiently supplied.

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ARTICLE / 26

DROUGHT IMPACTS AND MITIGATION MEASURES :A CASE OF ANDHRA PRADESH

M. Srinivasa Reddy

Drought emerges as a major environmental and socio-economic problem with negative

effects on the livelihood of populations in many developing countries. Although, drought may

happen virtually in all climatic zones, yet, its characteristics differ considerably from one area

to another. Rainfall, groundwater availability, reservoir levels and crop conditions determine

the nature and extent of drought in a specified geographical area. Drought induced poverty

leads to gross abuse of environmental resources, thereby generating land degradation that

leads to desertification, which in turn accentuates poverty. Heavy dependence of the poor on

the natural resources for livelihood that puts a disproportionate pressure on the land, thereby

accelerating environmental degradation is also a problem of drought recurrent.

Literature categorizes drought in four categories (Nagarajan 2003): meteorological,

hydrological, agricultural and socio-economic:

(a) Meteorological drought refers to the deficiency of rainfall compared to the long-term

amounts on monthly, or seasonal, or annual tile scales. For instance, Indian

Meteorological Department (IMD) defines drought on the basis of rainfall deficiency

which is applicable to whole of India. According to this definition, when seasonal

rainfall received over an area is less than 75 per cent of its long-term average value

is considered as drought; moderate drought if the rainfall deficit is less 26-50 per

cent ; and severe drought if deficit exceeds 50 per cent of the normal. When an area

affected by drought is more than 20 per cent of the total area of the country, a year

is considered as drought year;

(b) Hydrological Drought is associated with the effects of periods of precipitation short

falls on surface/subsurface water supply and its frequency and severity of hydrological

drought is often defined on a watershed or river basin scale;

(c) Agricultural drought on the other hand related to precipitation shortages, differences

between actual and potential evapo-transpitation, soil water deficits, etc. The physical

and biological properties of the soil, weather conditions, biological characteristics of

the specific plant, and its stages of growth influences plant water requirements.

Assistant Professor, Centre for Economic and Social Studies (CESS), N.O.Campus, Begumpet, Hyderabad.


Agricultural drought accounts the variable susceptibility of crops during different

stages of crop development starting from emergence to maturity; deficient topsoil

moisture thus hinder germination, leads to low plant populations per hectare, and

reduction of final yield; and

(d) Socio-economic drought is a situation when the demand for economic goods (such

as water, forage, food grains, fish, hydroelectric power, etc.,) exceeds supply as a

result of water-related shortfall in water supply.

About 500 million people are living in drought prone areas of the world and more than

30 per cent of the continental surface is affected by drought or desertification process. Due

to its nonstructural nature, it is spreading to more and more geographical regions. Some of

the perennial drought-prone regions of the world are located in South Asia. Countries like

India, Afghanistan, Sri Lanka, and Pakistan are experiencing drought in every three consecutive

years. Of all the South Asian counties, India is most affected by drought due its high dependency

on monsoon rains to annually replenish water resources. India experiences 39 droughts during

1876-2009 (Indian Council of Agricultural Research), out of which 3 years (1918, 1877 and

1899) are categorized as calamitous (more than 60 per cent area of the country affected); 5

years (1972, 1987, 1992, 2002 and 2009) falls under severe category (more than 40 and less

than 60 per cent of the area affected); and remaining 32 years are categorized as moderate

(16 years) and slight (16 years).(See Annexure-1).

Declaration of drought is the domain of the State Government. Basically two criteria’s

are adopted for declaration of drought in India: rainfall deficit and reasonable irrigation

facility. It is observed that, “Areas where the frequency or probability of failure of annual

rainfall by more than 25 per cent from the normal was found to be 20 per cent or more for

the observed years, were considered as drought-prone (Irrigation Commission of India 1972).

Areas where the frequency exceeded 40 per cent were considered as chronically drought-

prone” (Nadkarni, 1985).

About one-third of India’s geographical area receives very low level of rainfall (less

than 1000 mm). About 77.6 per cent of its geographical area experienced drought once or

twice in each five year due to poor monsoon. About 11 per cent of countries population and

16 per cent of counties geographical area are severely affected by drought. There are a total

of 40 drought years since 1801; drought occurs in each 5 year; 9 occasions when drought

occurred in each alternate year; 4 occasions having drought occurred in each consecutive year

(Table-1).

AP is the third most drought prone State in India after Rajasthan & Karnataka and has

8 chronically drought prone Districts (out of 23 Districts) viz., Anantapur, Chittoor, YSR

Kadapa, Hyderabad, Kurnool, Mahaboobnagar, Nalgonda and Prakasham. (Manual for Drought

Management, 2009, MoA, GoI Page.22). The total drought prone areas, according to the

agro-climatic zone, constitute 30 to 40 per cent of the geographical area of the state. These

167

districts are called “rain-shadow” districts with annual average rainfall below the state average.

They are home to the 35 per cent of the total population in AP (30 million) where agriculture

is the principal livelihood activity. They account 43 per cent of the cultivators and 36 per cent

of agricultural labour of the state. However, the impact of water scarcity spreads over the

boundary of the drought region. Thus subsequent notifications considered 11 districts as

drought-prone (DPAP) and one district as desert-prone.

Table – 1

History of Droughts in India

Period Drought Years No. of Drought

1801-1830 1801, 1804, 1806, 1812, 1819, 1825 6

1831-1860 1832, 1833, 1837, 1853, 1860 5

1861-1890 1862, 1866, 1868, 1873, 1877, 1883 6

1891-1920 1891, 1897, 1899, 1901, 1904, 1905, 1907, 1911, 1918, 1920 10

1921-1950 1939, 1941 2

1951-1980 1951, 1965, 1966, 1971, 1972, 1974, 1979 7

1981-2010 1982, 1987, 2002, 2009 4

GoI, data compiled and analysed in different years, Indian Meteorological Department, New Delhi

As per the Guidelines contained in Manual for “Drought Management, 2009” Published

by Ministry of Agriculture, Government of India (GoI), the State for the first time has also

sought the assistance from National Remote Sensing Centre (NRSC) and Acharya N.G.Ranga

Agriculture University (ANGRAU) and obtained data on scientific and satellite data based

indices like Normalised Difference Vegetation Index (NDVI) and Moisture Adequacy Index

(MAI) for each and every Mandal of the State. NRSC basing on satellite and ground data

computed NDVI and NDWI anomalies and reported 562 Mandals under Moderate to Severe

Category and 164 Mandals under Mild Category. Similarly as per MAI values 710 Mandals

are categorized as Drought affected (381 Mandals under Mild drought, 292 under Moderate

drought and 37 Mandals under severe drought).

As far as the frequency of drought in AP is concerned, it is increasing in the state,

especially, after 1995. By the year 2011-12, the state experienced 12 drought years out of the

17 years. Even non-DPAP districts were also severely affected as far as percentages of

Mandals were affected by the drought, especially, during 1997-98, 2001-02, 2002-03, 2004-

05, 2009-10 when 68 %, 80%, 94%, 58%, and 92% of the Mandals in the respective years

were declared as drought Mandals. In the year (2011-12), 55 per cent of the Mandals of the

Non-DPAP districts were also declared as drought affected (Annexure-2). The droughts

experienced during the years 1997-98, 1999-2000, 2001-02, 2002-03,2004-05, 2009-10 and

2011-12 are considered to be severe in terms of the number of Mandals affected (Table-2).

Drought Impacts and Mitigation Measures • M. SRINIVASA REDDY

168 The Economy of Andhra PradeshT

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169Drought Impacts and Mitigation Measures • M. SRINIVASA REDDY

171

However, assessing the economic impact of drought is more complex than that of rapid

onset disasters because the impact of deficiency of rainfall on agricultural assets (e.g., crops)

is a complex hydrologic and agronomic phenomenon, and drought normally lacks the highly

visible direct impacts associated with rapid onset disasters, making indirect economic losses

difficult to quantify. Moreover, their impacts are generally nonstructural and spread out over

large areas, and thus, making them less understood as compared to other natural forces.

The South Asia Environment and Social Development Department (SAESD) of the

World Bank had looked into the long term impacts of drought and the consequent adaptation

strategies in AP during the year 2005. For this purpose eight (out of total 23) districts in AP,

which are particularly vulnerable to drought: Anantapur, Chittoor, Cuddapah and Kurnool in

Rayalaseema region; Rangareddi, Mahbubnagar and Nalgonda in Teleangana region; and

Prakasam in coastal Andhra regions were selected. The basic objective of the study was to

complement the existing state and central government programs by enhancing state’s capacity

to assess the long-term impacts of drought and raise resilience at different levels to drought

risks. While the approach adopted by this study broadly follows a general catastrophe risk

modeling framework used for assessing the impacts of rapid onset disasters (such as cyclones,

floods and earthquakes), it also customized the framework to a different risk assessment

paradigm – the one that can be applied to slow onset disaster, such as drought. To estimate

indirect losses which might have been generated as a result of drought, macro-econometric

model and input-output models were used.

The study has examined the impact of drought on AP economy in terms of changes in

the gross value added (GVA) in various sectors of the economy and interrelations between

them over the period of 1980-2003. Each of these years were compared with the preceding

normal/drought year to assess the impacts on the overall economy and across the three

aggregate sectors – primary, secondary and tertiary. Sector-wise, the macro-econometric model

shows a significant negative impact of drought on the agricultural sector, a much more

limited impact on the livestock sector and the secondary sector, and an even positive impact

on the tertiary sector.

The 2002 drought year saw a decrease in the contribution of agriculture to state GDP

as compared to the preceding year 2000-01, which was a normal year. While agriculture

contributed to about 21 per cent of Gross State Domestic Product (GSDP) during the 2000-

01, it decreased to about 15 per cent the following year. In particular, the contribution of

water intensive crops like paddy decreased from about 7 per cent in 2000-01 to about 4 per

cent in 2002-2003. The production of paddy has decreased to such an extent that the state

needed to import paddy. Similarly, decline in output of other food grains and food crops also

resulted in imports from other states. The intermediate consumption of paddy and other food

crops has declined by 24 and 2 per cent respectively. The private final consumption expenditure

on paddy has also declined by 2 per cent for the year 2002-03 in absolute terms in spite of

about 8 per cent increase in population. Contrary to agriculture, the livestock sector experienced



a rise of 77 per cent in the production despite drought. Drought years 1997-1998 and 2002-

03 clearly affected the agriculture sector, with a loss in Gross Value Added (GVA) higher than

20 per cent, while these drought events did not significantly impact the livestock sector.

Indeed, during the drought of 2002, the primary sector as a whole experienced a rise (+7%)

despite a drop in agricultural sector performance.

While the GVA related to agriculture was observed to be lower in every drought year

as compared to the previous year, the two droughts (1999-2000 and 2002-2003) did not cause

an absolute reduction in the overall state GVA. The share of agriculture in the overall

economy gradually decreased while the share of the secondary sector, and particularly, that

of the tertiary sector, increased significantly. This trend suggests that the impact of drought

on the overall economic performance of the state economy is diminishing over time as the

impact on agriculture will be under check by other sectors of economy. As this trend is most

likely to continue, the study predicts further decline in the macro-economic impact of drought.

Accelerating an observed structural shift in the AP economy from the agriculture sector

towards the secondary and particularly tertiary sectors can be interpreted as a powerful

macro-economic drought adaptation strategy. As the study found livestock sector to be less

affected by drought than the secondary sector (due to it’s inter-dependence with the agriculture

sector), therefore, the future impact of drought on the rural economy can be also moderated

due to an increasing role of the livestock sector.

The findings of this study highlight the importance of intensifying efforts to support

economic and social development of drought-prone areas that is sustainable and resilient to

water-scarce conditions in the long-term. In addition to large variations across time series, the

study also finds the impacts of the drought to be highly variable and localized. The impacts

of measures that can be adopted by farmers are also highly location –specific. Moreover, the

study observes that in the situation of acute water deficit caused by a major drought, farmers

often “rationalize” the use of available water by reducing an area under water-intensive paddy

in favor of less water intensive irrigable dry (ID) crops. The longer-term impact of human-

induced climate change reinforces the case for shifting to less water intensive crops in the

drought-prone districts. However, at present, these practices are adopted as temporary measure

with the area of rice typically restored once the drought is over. One of the striking findings

of the analysis was a degree of variation in drought impacts on different crops in different

locations, clearly suggesting that there is a significant scope for increasing the effectiveness

of advice to farmers about undertaking drought coping measures, such as switching to

alternative crops in a response to poor monsoon. Better water conservation practices alone

(such as a change in tillage practice), without changing the cropping pattern, do not appear

to have a significant long-term effect on a large scale.

Apart from comparing the impact of drought on different sectors of the economy in AP,

this study also tries to compare the state-wide economic impact of drought with that of

cyclones and floods6. The annual average loss caused by droughts on the AP economy was

173

found to be lower than that due to cyclones or floods. However, comparison like this has to

be made with caution because losses are not measured in the same unit (loss in GVA for

droughts, and loss in public infrastructure and housing for cyclones and floods).

DROUGHT DURING 2011-12

The state experienced severe drought in 2011-12 due to erratic, uneven andnnon-receipt

of sufficient rainfall during South-West Monsoon. Due to deficiency of rainfall (-38%) in the

month of June, sowing of rainfed crops was delayed by nearly 15 to 30 days. As a result of

which in Kharif 2011, agricultural operations were badly affected (crop growth was affected

due to insufficient rainfall in the month of September (-43%) leading to low yields in many

parts of the State, affecting several rainfed crops like Cotton, Groundnut, Jowar, Maize, etc).

During North-East Monsoon also (09.10.2011 to 26.12.2011), the State has received

105.1 mm of rainfall as against the normal rainfall of 223.3 mm with a deficit of -53 per cent.

In addition net fall in ground water levels in the State has been 1.57 meters from October

2010 to October 2011. An extent of 34.24 Lakh Ha of crop area has been damaged by 50

per cent and above against the sown area of 77.9 Lakh Ha. In view of such adverse seasonal

conditions 876 Mandals (covering 22 out of 23 Districts) have been declared as drought

affected.

As per the Memorandum on Drought in Andhra Pradesh, 2011, prepared by the Revenue

(Disaster Management) Department of Government of AP, the total production loss of

agriculture crops is 3.01 million tons valued at Rs.5746.78 crores.

To summarize, droughts had and continue to have a negative impact on the economy

of AP, particularly on the performance of the agriculture sector and on the lives of the

millions of the rural poor. However, the impact of drought on the overall economic indicators

has lately been declining due to structural changes, such as the rise of the secondary and

tertiary sectors. Furthermore, the impact of drought on the rural economy is showing, on

average, some signs of moderation due to an increasing role of the less vulnerable livestock

sector. It is therefore important to build on these encouraging signs in average macro-level

indicators in order to more effectively provide targeted assistance to those whose life and

wellbeing are devastated by drought.

IMPACT OF DROUGHT ON GROUNDWATER

The discussion about impact of drought so far revolves around the question of food

needs as research on drought are, generally, conducted from meteorological, agricultural, and

food security perspectives. However, the impact of drought on water security, particularly on

ground water has received less attention as policy responses in this regard mostly concentrated

on food needs. On the other hand, food and water security are inter-related and ground water

plays a vital role in buffering the effects of rainfall variability, water shortages and difficulties



in accessing water that is available can affect domestic and productive water uses, with

knock-on effects on food consumption and production. Water insecurity can therefore affect-

directly and indirectly - wider household production and income earning opportunities, as

well as the quality and quantity of water consumption. Considering the vital role of groundwater

in the context of drought in this section an attempt has been made to study the impact of

drought on groundwater.

Table – 4

Groundwater Estimates for DPAP and Non-DPAP Districts in AP

Scheme/ Year SGD (%)

DPAP C NC Total

1985 6 39 27

1993 22 25 24

2002 13 58 48

2004 25 64 54

2007 24 60 49

2009 27 58 51

Non-DPAP

1985 10 56 29

1993 20 26 23

2002 17 59 37

2004 21 67 38

2007 20 58 33

2009 32 53 41

AP

1985 8 46 28

1993 21 26 24

2002 16 58 42

2004 22 65 45

2007 21 59 41

2009 30 57 46

Source: Reddy and Reddy (2016), pp.58-59.

Note: C=Command (ayacut); NC=Non-Command (non-ayacut); Total=Overall (both command and non- command

areas together).

The study by Reddy et.al., (2016) which covers the 1985 to 2009 observes a secular

trend in groundwater development over these years and this trend is only broken due to severe

175

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droughts or very good monsoons. The estimates provided by GoAP (Dept of Groundwater)

show that the overall Stage of Groundwater Development (SGD) in AP has gone up from 28

per cent in 1985 to 46 per cent in 2009, except during the year 1993, when it declined to 24

per cent. Groundwater development was relatively at the higher side during 2004 and 2009

(45 and 46% respectively) due to the prevailing unprecedented drought conditions. When

command and non-command areas are considered, opposite trends are observed in the case

of command and non-command areas between 1985 and 2002 % while the command areas

experienced an increasing trend, the non-command areas experienced a declining trend.

However, both command and non-command areas showed an increasing trend between 2002

and 2004, which is due to the consecutive droughts during that period. Between 2004 and

2007, there was a decline in the level of development, reverting to 2002 levels and again it

increases during 2009. The severe drought conditions during 2004 and 2009 led to groundwater

over exploitation (increased availability), especially in the non-DPAP districts and hence

2004 and 2009 are showing higher groundwater balance despite increase in use (Table-4).

In AP, the number of over exploited villages increased from 1481 in 2002 to 3449 in

2008.This number rose to 4190 during 2004 due to the severe drought conditions (Table 5).

At the state level, the number has more than doubled over a period of six years. Across the

regions, the increase almost doubled in Coastal and Rayalaseema Regions % the number of

over exploited villages went up by almost three times in Telangana. Though these figures are

based on the sample wells, they reflect the severity of groundwater depletion at the micro-

level.

As far as number of service connections are concerned, the Coastal Andhra Region

recorded only a marginal increase during 2004-05. This could be due to the severe drought

conditions prevailing between 2001 and 2004. The impact is severe in the rain-fed regions

of Telangana and Rayalaseema. Though there was substantial improvement in the number of

service connections during 2006-07, the number was much below the 2000-01 peak. Moreover,

the increase was mainly due to better groundwater situation during the post-2004 period and

cannot be attributed to the free power policy of the state (Table-6).

Table – 6

Year-wise Growth in Agricultural Service Connections across Regions

Region No. of Agricultural Service Connections during the Reference Years

1984-85 1993-94 2000-01 2004-05 2006-07

Coastal Andhra 8430 20085 22239 22586 25015

Rayalaseema 4632 23109 26001 15656 17624

Telangana 31182 58983 70053 26518 44338

Andhra Pradesh 44244 102177 118293 64760 86977

Source: Reddy and Reddy (2016), p.78

177

MITIGATION MEASURES

The mitigation of the impacts of drought has been a key area of focus of the Governments

both at Central and State level in India. The systematic Government intervention to tackle

drought started as early as during the second Five Year Plan (1956-61) when the dry farming

projects were initiated. During 1970-71, the Rural Works Programme (RWP) was formulated

with the object of creating assets designed to reduce the severity of drought, wherever it

occurred and to provide employment in the drought affected areas. Later, the RWP was re-

designated as Drought Prone Area Programme (DPAP) in 1973-74 and taken up as a centrally

sponsored scheme. Afterwards, various programmes were introduced to tackle the drought.

This is evident through programs such as the Desert Development Programme (DDP), National

Watershed Management Porgramme for Rain-fed Areas (NWDPRA), Calamity Relief Fund

(CRF) (provision of 75 per cent share of the centre and 25 per cent of the concerned state),

National Calamity Contingency Fund, National Disaster Response Fund (NDRF), State Disaster

Relief Fund (SDRF) (provision of 75 per cent share of the centre and 25 per cent of the

concerned state) and the National Agricultural Crop Insurance Scheme (NACIS), Input-

Subsidies Scheme, Debt/Loan Waiver, Accelerated Irrigation Benefit Programme (AIBP,

Jalayagnam. Apart from these centrally sponsored programmes, a large number of drought-

related initiatives have also been undertaken by the Government of AP with support by GoI

and several donors (Table-7). Examples of major programs include irrigation schemes by the

Irrigation Department, the Calamity Relief Fund, and the Food for Work Programme (FFWP)

by the Revenue Department and the Department of Agriculture. Other important initiatives

include the crop seed program of the Department of Agriculture and ground water monitoring

undertaken by the Groundwater Department. The Department of Planning, with the technical

help of Central Research Institute for Dryland Agriculture (CRIDA), has also developed, as

part of preparing a drought management plan, a real-time decision support system to forecast,

and warn the farmers about, the likely upcoming drought and suggest actions such as cropping

patterns, to mitigate these impacts. In 2004, GoAP created a new Department for Rain-

Shadow Areas Development to support the economic and social development in the most

drought affected communities.

Table 7: Government Programs and Initiatives Addressing Drought in AP

Type Programme/Scheme

Risk financing •Crop Insurance•Calamity Relief Fund•National Calamity Contingency Fund

Drought proofing • Irrigation schemes • Drought Prone Areas Programme (DPAP)• Joint Forest

Management/ Community Forest Management/FRA• Water Harvesting schemes•

Micro-irrigation projects (APMIP)• State-wide irrigation development• Watershed

Development Programme• Integrated Wastelands Development Program (IWDP)•

Andhra Pradesh Rural Livelihood Project (APRLP)• Rural Infrastructure Development

Programme• Jawahar Gram Samridhi Yojna (JGSY)• Sampoorna Grameen Rozgar

Yojana (SGRY)



Employmentgeneration • Self-employment programs on income generation• Employment Generation Mission•

Women Self Help Groups• Food for Work Programs (FFW)• Chief Minister’s

Empowerment of Youth (CMEY) program• Employment Assurance Scheme

(EAS)•Swarnajayanti Shahari Rozgar Yojana (SJSRY)•Sampoorna Grameen Rozgar

Yojana (SGRY)•Mahatma Gandhi National Rural Employment Guarantee Act

(MGNREGA)•Prime Minister’s Employment Generation Programme (PMEGP)

SOME FACTS ABOUT DROUGHT MITIGATION MEASURES IN AP

As far as state wise allocation of funds under CRF is concerned, (from the years 2005-

06 onwards) AP happens to be the 2nd highest recipient after Rajasthan attracting 9 per cent

of the total funds earmarked for all the states (Annexure-3).Similarly in case of SDRF also

it is the 2nd highest recipient after Rajasthan with a share of 8 per cent of the total funds that

are earmarked for all the states during the years 2010-12 and also projected the same for the

period 2012-15 (Annexure-4). District-wise Releases by GoAP from CRF / SDRF and NCCF/

NDRF on account of Drought during the years from 1998-99 to 20010-11 is provided in

Annexure-5.

Table – 6

Releases by GoI & GoAP from CRF / SDRF and NCCF / NDRF on account of Drought during the years

1995-96 to 2010-11 (Rs. in Crore)

Year Amount 75% of Amount released Total Amount released Additional

sought GOI’s share by GOI from by GOAP amount incurred

from GOI to CRF / NCCF / by GOAP

SDRF NDRF

1995-96 87.91 0 87.91 34.01

1996-97 93.14 0 93.14 2.84

1997-98 98.29 0 98.29 140.3 42.01

1998-99 103.3 0 103.3 97.62

1999-00 720.36 107.69 75.36 183.05 174.98

2000-01 148.54 0 148.54 240.66 92.12

2001-02 155.97 0 155.97 148.54

2002-03 674.02 163.77 59.94 223.71 588.15 364.44

2003-04 953.83 171.96 116.75 288.71 275.47

2004-05 180.56 0 180.56 479.97 299.41

2005-06 258.06 0 258.06 276.96 18.9

2006-07 536.06 270.96 56.56 327.52 104.96

2007-08 284.51 0 284.51 173.28

2008-09 298.73 0 298.73 74.31

2009-10 9747.42 313.67 365.58 679.25 627.68

2010-11 381.63 0 381.63 443.03 61.4

Source: GoAP, Disaster Management Department.

179

Though, AP is the 2nd highest recipient in the country with respect to CRF/SDRF, in

many instances the central government did not oblige to the demands of the state governments

as is evident in the table-8.

GoAP has sought assistance from GoI during 1999-00, 2002-03, 2003-04, 2006-07 and

2009-10.However, it eceived only 25,33,30,61 and 7 per cent of the requested amount

respectively during those years.

Droughts substantially increase the incidence of suicide among rural populations,

particularly among male farmers and their families. Like Karnataka, Kerala and Maharashtra,

a large number of farmer’s suicide cases were also reported from several districts of AP (2 nd

in Farmer’s suicide in India during 2006 and 3 rd in 2007) during 2006-07 (Annexure-6). Prime

Minister announced a relief package (Rs.4509.42 crore) for agrarian distressed districts of

these areas which also included financial assistance to 65 selected major/medium projects

under AIBP. Central assistance of Rs.977.68 crore released during 2009-10 up to December

2009.

TACKLING THE DROUGHT OF 2011-12

As the socio-economic impacts of drought are prolonged, magnitude of the area affected

by drought being large (with maximum number of affected people being Marginal and Small

Farmers (SMF) and Landless agricultural labourers), the State requested for Central Assistance

from National Disaster Response Fund (NDRF) amounting to Rs.2584.42 Crores. The state

is proposed to carry out the following activities with the help of this fund (a sum of Rs.148.5

Crore already incurred by the GoAP during 2010-11 towards relief expenditure):

An area of 34.24 Lakh Ha belonging to SMF (29.75 Lakh Ha belonging to SMF and

4.49 Lakh Ha Other Farmers) Other Farmers has been affected requiring an input

subsidy of Rs.735.46 Crores i.e., Rs.673.57 Cr for SMF and Rs.61.89 Cr for Other

Farmers as per SDRF Norms

Towards Horticulture crops which have been damaged by more than 50 per cent in

45,912.3 Ha belonging to SMF & Other Farmers an input subsidy requirement of

Rs.18.33 Crores is proposed. (SMF Rs.17.54 Crores and Other Farmers Rs.0.79

Crores).

The State has proposed a contingency plan to mitigate drinking water problem for

the period November, 2011 to May 2012, for which an amount of Rs.63.73 Crores

is required for Rural Water Supply (RWS) for temporary water schemes as well as

transportation of water through tankers and hiring of private source. Similarly for

Urban Water Supply (UWS) also Rs. 54.59 Crores are proposed for transportation of

water through tankers and hiring of private source.

Considering that most of the labourers already exhausted their 100 mandays of Cap

under MGNREGS, the State has proposed enhancement of the cap on mandays to



200 days for providing relief employment in the drought affected areas. A total

amount of Rs.801.3 Crores has been requested to generate additional mandays for

about six lakh households.

Animal Husbandry Department was provided any funds for mitigating drought and

therefore, Rs.211.9 Crores is proposed for implementation of contingency plan which

includes production of adequate fodder, organisation of cattle camps cattle health

care, etc.

Drought affects are severe in most vulnerable like old disabled and destitute (who are

above 60 years of age and not covered under any social security), pregnant women,

adolescent girls who are not covered under any ICDS Scheme / Anganwadi Centers;

and other destitute who are not able bodied, and therefore, cannot be provided any

work under Rural Employment Scheme. To mitigate the distress of these vulnerable

sections, who are otherwise not covered under any relief schemes gratuitous relief of

Rs.514 Cr is proposed.

In view of the increase in cost of cultivation and the scale of relief provided under

GoI being inadequate, the State Government has been extending a higher scale of

relief to various crops (agriculture & horticulture crops) towards input subsidy. As

per these State input subsidy norms a total amount of Rs.1886.26 Crores is required

as input subsidy towards agriculture crops (SMF Rs.1636.63 Crores) and Other

Farmers Rs.249.63 Crores and Rs.26.99 Crores (SMF Rs.25.25 Cr + 1.14 Cr Other

Farmers) towards damages of horticulture crops. The total requirement of assistance

as per State norms is Rs.3743.98 Crores.

The State undertakes a number of initiatives in promoting transparency in relief operations

and ensuring that the input subsidy and other relief measures reach the eligible beneficiaries.

Towards this end, joint teams are constituted for enumeration of crop damages i.e., farmer

wise and list of eligible beneficiaries is displayed on the village Panchayats and supervisory

checks on such reports is conducted by District Level Officers. The State has also taken steps

for ‘on-line transfer of input subsidy’ directly to the accounts of eligible beneficiaries as a

pilot project in districts like Anantapur.

OTHER MEASURES UNDERTAKEN TO TACKLE THE DROUGHT

Apart from the Central assistance as discussed above, the State has also initiated a

number of Drought relief Measures. Some of these include provision of drinking water by

transportation through tankers; hiring of private sources in affected urban and rural Areas;

opening of works in all drought affected Gram Panchayats under MGNREGS; enhancing the

cap on man-days under MGNREGS from 100 to 200 days; special steps to produce fodder

seed and transport of fodder from surplus areas to deficit areas; maintenance of water for

cattle in water troughs; implementation of Crop Contingency Plans in all affected districts,

181

stabilization of prices of edible oils and pulses through Public Distribution System (PDS) and

appointment of Senior I.A.S., officers for each district to monitor the drought situation from

time to time, etc.

DROUGHT MANAGEMENT STRATEGIES

While drought management programmes have been in existence for a long time, they

have not been effective due to many reasons. As per the current system, the expenditure on

relief measures takes precedence over mitigation, placing enormous burden on the State

budget and relegating the development plans. An emphasis on mitigation measures would

reduce the incidence and severity of drought, improve crop production and save resources

spent recurrently on relief.

As far as drought mitigation policy is concerned, it should have both short-term and

long-term perceptions. In this context, emphasis should be given to work out ways and means

of looking at the long-term interventions while planning short term relief measures. The

approach adopted prior to 1970s did not prove effective in mitigating the drought conditions

as the relief measures were basically temporary and ad hoc in nature. However, with the

launch of DPAP, and subsequent watershed development projects, a long-term view was

taken for evolving technological, socio-economic, institutional and organisational innovations,

which were accepted as the strategy for integrated development of drought-prone areas. This

policy improvement has paid rich dividends while dealing with the infamous droughts of

1987, 1999-2000 and 2009.

As far as implementation of drought management programmes are concerned, there is

a need to revise the strategy for implementing them in an integrated manner on a mission

basis, which can be implemented in the identified areas with active participation of the

people. At present, individual departments with a narrow focus usually run most of these

programmes in isolation, with allocations thinly scattered over a large area. There is no

sustained dialogue with the people about the benefits of these programmes and the need for

their participation and ownership. As these programmes are fragmented in their implementation,

the accountability mechanisms are very weak and all programmes experience serious lacunae.

Therefore, the existing response programmes for drought-prone areas still tend to be

limited in scope and depth. They typically focus on immediate needs such as drinking water,

food, crop and livestock loss prevention, and short-term employment. The assistance given

is generally inadequate and understandably, limited to accessible people and areas. New

approaches, strategies and methods to protect farming systems, resources and livelihood in

drought-prone areas are urged.

RECOMMENDATIONS

There is a need to establish of task forces/partnerships/consortia of all public and



private stakeholders who are involved in drought mitigation measures as their efforts are

often irregular and fragmented.

Government and concerned institutions must accord high priority to Research and

Development (R&D) of drought-resistant technologies and practices.

R&D, while being wherever appropriate systems-focused and strongly interdisciplinary,

should use participative processes to take advantage of the wisdom of farmers and their

traditional practices. Research should also focus on the integration of the technical and socio-

economic aspects.

As drought is a slow-onset disaster, strengthening of early warning, and continuous

monitoring and decision support systems are central to drought management to protect farmers’

livelihoods. Drought preparedness and mitigation measures follow these initial steps in drought

management.

Only if these components are effective, farming adjustments and corrections be made

in time; and optimal decisions taken to maximize returns/minimize losses, especially with

mid-season and terminal droughts. Drought management and a decision support system based

on RS & GIS inputs, crop growth models, drought mitigation technologies, market forecasts

and resource information are to be evolved.

A comprehensive resource analysis and study of land use in drought-prone areas may

be undertaken with consideration of water resources, potential productivity of crops,

environmental problems, land use patterns, cropping systems, water and forest resources,

livestock and fodder resources. Climate-soil-production systems need to be critically evaluated

from a sustainable resource management context in drought-prone environments.

From the economic perspective, integrated watershed management coupled with enterprise

diversification based on carrying capacity and product value addition should be the main

thrust. This line of action would ensure optimum resource use, sustainability and income

maximization.

Drought-tolerant breeds of livestock and varieties of crops must be explored to help

build drought tolerance and resilience of farming systems.

Measures to enhance perennial component of vegetation in arid and semi-arid farm

lands including agro-forestry, agri-horticulture, etc., must be incorporated.

Establishment of water (especially for human and livestock), seed, fodder and feed bank

for meeting immediate demand assumes higher priority in drought prone areas. Seeds of all

annual and perennial crops, shrubs, trees and other industrial crops as per contingency plan

of each State/region should be available in sufficient quantity in these banks. These seed

banks may be updated periodically since they may be used occasionally and private sector

may not be interested in such a risky business.

183

Coarse cereals may be included in PDS and procurement at the Minimum Support Price

(MSP) should be ensured to promote cultivation of traditional rain-fed crops in these areas.

Conservation agriculture and rain-fed farming systems need to be prioritized, encouraged

and incentivized in developing rain-fed areas. Mechanization is highly essential due to exigency

of completion of farming operations within limited period in drought affected areas. In view

of predominance of small and marginal poor farmers, renting or custom hiring services may

be created.

It may be made mandatory that harvested rain water and augmented ground water

resources should be used through micro-irrigation and other efficient water saving techniques

for enhancing productivity of scarce water.

Need for evolving scientific but practical crop zoning concept suitably linked with

marketability to adjust demand of water to the availability for its efficient utilization. Cultivation

of high water demanding crops should be discouraged in water scarce areas and some regulatory

measures may be evolved for rational use of water in such areas.

Policies at all levels should encourage the uptake of more water efficient technologies

such as drip irrigation and rehabilitation of traditional water storages.

The forest management policy need to be re-visited for the fringe forests located within

a radius of 3 km from the village boundaries to ensure synergy between the conservation of

forest and livelihood needs of the local people. Special efforts are needed to re-orient the

management of these forests for recharging and rain water harvesting for drinking, agriculture

and other local needs which will benefit the forests to regenerate and create a win-win

situation.

There is a need to ensure smooth flow of information for drought preparedness and

response (eg, new climate research findings, new land and water management practices, new

drought tolerant breeds and varieties, social and community processes to help communities

prepare for drought, what to do when drought is forecast, and ways to purify drinking water).

At the national level, policies may be enacted to support a National Drought Mitigation

Plan (NDMP), involving all the Ministries and concerned Organizations such as NGOs. As

a focal point, a central nodal agency will coordinate and maintain the NDMP.

Drought support policies, appropriate in the particular circumstances, should encourage

self-reliance by farmers. In other words, drought preparedness including safety nets, insurance,

etc. should be factored into their normal farm management plans and activities.

Authorities may be encouraged to develop/improve drought declaration/revocation

processes and to share the information on these processes, recognizing that although they are

commonly based on threshold criteria for rainfall deficits and other relevant factors, they may

be location-specific and operate differently at different levels, and wherever possible they

have local community involvement through processes that help maintain morale in the face

of drought.



Financial support must be provided for strategically planning and implementing water

conservation programmes as a part of ongoing budgetary arrangements for drought mitigation

programmes.

Creating public awareness about the drought and educating on efficient use of water

through information media is necessary.

REFERENCES

GoAP (2011), Memorandum on Drought in Andhra Pradesh , Revenue Disaster Management Department,

Hyderabad, December.

GoI (2009), Manual for Drought Management, 2009, Ministry of Agriculture, Page.22, November.

Nadkarni M.V. (1985), Socio-Economic Condition in Drought Prone Areas: A Benchmark Study of Drought

Districts in Andhra Pradesh, Karnataka and Tamil Nadu. Concept Publication. New Delhi.

Nagarajan, R. (2003), Drought-Assessment, Monitoring, Management and Resource Conservation. Capital

Publishing Company, New Delhi.

PACS (2008), Drought in India: Challenges & Initiatives, Poorest Areas Civil Society Programme (PACS)

2001-2008, PACS Programme, New Delhi.

Reddy M Srinivasa, Sanjit Kumar Rout and E.B. Uday Bhaskar Reddy (2008), The Asian Economic Review,

Journal of the Indian Institute of Economics, Vol.50, No.3, December.

Reddy M Srinivasa, Sanjit Kumar Rout and V Ratna Reddy (2016), Groundwater Governance, Development,

Degradation & Management (A Study of Andhra Pradesh), Rawat Publications, Jaipur.

World Bank (2005), Drought in Andhra Pradesh: Long term impacts and adaptation strategies Findings and

observations from the quantitative analysis, South Asia Environment and Social Development Department,

September.

185

ANNEXURE

Table – 1

Area Affected by Drought in India from 1876 to 2009

Year Area Affected % Area of the Category Ranking

(Million sq. km.) Country Affected

1876 0.49 15.8 Slight 34

1877 2.03 64.7 Calamitous 2

1883 1.03 32.8 Moderate 13

1884 0.7 22.2 Slight 26

1885 0.48 15.4 Slight 35

1891 1.15 36.7 Moderate 9

1896 0.68 21.7 Slight 27

1899 1.99 63.4 Calamitous 3

1901 0.89 28.5 Moderate 20

1902 0.54 17.1 Slight 33

1904 0.98 31.1 Moderate 16

1905 1.09 34.7 Moderate 10

1907 0.85 27.2 Slight 22

1911 0.97 30.8 Moderate 17

1913 0.7 22.3 Slight 25

1915 0.63 20.2 Slight 30

1918 2.16 68.7 Calamitous 1

1920 1.22 38.8 Moderate 8

1925 0.8 25.5 Slight 24

1928 0.67 21.4 Slight 28

1936 0.86 27.6 Slight 21

1941 1.01 32.3 Moderate 15

1951 1.04 33.2 Moderate 11

1952 0.81 25.8 Slight 23

1965 1.35 42.9 Moderate 6

1966 1.01 32.3 Moderate 14

1968 0.45 20.6 Slight 29

1969 0.62 19.9 Slight 31

1971 0.42 13.3 Slight 36

1972 1.39 44.4 Severe 5



Year Area Affected % Area of the Category Ranking

(Million sq. km.) Country Affected

1974 0.92 29.3 Moderate 19

1979 1.24 39.4 Moderate 7

1982 1.04 33.1 Moderate 12

1985 0.95 30.1 Moderate 18

1986 0.6 19 Slight 32

1987 1.55 49.2 Severe 4

1992 - - Moderate 133

- - Severe 36

2002 - - Severe -

2009 - - Severe -

Source: Indian Council of Agricultural Research, data compiled and analysed in different years, New Delhi.

187

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Table – 3

State wise allocations to CRF during the years 2005 to 10 (Rs. in Crore)

Sl.No Name of the State 2005-06 2006-07 2007-08 2008-09 2009-2010 Total

1 Rajasthasn 415.64 436.42 458.25 481.16 505.21 2296.68

2 Andhra Pradesh 344.08 361.28 379.35 398.31 418.22 1901.24

3 Orissa 301.54 310.24 319.38 328.97 339.03 1599.16

4 Uttar Pradesh 295.94 304.48 313.45 322.87 332.75 1569.49

5 Gujarat 246 258.3 271.22 284.78 299 1359.3

6 Madhya Prradesh 254.23 261.58 269.29 277.39 285.88 1348.37

7 West Bengal 234.73 241.5 248.62 256.09 263.92 1244.86

8 Maharashtra 222.9 234.05 245.75 258.04 270.94 1231.68

9 Tamil Nadu 209.08 219.53 230.51 242.03 254.13 1155.28

10 Assam 193.06 198.62 204.48 210.62 217.06 1023.84

11 Punjab 146.03 153.33 160.99 169.04 177.49 806.88

12 Bihar 148.93 153.23 157.74 162.48 167.45 789.83

13 Haryana 124.38 130.6 137.13 143.99 151.18 687.28

14 Jharkhand 126.07 129.71 133.53 137.55 141.75 668.59

15 Karnataka 114.66 120.39 126.41 132.73 139.36 633.55

16 Chhattisgarh 111.75 114.98 118.35 121.9 125.62 592.6

17 Himachal Pradesh 100.69 103.6 106.65 109.86 113.21 534.01

18 Uttaranchal 94.69 96.59 98.58 100.67 101.85 492.38

19 Kerala 85.5 89.77 94.26 98.98 103.91 472.42

20 Jammu & Kashmir 86.46 88.96 91.58 94.33 97.21 458.54

21 Arunachal Pradesh 28.3 29.12 29.97 30.87 31.81 150.07

22 Sikkim 17.53 18.04 18.57 19.13 19.7 92.97

23 Tripura 12.85 13.22 13.61 14.02 14.44 68.14

24 Meghalaya 11.29 11.61 11.95 12.31 12.68 59.84

25 Mizoram 6.58 6.77 6.97 7.18 7.4 34.9

26 Manipur 5.56 5.72 5.89 6.06 6.25 29.48

27 Nagaland 3.83 3.94 4.05 4.17 4.3 20.29

28 Goa 2.11 2.21 2.32 2.44 2.56 11.64

India 3944.41 4097.79 4258.83 4427.97 4604.31 21333.31

Source: GoAP, data compiled in different years, Disaster Management Department; Note: Central share @75% and

State’s share @25%.

189

Table – 4

State wise allocations SDRF 2010-15 (Rs. in Crore)

Sl.No State 2010-11 2011-12 2012-13 2013-14 2014-15 Total 2010-15

1 Rajasthan 600.66 630.69 662.22 695.33 730.10 3319.00

2 Andhra Pradesh 508.84 534.28 560.99 589.04 618.49 2811.64

3 Gujarat 502.12 527.23 553.59 581.27 610.33 2774.54

4 Maharashtra 442.69 464.82 488.06 512.46 538.08 2446.11

5 Madhya Pradesh 392.75 412.39 433.01 454.66 477.39 2170.20

6 Orissa 391.58 411.16 431.72 453.31 475.98 2163.75

7 Uttar Pradesh 385.39 404.66 424.89 446.13 468.44 2129.51

8 Bihar 334.49 351.21 368.77 387.21 406.57 1848.25

9 West Bengal 304.83 320.07 336.07 352.87 370.51 1684.35

10 Tamil Nadu 293.52 308.20 323.61 339.79 356.78 1621.90

11 Assam 263.77 276.96 290.81 305.35 320.62 1457.51

12 Jharkhand 259.45 272.42 286.04 300.34 315.36 1433.61

13 Punjab 222.92 234.07 245.77 258.06 270.96 1231.78

14 Haryana 192.90 202.55 212.68 223.31 234.48 1065.92

15 Jammu & Kashmir 172.46 181.08 190.13 199.64 209.62 952.93

16 Karnataka 160.96 169.01 177.46 186.33 195.65 889.41

17 Chhattisgarh 151.32 158.89 166.83 175.17 183.93 836.14

18 Kerala 131.08 137.63 144.51 151.74 159.33 724.29

19 Himachal Pradesh 130.76 137.30 144.17 151.38 158.95 722.56

20 Uttarakhand 117.66 123.54 129.72 136.21 143.02 650.15

21 Arunachal pradesh 36.74 38.58 40.51 42.54 44.67 203.04

22 Sikkim 22.75 23.89 25.08 26.33 27.65 125.70

23 Tripura 19.31 20.28 21.29 22.35 23.47 106.70

24 Meghalaya 14.65 15.38 16.15 16.96 17.81 80.95

25 Mizoram 8.55 8.98 9.43 9.90 10.40 47.26

26 Manipur 7.22 7.58 7.96 8.36 8.78 39.90

27 Nagaland 4.97 5.22 5.48 5.75 6.04 27.46

28 Goa 2.96 3.11 3.27 3.43 3.60 16.37

Total 6077.30 6381.18 6700.22 7035.22 7387.01 33580.93

Source: GoAP, data compiled in different years, Disaster Management Department, Hyderabad.

Note: Central Share @75% and State share 25%



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THEME - IV

ISSUES RELATED TO INDUSTRIALDEVELOPMENT, SPECIAL ECONOMIC ZONES

AND ENVIRONMENTAL ISSUES INANDHRA PRADESH

ARTICLE / 27

PERFORMANCE OF GRANITE INDUSTRY IN

CHITTOOR DISTRICT OF ANDHRA PRADESH

Vasu Jalari & M. Devarajulu

INTRODUCTION

Andhra Pradesh is one of the major producers of granite in India and handful of quarry

owners, skilled workers and artisans from Kuppam in Chittoor district controlled the art of

chiselling, making monuments of granite products and exports, until some form of demand

and international market was developed in the late 1970’s. Financial institutions gave finance

liberally to the granite entrepreneurs, who ever had approached them with a plan to establish

granite processing unit within the state. The change in approach in tune with the policy

change has resulted in increasing grant of funds to granite firms.

The Government of India through the Granite Development Council, brought in, “Granite

Conservation and Development Rules-1999” effective from 1-6-1999 for sustainable growth

and development of granite industry in the country as well as in state. The State of Andhra

Pradesh intends to modify its APMMC Rules in tune with Granite Conservation and

Development Rules-1999 to stabilize the initial advantage gained by the state with popular

orientation and encouragement. The Andhra Pradesh government has recognized granite as

one of the four focused minerals in its Vision-2020 and envisages a growth rate of 10 to 15

per cent.

GRANITES IN ANDHRA PRADESH

Several occurrences of commercially known granites of acceptable quality are found in

different igneous and metamorphic terrain of Andhra Pradesh. Seventeen out of twenty three

districts are known for the occurrence of different varieties of granites, which shows the vast

and inexhaustible potential of granite resources in the state. Different types of rocks suitable

for the use as decorative and dimensional stones are found in Chittoor, Prakasam, Ananthapur,

Guntur, Srikakulam, Vijayanagaram and Kurnool districts of Andhra Pradesh.

The Black granite varieties are available predominantly in the district of Prakasam and

to some extent in Anantapur, Kurnool and Chittoor districts, while the coloured like Pink,

Post-Doctoral fellow, Dept. of Economics, Sri Venkateswara University, Tirupati.Professor, Dept. of Economics, Sri Venkateswara University, Tirupati.


Grey, Blue, White and other multi-coloured granite reserves are found in greater quantities

in the districts of Anantapur, Kurnool, Chittoor, Prakasam, Guntur, Srikakulam, Visakhapatnam

and Vijayanagaram.

Recently Geological Survey of India (GSI) carried out extensive surveys and identified

commercially viable deposits of granite in parts of various districts in Andhra Pradesh. The

surveys have brought out new deposits of Black Galaxy, Yellow, Black, Imperial Red, American

Green, Multi-Colour, Blue, White and English Teak at different localities. The state Department

of Mines and Geology has also carried out inventory and village wise survey. Tentative

estimated reserves of commercially viable granite deposits of around 72.18 lakh tones were

found granites in Andhra Pradesh. The major production of granite comes from Prakasam,

Srikakulam and Chittoor districts. About 80 to 90 per cent of the granite firms are small scale

firms and the remaining granite firms are captive and mechanized in Andhra Pradesh.

GRANITE INDUSTRY IN ANDHRA PRADESH

Andhra Pradesh contributes about 25 to 30 per cent of the granite exports of India,

mainly consisting of Jet black, Kuppam Green, Black Galaxy, Srikakulam Blue and White,

Tan Brown, Chilly Red, English Teak, AnantapurGray types and small quantities of other

lesser known varieties. The state industry, on its own, discovered and is trading in 15 to 20

varieties of colour out of 120 varieties found in India. The total dispatches have been regularly

increasing for the last 10 years. About 50 to 60 per cent of the production is in the form of

raw blocks which are exported from the state to different destinations either in raw or

processed form. The remaining are being processed within the state and exported to cater to

the international, national and local markets. The ultimate market destination of the Andhra

Pradesh granites can be gauged with the international popularity and usage in most of the

buildings and monuments as decorative stone. The capacity increase in processing doesn’t

match the exports and demand in the international market, but earning substantial foreign

exchange for the country. However, the development and performance of the industry started

deteriorating from the mid-nineties due to various reasons, the foremost being inadequate and

discontinuous supply of gang saw size blocks, power supply, working capital and high cost

of transportation.

THE PRESENT STUDY

The development of any area can never be a smooth process and particularly the granite

industry has to face numerous problems with the changed environment in small scale industrial

sector. Most of the researchers have examined problems of mineral industries as a whole

including granite industry but very few researchers have concentrated their attention on

granite industry in particular. However, this study is intended to appreciate and assess the

relative advantages from available resources of the Chittoor district for planning industrial

development, particularly granite industry. Since the district lies in the heart of famine zone,

197

the granite industry is very suitable for achieving faster industrial development in Chittoor

district. Though the government is offering some incentives and adopting favorable mineral

policies and programs for the development of granite industry, the growth and progress of the

granite industries in Chittoor district or elsewhere in the State has been relatively slow and

not very encouraging.

Most of the granite units are operating under certain technical and economic handicaps.

Though the granite industries facing a number of problems in the district, it is income and

employment generating industry in the study area. The study is mainly designed to analyze

the growth pattern, location aspects, entrepreneurial evolution, structure of manpower and

capital, the operational conditions and problems of granite industrial units in Chittoor district.

These aspects have been studied with a view to find solutions to the problems and at the same

time to offer strategies to be adopted and followed for achieving higher growth rate of granite

units with desirable growth in employment opportunities.

OBJECTIVES

The present paper aims at the following objectives:

1. To analyse the performance of granite industry in Chittoor district

2. To study the ownership and employment pattern of granite industry in Chittoor

district

METHODOLOGY

Chittoor district in Andhra Pradesh is taken as the study area as it is one of the districts

in Andhra Pradesh having the highest number of granite units. Granite industry has brought

some significant improvement in Chittoor district due to conducive atmosphere, availability

of capital, suitable entrepreneurship, cheap labour, transport facilities, and being able to

procure raw material getting from neighbouring states like Tamil Nadu and Karnataka.

While designing the study, it was decided to study only the information those units

which have already been established under the definition of small scale industry in Chittoor

district.

The study is mainly based on the secondary data collected from different sources.

Secondary data was collected from the Directorate of Industries, District Industries Centre

(DIC) of Chittoor district, Ministry of Mines and Indian Bureau of Mines (IBM).

REFERENCE PERIOD

The study has a reference period from 2000-01 and2010-11 relating to the coverage of

secondary data information related to granite industry in Chittoor district.

Performance of Granite Industry in Chittoor District • VASU JALARI & M. DEVARAJULU


SCOPE OF THE STUDY

The study highlights the various major problems faced by the granite industry in general

and suggests mechanisms to improve the economic and operational efficiency and performance

of the granite units in Chittoor district. Further, this study is confined to only to study the

performance of granite industrial units in small scale sector in Chittoor district and does not

study the other type of industrial units in small scale sector that are also functioning in the

study area. This is, because, small scale granite units entirely different from other type of

small scale industrial units- in terms of technology, capital and investment, labour and fuel/

power techniques and mechanisms. However, conscious effort has been made for eliciting

detailed information about the economic analysis of granite units in Chittoor district.

PERFORMANCE OF GRANITE INDUSTRY IN CHITTOOR DISTRICT

Chittoor district with vast mineral potential has worked out certain strategies to explore,

exploit and develop the granite industrial sector with the constructive cooperation of both

private and public sectors. The district has focused on the inventory of mineral resources, key

issues of legislation, objectives and strategies in time with the National Mineral Policy (2008)

in accelerating the growth in the liberal regime thereby leading to the overall development

of the granite industry.

Department of Mines and Geology in Chittoor district is always innovative to improve

the mineral administration for the development of granite industry, through interaction with

the district level officers and the stakeholders. Government has also taken measures required

in the right earnest with the practice involvement of all the stakeholders. A lot of thrust is

given to pre-fixed time disposal of mineral concession applications to bring additional areas

under granite mining and also for resource mobilization. Government extends support for

grounding of high-tech and innovative value added mineral projects under single window

industrial clearance.

The granite industry has an important role in small scale industrial sector for industrial

development in economy of the district. The Chittoor district with 240 working granite units

and vast resources of granite is making all out efforts to exploit and optimize granite production

establishment in small scale sector and undertake value addition. Major granite deposits are

available in Chittoor, Gudipala, Anupalli, Chandragiri, Tirupati, Kuppam and Western parts

of the district.

The granite industry produced 80.98 thousand tonnes of the granite and its value was

Rs.2850.09lakh during 2010-11 in Chittoor district. Now a days the demand for the granite

stone increased in the Chittoor district due to the usage of granite stone in construction

purposes in the district. There is existence of granite industrial units, both in large or medium

and small scale sectors in the district. But most of the granite units are working under the

small scale industrial sector in the district. An overview of the number of granite industries

in Chittoor district is presented in Table-1.

199

Table-1

Year-wise Working and Non-working Granite Industries in Chittoor District

Sl. No.(1) Years(2) Working(3) Non-working(4) Total(5) Column 3 Column 4 as

as a % of a % column

column 5(6) 6(7)

1 2000-01 153 17 170 90.00 10.00

2 2001-02 161 25 186 86.56 13.44

3 2002-03 164 31 195 84.10 15.90

4 2003-04 169 21 190 88.95 11.05

5 2004-05 180 27 207 86.96 13.04

6 2005-06 193 14 207 93.24 6.76

7 2006-07 210 24 234 89.74 10.26

8 2007-08 224 29 253 88.54 11.46

9 2008-09 222 30 252 88.10 11.90

10 2009-10 231 20 251 92.03 7.97

11 2010-11 240 25 265 90.57 9.43

Source: Dept. of Mines and Geology, Chittoor

The Table-1points out that there are working and non-working granite units in Chittoor

district. The data reveals that the total number of working units has increased from 153 units

in 2000-01 to 240 units in 2010-11. On the other hand, the total number of non-working units

increased from 17 units in 2000-01 to 25 units in 2010-11. Therefore, the total number of

working and non-working units has increased from 170 in 2000-01 to 265 units by 2010-11.

Hence it is observed that development of granite units in Chittoor district is slow during the

period 2000-01 to 2010-11.

Most of the granite units are owned and operated by forward and backward social

groups in the district as shown in Table-2

Table – 2

Social category-wise Distribution of Working Granite Units in Chittoor District 2010-11

S. No Social Category Number of Units Percentage to Total

1. Open Category 211 87.92

2. Backward Castes 24 10.00

3. Scheduled Caste 5 2.08

4. Scheduled Tribes Nil Nil

Total 240 100.00




Out of the total 240 Granite units, 87.92 per cent of the units belong to the persons

belonging to open category castes. The units owned by persons of backward classes account

for 10 per cent and only 2.08 per cent of the units are owned by the scheduled castes. The

Schedule Tribes, do not own granite units in the study area. This shows that majority of the

Granite units are owned and managed by forward castes and some by the backward castes.

The distribution of granite units by social category-wise is very disappointing in Chittoordistrict.

PATTERN OF OWNERSHIP

Table – 3

Distribution of Granite Units by the Type Organization in Study Area by 2010-11

Sl. No Type of Organization No. of Units Percentage to Total

1. Proprietary 114 47.50

2. Partnership 118 49.17

3. Private Limited 8 3.33

Total 240 100.00

Source: Asst. Geologist, Dept. of Mines and Geology, Chittoor

The Table-3 shows that out of 240units, 47.50 per cent are proprietary concerns, 49.17

per cent are partnership firms and the remaining 3.33 per cent are private limited companies.

The data reveals that most of the granite industrial units are partnership concerns, proprietary

units and are capital – intensive in nature.

LOCATION OF GRANITE UNITS

Table – 4

Geographical Distribution of Granite Units in Chittoor District - 2010-11

Sl. No Name of the Mandal No. of Units Percentage to Total

1. Bangarpalyam 13 5.42

2. Chittoor (Rural & Urban) 104 43.33

3. G. D. Nellore 14 5.83

4. Gudipala 31 12.92

5. Irala 2 0.83

6. Penumur 2 0.83

7. Yadamari 19 7.92

8. Tirupati (Rural& Urban) 9 3.75

9. Renigunta 7 2.92

10. B. N. Kandriga 2 0.83

201

Sl. No Name of the Mandal No. of Units Percentage to Total

11. Nagari 1 0.42

12 Madanapalle 4 1.67

13 Palamaner 11 4.58

14 Kuppam 21 8.75

Total 240 100.00

Source: General Manager, District Industries Centre, Chittoor

Among the revenue mandals in Chittoor district, granite industry is located in 14 mandals

as shown in Table-4.

The Table-4 shows that there were 240 Granite units functioning in different mandals

of Chittoor district as on 2010-2011. Among the mandals, Chittoor stands first place with

43.33 per cent of granite units and Nagari occupies the last position with the 0.42 per cent.

Gudipala Mandal is in second position. It has 12.92 per cent of granite units.8.75 per cent

of the units are located in Kuppam and remaining 11 mandals have 35.0 per cent of units

located in Chittoor district.

TRENDS IN FIXED INVESTMENT IN GRANITE INDUSTRY

Table-5 gives the details of trends in fixed investment that granite industries have in

Chittoor district.

Table – 5

Fixed Investment on Granite Units in Chittoor District 2001 - 2011

Sl. No Year Fixed Investment (Rs. In. Crore)

1. 2000-01 36.10

2. 2001-02 39.15

3. 2002-03 43.02

4. 2003-04 47.12

5. 2004-05 50.55

6. 2005-06 56.64

7. 2006-07 61.05

8. 2007-08 68.00

9. 2008-09 79.47

10 2009-10 91.97

11 2010-11 96.06

Source: 1. Dept. of Mines and Geology, Chittoor

2. District Industrial Centre, Chittoor



The fixed investment of granite industrial units (in. crore) in Chittoor district is shown

in Table-5. The investment in granite industrial units has increased from Rs.36.10Crore in

2000-01 to Rs.96.06Crore by 2010-11. Therefore, the granite industrial units in Chittoor

district have registered considerable growth in terms of fixed investment over the years.

EMPLOYMENT GENERATION IN GRANITE UNITS

The Table-6 presents the employment provided by the granite units in the study area.

Table – 6

Employment Generated by Granite Units in Chittoor District from 2001 to 2011

Sl. No Year Employment (In. Persons)

1 2000-01 840

2 2001-02 905

3 2002-03 978

4 2003-04 1024

5 2004-05 1065

6 2005-06 1040

7 2006-07 1065

8 2007-08 1154

9 2008-09 1427

10 2009-10 1764

11 2010-11 2034


The employment provided by the granite industrial units has increased from 840 persons

in 2000-01 to 2034 persons by 2010-11. Hence the employment opportunities are increasing

significantly in the granite industrial units over the years. Therefore, the granite industry and

its development certainly led to more employment opportunities in the district.

PRODUCTION OF GRANITE

Table-7 presents the production of granite and its value of in Chittoor district.

The Table-7 reveals the details of production of granite in Chittoor district and the data

reveals that in physical terms, the granite industry could produce highest quantity at 81.25

thousand tonnes during the year 2005-06 and in terms of value of granite, it was highest

during the year 2008-09. However, during the years 2009-10 and 2010-11, the production and

value of granite did not touch the production and value of granite that was recorded during

the previous years (2005-06 and 2008-09).

203

Table – 7

Production and Value of Granite in Chittoor District

Sl. No Year Production(In. Tonnes) Value

(Rs. In. Lakh)

1 2000-2001 50061.7 1213.33

2 2001-2002 18648.76 791.31

3 2002-2003 40872.63 1325.52

4 2003-2004 63825.67 1545.42

5 2004-2005 66788.19 1670.67

6 2005-2006 81253.36 2111.06

7 2006-2007 78344.57 2092.43

8 2007-2008 70891.56 1821.53

9 2008-2009 68119.68 5698.37

10 2009-2010 65990.52 2226.51

11 2010-2011 80983.5 2850.09

Source: Dept. of Mines and Geology, Chittoor.

PROBLEMS OF GRANITE INDUSTRY

1. The non-availability of raw materials at standard prices is one of the significant

problems for the granite industry in the small scale sector.

2. The availability of local skilled labourers is the most important problem. Due to non-

availability of skilled labourers, the entrepreneurs are frequently forced to employ

unskilled workers and train them for a few months to improve their skills.

3. One of the major handicaps of the granite industry in small scale sector is the non-

adoption of sophisticated technology and modern equipment / machinery like stone

testing tools, stone drillers, rough/crude stone cutting machines, stone edge finishing

machines and stone lifting tools.

4. Frequent power-cuts affect in the study area granite units and the workers have to

remain idle during their working hours due to power-cuts which result in escalation

of cost of production.

5. Marketing problems of granite industry mostly arise due to lack of standardization,

inadequacy of products and packaging materials, lack of precision and inconsistency

in the finishing of the products.

6. The important problems of transportation include increase in transport costs and

inconvenience due to engaging different modes of transport before the products are

sent to the market.



SUGGESTIONS

On the basis of analysis made in the paper, a few suggestions are put forward for the

accelerated growth of granite industry in Chittoor district.

Efforts are needed from the government agencies to overcome the problems of lack

of skilled labour, power and competition by providing necessary mechanism.

Attempt should be made to provide easy, cheap and adequate finance and transportation

facilities to granite units. Providing transportation subsidy to granite industry is very

essential.

Special care should be taken by the government to equip the disadvantaged groups

with enough aid and liberal finances with concessional rates to undertake the starting

of granite industrial units in the district.

The government should take action to ensure that liberal financial assistance through

financial institutions to meet the working capital needs.

It is necessary to establish manpower training centers for skilling the unskilled labourers

working in granite industries.

The suggestions given above, if implemented sincerely, certainly eases out the problems

of granite industry in the small scale sector and help for its development and better performance

to a large extent in Chittoor district of Andhra Pradesh.

CONCLUSIONS

The study highlights the suitability and relevance of granite industrial units in Chittoor

district’s economic development in the context of resource constraints, particularly capital

resources. The granite industrial units are less capital intensive and labour absorbing. The

findings of the study reveal that the performance and development of granite industry in terms

of generation of employment, increase in production and profitability was not up to the

optimum level. It was because of several problems faced by the granite industry which require

attention of the policy makers. Suitable strategy has to be evolved to develop granite industry,

make them technologically strong and to help them to compete with other types of units in

SSI sector in the context of globalisation.

REFERENCES

1. Ministry of Mines and Minerals (development and Regulation) Act 1957. “Granite Reserves in India”

2. T.E. Raja Simhan - “Granite Industry Seeks Fiscal Relief to Survive Recession”– Businessline (Dated:

13.03.2009)

3. Recession Hits Granite Exports from Srikakulam –www.Businessline.com (Dated: 16-03-2009)

4. T.E. Raja Simhan-Draft Granite Policy Fails to Address Key Issues, Says Industry,

www.businessline.com (Dated: 17-07-2009)

205

5. N.V. Bhagavantha Reddy (Assistant Director Mines and Geology,) 2009,The Global Recession had

AffectedtheirRevenue Collections

6. K.M. Dayashankar, “Recession affects granite industry”. The Hindu-23-january-2009

7. VenugopalKarva”Global Economic Crisis had affected the Granite Business in Karimnagar District”–

(2009), www.hindubusinessline.com

8. Andhra Pradesh Minor Mineral Concession Rules, 1966

9. Granite Conservation and Development rules, 1999

10. Department of Mines and Geology, Government of Andhra Pradesh

11. Commissioner of Industries, Government of Andhra Pradesh

12. District Industry Centre, Chittoor

13. Statistical Abstract - 2011, Chief Planning Officer (CPO), Chittoor

14. Various Annual Reports, Department of Mines and Geology, Chittoor



ARTICLE / 28

INDUSTRIAL AIR POLLUTION AND ITS EFFECTS

ON HEALTH – A CASE STUDY OF CHITTOOR

DISTRICT OF ANDHRA PRADESH

C. Gangaiah, M. Ramanjaneyulu & M. Prabhu

INTRODUCTION

Clean and pure air is very essential for human health and survival. The air we breathe

is an essential ingredient for our wellbeing and a healthy life. Unfortunately polluted air is

common throughout the world (EPHA, 2009). Air is one of the most important constituents

of man’s environment. An average human being requires about 12kg of air each day, which

is nearly 12 to 15 times greater than the amount of food the consumers, Polluted air contains

one, or more, hazardous substance, pollutant, or contaminated that creates a hazards to

general health. Air pollution in cities causes a shorter lifespan for city dwellers.

According to Mishra (2003) rapid growth in urban population, increasing industrialization,

and rising demand for energy and motor vehicle are the worsening air pollution levels. He

added other factors, such as poor environmental regulation, less efficient technology of

production, congested roads, and age and poor maintenance of vehicles, also add to the

problems.

Air pollution has acquired critical dimensions and the air quality in most Indian cities

that monitor outdoor air pollution fail to meet WHO guidelines for safe levels. The levels of

PM 2.5 and PM10 (Airborne particles smaller than 2.5 micrometers in diameter and 10

micrometers in diameter) as well as concentration of dangerous carcinogenic Substances such

as Sulphur Dioxide (SO2) and Nitrogen Dioxide (NO

2) have reached to the alarming proportions

in most Indian cities, putting people at additional risk of respiratory diseases and other health

hazards.

According to Prakash Jawadekar, Minister of Environment and Forest, Govt. of India

(2015) every year 2 crore people are affected by respiratory problems and diseases such as

Suffocation, Asthma, lung infection, Cancer, Allergy and Skin diseases) and 2006 to 2015

35,616 lives were lost due to the air pollution and most of the cases were from West Bengal,

Professor, Department of Economics, S.V.University, TirupatiProfessor, Department of Economics, Banguluru University, Banguluru.Post Doctoral Fellow, Department of Economics, S.V.University

207

and newly bifurcate states Andhra Pradesh and Telangana occupied second place. Thus air

pollution is generally a disequilibrium condition of air caused due to the introduction of

foreign elements from natural and man-made sources to the air so that it becomes injurious

to biological communities.

CONSTITUTIONAL PROVISION AND ENVIRONMENT

Very few countries in the world have incorporated specific provisions relating to

environment protection in their Constitutions. India is one among them. Prior to 42 nd

Amendment in the year 1976 there was no direct provision relating to environment in the

Constitution of India, the principal of Stockholm Declaration, which was held in the year

1972, were incorporated in the Constitution of India through 42 nd Amendment. Article 48-A

and Article 51-A were the result of 42nd Amendment. Article 48-A was introduced in the IV

Chapter, which deals with the Directive Principles of State Policy. “The State shall endeavor

to protect and improve the environment and to safeguard the forests and wildlife of the

country”. “It shall be the duty of every citizen of India to protect and improve the natural

environment including forests, lakes, river and wildlife, and to have compassion for living

creatures “.

OBJECTIVE OF THE STUDY

1. to identify the sources of air pollution.

2. to identify the impact of air pollution on health of the people; and

3. to analyze the effects (diseases) of air pollution on the family members of the

respondents households.

METHODOLOGY

Purposive sampling method has been adopted in the present study and according to the

information provided by the office of Andhra Pradesh Pollution Control Board, Tirupati

branch in Chittoor District; there are seven types of polluting industrial units in Chittoor

District. Depending upon the level of pollution caused by effluents discharged by these units,

they are classified into three categories, viz. Red, Orange and Green units. The Red category

units are highly polluted units, the Orange category units are relatively less (moderate) polluted

units and Green category units are pollution free units. For the purpose of present study,

Chittoor district, which falls under the Red category of industrial pollution was purposely

selected for the investigation. From each of the 7 types of Red category units, one unit has

been purposively selected for the study. The village and households residing in and around

these units were listed out carefully. From each category about 40 households were selected

using Simple Random Sampling method without Replacement (SRSWR). The sample size of

the study is 280 households. The questionnaire was designed and pre-tested and data was

collected by personal interview method.

Industrial Air Pollution and its Effects on Health • C. GANGAIAH, M. RAMANJANEYULU & M. PRABHU


SOURCES OF AIR POLLUTION

The different industrial units which are causing air pollution are presented in the

Table 1.

Table – 1

Sources of Air Pollution in the Study Area

S.No. Sources of Category of Industries

Air Pollution

Agro Forest Textile Mineral Engineering Animal Chemical Total

Based Based Based Based Based Based Based

1 Industrial Smoke, dust 37 36 39 40 28 38 38 256

(14.45) (14.06) (15.23) (15.62) (10.93) (14.84) (14.84) (91.42)

2 Domestic Smoke, dust 3 4 1 - 12 2 2 24

(12) (16.66) (4.16) (50.00) (8.33) (8.33) (8.57)

3 Total 40 40 40 40 40 40 40 280

(100.00 )

Note : Figures in parentheses indicate the Percentage to total

Source: Field survey data

The table 1 reveals that there are two major sources of air pollution – industrial and

domestic sources. The seven industrial activities are the major sources of air pollution in the

study area, besides domestic smoke and dust. It was observed that among 280 sample

households, 256 households (91.4 per cent) were found suffering from industrial smoke and

dust and 24 households from domestic smoke and dust. Different industries, textiles, mineral

animal based and chemical based units are the major sources of air pollution.

IMPACT OF AIR POLLUTION (PROBLEMS)

The impact of air pollution caused by the different industrial units is presented in the

Table 2.

The table 2 portrays that 954 household members of the 1388 members (68.73) were

found affected by industrial pollutants located in and around of the units. Majority of the

sample population (31.97%) were found suffering from suffocation, nearly 238 respondents

(24.94 %) were suffering from Allergy, about 179 respondents (18.76 %) were suffering from

common cold and cough, 156 respondents (16.35 %) were suffering from Eye irritation and

about 76 respondents (7.56) were suffering from hair fall. Moreover, majority of the respondents

in Mineral and chemical based industry were suffering a lot due to the Industrial pollutants.

The data indicate that majority of the members of the sample households 56.9 per cent) were

found affected by suffocation and allergy in the study area.

209

Ta

ble

– 2

Impac

t o

f A

ir P

oll

uti

on

on t

he

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lth o

f th

e F

amil

y M

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ms

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Tota

l

Ba

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Ba

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Base

dB

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218

189

198

226

173

18

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88

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97

157

178

95

12

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74

92

41

48

78

61

40

43

4

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31(2

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121

2.3

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29(1

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7)

63(3

5.3

9)

18(1

8.9

4)

34

(28.3

3)

51

(31.2

8)

23

8(2

4.9

5)

b.

Com

mon

cold

& c

ou

gh

27(1

8.7

5)

31(3

1.9

5)

21(1

3.3

7)

21(1

1.7

9)

29(3

0.5

2)

24

(20.0

0)

2 6

(15

.95)

17

9(1

8.7

6)

c. E

ye

irri

tati

on

23(

15

.97

)2

1(2

1.6

4)

33(2

1.0

1)

28(1

5.7

3)

14(1

4.7

3)

18

(15.0

0)

19

(11

.65

)1

56

(16

.35

)

d.

Su

ffoca

tion

49(3

4.0

2)

28(2

8.8

6)

51(3

2.4

8)

51(2

8.6

5)

31(3

2.6

3)

37

(30.8

3)

58

(35.5

8)

30

5(3

1.9

7)

e. H

air

fall

14(0

9.7

2)

5(5

.15

)2

3(1

4.6

4)

15(0

8.4

2)

3(0

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7(5

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(5.5

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76

(7.9

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All

pro

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144

97

157

178

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12

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4

Note

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ield

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189

198

226

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88

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135

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11

31

94

73

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(62

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100

86

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18(2

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51(2

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13(1

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34

(35.7

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54

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7)

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28

(3.2

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(8.1

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(8.1

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(6.9

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7.0

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16(1

8.1

8)

19(1

6.8

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26(1

3.4

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19(2

6.0

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15

(15.7

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)1

27

(14

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)

g.

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hm

a4

9(3

6.2

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34(3

8.6

3)

51(4

5.1

3)

67(3

4.5

3)

28(3

8.3

5)

29

(30.5

2)

56

(32.7

4)

31

4(3

6.1

3)

Tota

l1

35

88

11

31

94

73

95

17

18

69

Note

: F

igure

s in

par

enth

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ind

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e P

erce

nta

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to t

ota

l

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urc

e: F

ield

surv

ey d

ata

211

DISEASES CAUSED BY AIR POLLUTION

The effect of Air Pollution caused some chronic disease in the study area and the details

are presented in the Table-3.

The table 3 depicts that 869 family members of the sample households were found

affected by diseases (62.60%) due to the air pollution in and around of the households located

around the units. Majority of the sample (36.13%) were suffering from Asthma, while 222

members (25.54%) were suffering from Skin diseases. Nearly 127 respondents (14.61 %)

were suffering from ulcers, 71 members (8.17 %) were suffering from TB, while 60 members

(6.90 %) were suffering from Chest Allergy. Nearly 47 members (5.40%) were suffering from

Pneumonia and 28 (3.22%) members were suffering from Lung Cancer. It indicates that

majority of the respondents’ family members suffering from skin diseases and asthma.

CONCLUSION

Environmental economists believe that environmental quality is a normal good and

citizens of poorer countries may demand a lower level of environment quality.The industrial

air pollution causes to be polluted and in turn becomes human health hazard. Majority of the

family members were facing different problems and getting different types of diseases like

skin, lung cancer, pneumonia, TB, allergy, ulcer, asthma etc. Andhra Pradesh Pollution Control

Board should implement stringiest pollution control measures and take initiation to make

sound environmental policies for well being of the people in the study area.

REFERENCES

1. Prakash Nalleti, Industrial Growth and Environmental Degradation: a case study of Tiruppur Textile

cluster, working paper, Madras school of Economics, June 2007. p.5-10

2. Hemadri Barman “Industrialization and Environmental pollution” document available in internet

2013.p.1-2.

3. http:// www.wced.org.in

4. N. Hanley and Colin R. Roberts, Issues in Environmental Economics, 2002.p.23.

5. www.worldbank.com

6. Charles D Kolstad, “Environmental Economics”, Oxford Université Press, 2000.p.14.

7. Report of the UN Conference on Environment and Development (UNCED) held at Rio de Janerio

in 1992.

8. U. Sankar “Environmental Economics”, Oxford University Press, 2001.

9. (http://lifeofearth.org)

10. (http//www.moef.gov.in)



ARTICLE / 29

SPECIAL ECONOMIC ZONES IN

ANDHRA PRADESH : AN EMPIRICAL STUDY

Sadu Rajesh

INTRODUCTION

The UNDP Human Development Reports since 1994 initiated new paradigm of

development. This new paradigm had put people at the centre of development. This paradigm

proposed to judge development not only on the basis of economic growth but most importantly

its contribution to basic human capabilities-health, education and adjusted real GDP per

capita. Development is judged on the basis of its contribution to the creation of HDI-Human

Development Index. Further, renowned economist Amartya Sen (1999) viewed Development

as a process of expanding the real freedoms that people enjoy. So any economic development

activity is required to be evaluated in terms of its contribution, at least, to HDI and expansion

of real freedom of the people in general and the people of the geographical area where the

activity is undertaken.

The Indian economy was liberalized under the stewardship of Dr. Manmohan Singh the

then Finance Minister of India in 1991. In the name of integrating Indian economy with the

world and inviting FDI in to India Manmohan Singh brought in structural adjustments and

the Indian state slowly began to transform itself, under the influence of Capital. In this

abnegation process Special Economic Zones (SEZs) was the new development paradigm in

India.

THE PRESENT STUDY

A field study was conducted in United Andhra Pradesh selecting 4 SEZs and Primary

data was collected from 220 households, who are having under the geographical jurisdiction

of these selected SEZs with the following objectives :

OBJECTIVES

(i) To elucidate the emergence of the SEZ formation in India as well as in United

Andhra Pradesh.

(ii) To study the socio-economic conditions of the selected respondents.

Assistant Professor, Dept. of Economics, Kakatiya University, Warangal-Telangana State.

213

(iii) To examine the land acquisition and compensations, and the problem of employment

generation due to the establishment of SEZs in Andhra Pradesh.

METHODOLOGY

The data was collected from the primary and secondary sources. The primary data was

collected based on a survey 220 households. The survey was conducted Polepally SEZ

(Mahabubnagar), Kakinada SEZ (East Godavari), Apache SEZ (Nellore), Sricity SEZ (Chitoor)

in United Andhra Pradesh. The secondary data was collected from various research journals

and opinion of eminent scholars, Commerce Ministry, Govt. of India, APIIC etc.

A structured questionnaire was canvassed among the respondents living under the

jurisdiction of the SEZ area for eliciting their views on the issues that have cropped up one

to the land acquisition programs by the SEZ authorities as well as the opportunities.

SOCIO-ECONOMIC CONDITIONS

An attempt is made to present the social status, occupations and ownership of land

holdings of the sample respondents. The following tables present these details;

Table – 1

Social Status of the Respondents

S.No Name of the SEZ B.C S.C S.T OTHERS TOTAL

1 SRICITY SEZ 22(40.0) 27(49.1) 4(7.3) 2(3.6) 55(100.0)

2 KAKINADA SEZ 31(56.4) 24(43.6) - - 55(100.0)

3 POLEPALLY SEZ 25(45.5) 10(18.2) 14(25.5) 6(10.9) 55(100.0)

4 APACHE SEZ 15(27.3) 30(54.5) 9(16.4) 1(1.8) 55(100.0)

All Sample SEZs 93(42.3) 91(41.3) 27(12.3) 9(4.1) 220(100.0)

Source: Field study

Note: Figures in brackets indicate parentages.

The caste configuration of the respondents shows that almost an equal number belong

to B.Cs and S.Cs whose per cent in the total sample are 42.3 and 41.4 respectively, while S.Ts

have 12.3 per cent in the whole sample. Others account for 4.1 per cent. In each sub sample

representation of ST and others can be found except at Kakinada SEZ. In Polepally SEZ area,

we find a sizeable number of S.Ts, who form one fourth of the sub-sample and their number

is greater than S.Cs in that SEZ area. On the other hand in APCHE SEZ area, S.Cs are greater

in number than the other three categories.

The details of occupation of the sample respondents are presented in Table-2.

The occupation particulars of the respondents as shown in Table- 2 indicates that of the

total number of respondents, 33.6 per cent are engaged in agriculture, 34.5 per cent in

Special Economic Zones in Andhra Pradesh • SADU RAJESH


agricultural labour and the remaining, 18.29 per cent are employees. While other occupations

have lesser percentages such as 2.3 per cent in the case of weavers, 0.5per cent each from

business and fishing. The remaining 10.5per cent belongs to other work. Majority of the

respondents are engaging in agriculture at Kakinada SEZ area accounting for 87.3 per cent,

while it is almost insignificant at 1.8% in Apache SEZ area. But agricultural labourers have

a considerable presence in the sub-sample of Apache SEZ area with 61.8 per cent followed

by employees with 23.6 per cent. But employees account for relatively high percentage at

Polepally SEZ area, while those who belong to other work have also a considerable percent

at Polepally SEZ. In the SRICITY SEZ, agricultural labour and agriculture put together have

two –thirds of the total sub-sample, whole employees have the next higher percent in this

SEZ area. Thus the peculiarity of Kakinada SEZ area is that all the respondents were found

exclusively dependent on agriculture.

Table – 2

Occupation Particulars of the Respondents of Selected SEZs

Name of Agricul- Agricultural Busi- Employee Fishing Handloom Other work Total

the SEZ area ture Labour ness

SRICITY SEZ 15(27.3) 22(40.0) - 13(23.6) 1(1.8) - 4(7.3) 55(100.0)

KAKINADA SEZ 48(87.3) 7(12.7) - - - - - 55(100.0)

POLEPALLY SEZ 10(18.2) 13(23.6) 1(1.8) 14(25.5) - 4(7.3) 13(23.6) 55(100.0)

APCHE SEZ 1(1.8) 34(61.8) - 13(23.6) - 1(1.8) 6(10.6) 55(100.0)

TOTAL 74(33.6) 76(34.5) 1(0.5) 40(18.2) 1(0.5) 5(2.3) 23(10.5) 220(100.0)

Source: Field Study

LAND OWNED

Information was collected from the respondents on the extent of land that they owned.

The details are presented in Table-3.

Table – 3

Extent of Land Particulars of the Selected SEZs

Name of the SEZ 0-2.5 Acres 2.5-5 Acres 5-10 Acres 10-25Acres No Land Total

SRI CITY SEZ 45(81.8) 6(10.9) 2(3.6) - 2(3.6) 55(100.0)

KAKINADASEZ 33(60.0) 15(27.3) 7(12.7) - - 55(100.0)

POLEPALLYSEZ 32(58.2) 12(21.8 ) 2(3.6) 2(3.6) 7(12.7) 55(100.0)

APCHE SEZ 21(38.2) 6(10.9) 2(3.6) - 26(47.3) 55(100.0)

TOTAL 131(59.5) 39(17.70) 13(5.9) 2(1.0) 35(15.9) 220(100.0)

Source: Field Study

215

Table- 3 deals with the land particulars of the sample respondents. Of the respondents

from whom the land has been taken away either wholly or partially,59.5 per cent belong to

0-2.5 acres, 16.8 per cent had 2.5-5 acres, 15.9 per cent are from 5-10 acres group, while 1.0

per cent belong to 10-25 acres. As the formation of SEZ had affected not only agriculturalists

but even people belonging to other occupations, their percentage was estimated at 15.9

percent. In Sricity SEZ, Kakinada SEZ and Polepalli SEZ area majority belong to 0-2.5 acres

group, accounting for 82, 60 and 58 per cent respectively. In the case of those who do not

possess land, the percentage is relatively high at Apache SEZ area, where it was 47.3 per

cent. We find a relatively higher number of respondents, in the category of 5-10 acres group

in Polepally SEZ area than the other SEZ areas.

Table – 4

Compensation paid per acre of Land in various SEZs

Name of the SEZ 1000-20000 20000- 50000-1 Lakh 1 Lakh- 3 Lakhs- Total

50000 3 Lakhs 6 Lakhs

SRI CITY SEZ 2(3.8) - - 50(94.3) 1(1.9) 53(100.0)

KAKINADA SEZ 1(1.8) 1(1.8) 4(7.3) 46(83.6) 3(5.5) 55(100.0)

POLEPALLY SEZ 25(52.1) 18(37.5) 5(10.4) - - 48(100.0)

APCHE SEZ - 3(10.3) 3(10.3) 14(48.3) 9(31.0) 29(100.0)

TOTAL 28(15.1) 22(11.9) 12(6.5) 110(59.5) 13(7.0) 185(100.0)

Source: Field Study

Table-4 indicates the compensation paid per acre of land in SEZ area. The compensation

of land per acre varied from Rs 10,000 per acre to 3.5 Lakhs per acre. Of the total 185

respondents who received compensation, 15.1 per cent received compensation in the range

of Rs 10,000-Rs.20000 per acre of land. In the other ranges, such as Rs 20000- Rs.50000,

Rs.50000-1 lakhs, Rs. 1 lakhs to 3 lakhs, Rs.3 lakhs-3.5 lakhs, we find 11.9 per cent, 6.5 per

cent, 59.5 per cent and 7 per cent of the respondents respectively.

A comparison of the different SEZs shows that a relatively high compensation between

Rs 1 lakhs -3 lakh per acre had been received by 94.3 per cent in Sricity SEZ area, 83.6per

cent in Kakinada area, and 48.3 per cent in Apache SEZ area. But those who received above

Rs 3 lakhs were relatively greater in number at Apache area than the other SEZ areas. There

were 3 respondents who received that much amount in Kakinada SEZ area and only one in

Sricity SEZ area. In Polepally SEZ more than half of the respondents received the compensation

amount only between Rs.10,000- Rs. 20,000 and there is none here who received compensation

above Rs 1 lakh. Thus one can surmise that contrast to the other 3 SEZs, there seems to be

some discrimination in the payment of compensation to the respondents under the Polepally

SEZ area, which could have been one of the reasons for the intensity of the struggle at

Polepally.



Table – 5

Number of Workers from Locals in selected SEZs

Name of the 1-2 members 3-4 members 5-6 members No workers Total

SEZ Area

SRI CITY SEZ 24(43.6) - - 31(56.4) 55(100.0)

POLEPALLYSEZ 28(50.9) - - 27(49.1) 55(100.0)

APCHE SEZ 34(61.8) 1(1.8) - 20(36.4) 55(100.0)

TOTAL 86(52.1) 1(0.6) - 78(47.3) 165(100.0)

As the SEZs are expected to provide employment to local people, some of the family

members of displaced farmers could get employment. Table-5 shows that their percentage is

above 50 per cent in Sri City SEZ, Polepally and Apache SEZ. As no factory is established

at Kakinada SEZ none were provided any employment. Only in the case of one respondent

at Apache SEZ, 3-4 members in their family were provided employment. But in all other

cases it was only 1-2 members (52.1 percent) who got employment in the SEZ that is

established in their village. Though promise was made to each household that they would get

employment, still 56.4 per cent, 49.1 per cent, and 36.4 per cent of the household members

of the respondents did not get any employment at Sricity SEZ, Polepally SEZ, and Apache

SEZ respectively.

Table – 6

Nature of the Employment in the SEZs

Name of the SEZ Area Security Technical Manager Daily wage Labour Total

SRI CITY SEZ 10(41.7) 3(12.5) 0(0.0) 11(45.8) 24(100.0)

POLEPALLYSEZ 3(10.7) 5(17.9) 1(3.6) 19(67.9) 28(100.0)

APACHESEZ - 23(65.7) - 12(34.3) 35(100.0)

TOTAL 13(14.9) 31(35.6) 1(1.1) 42(48.3) 87(100.0)

Source: Field Study

The type of employment provided for the members of respondents’ households (see

Table-6) shows that managerial job had been provided for one respondent at Polepally SEZ,

while 41.7per cent, of the respondents from the Sricity SEZ and 10.7 per cent of the respondents

in Polepally SEZ are working in the security wing. In the case of technical jobs 12.5 per cent,

17.9 per cent, and 65.7 per cent of the respondents were working at Sricity SEZ, Polepally

SEZ, and Apache SEZ respectively. Daily wage labour had been provided to 45.8 per cent,

67.9 per cent and 34.33 per cent of the respondent house hold members in Sri City SEZ,

Polepally SEZ, and Apache SEZ respectively. Thus, in a relative sense members of the

respondents’ households are mostly working as daily wage labourer than in the other categories

of employments, accounting for more than 63.0 per cent in low paid jobs.

217

Table – 7

Suicidal Cases Registered in Selected SEZs

Name of the SEZ 1 2 No Total

SRI CITY SEZ - - 55(100.0) 55(100.0)

KAKINADASEZ - - 55(100.0) 55(100.0)

POLEPALLYSEZ 32(58.2) 4(7.3) 19(34.5) 55(100.0)

APACHE SEZ - - 55(100.0) 55(100.0)

TOTAL 32(14.5) 4(1.8) 184(83.6) 220(100.0)

Source: Field Study

Table-7 highlights the registered suicidal cases in various SEZ areas. A further probe

about the consequences of the formation of SEZ indicated that in Polepally SEZ alone there

were one suicide each from 32 households and 2 suicides per household from 4 households,

showing the deleterious effects of the SEZ establishment on the respondents’ families. All

those who had witnessed suicides in Polepally SEZ have said that no compensation had been

paid to them.

CONCLUSION

Policies designed by the governments for the development of the nation probably affect

the people. SEZ policy is for the development of the country. These developmental policies

have economic, political and social impact on our society. Land needed for the establishment

of the SEZs also affected the economic crises of the country. New type of employment of

generation also affects the economy of the nation (Aseem Shrivastava, 2007). The

macroeconomic changes driven by SEZs push the country down the path of increasing socio-

economic, political crisis.

One of the main issues is related with SEZ is land accumulated for SEZs. Many state

governments are in the process of establishing SEZs. The issue of displacement, compensation

or land price, rehabilitation, residential property development and land speculation, the threat

of possible relocation of units from other parts of the state to SEZs and the consequent loss

of revenue must achieve due attention . Farmers are protesting against the forced acquisition

of their lands (Bijoiny Mohanthy, 1997 & S.C Hazary). The development of SEZs would lead

to the destruction of employment of peasants whose land is acquired and creates very little

employment for high skilled persons and total net employment generated might well be

negative. Handing over thousands of hectares of land cheaply to promoters of industry and

relaxing the laws of the land, including those that relate to the welfare of the industrial

workers, protection of the environment, taxation, are assumed to promote industrialization

and solve the nagging unemployment problem of the country overnight.



The people affected by SEZs have a special connotation as it unveils in economic

process that is likely to emerge in near future, if the SEZs can create a belief that the lives

of the people can be improved by them. But not even a single family living these SEZs area

holds a positive opinion about the SEZ, though they did not experience economic progress

in the past. After the forceful seizure of their land with their further loss of their animal

husbandry and a meagre compensation, the basic question raised by them was how to lead

their lives as they have lost their land which was a basic source of their livelihood. This raises

a fundamental question and being for whose sake this type of development is intended where

the government used measures for setting up of such SEZs. Can such a sub-model of industrial

development like SEZ would lead to sustainable development?

REFERENCES

1. UNDP [1994]: Human Development Report.

2. Amartya Sen [1999]: Development as Freedom, Oxford University Press.

3. Aseem Shrivastava [2007]: SEZs: A Catalogue of questions, Info change analysis, http://

ww.infochangeindia.org/analysis167.jsp.

4. Bijoiny Mohanthy and S.C Hazary (Ed) [1997]: Political Economy of India. Retrospect and Prospects

(New Delhi: APH Publications).

219

ARTICLE / 30

INDUSTRIAL DEVELOPMENT OF

ANDHRA PRADESH

D. Nagayya & Balla Appa Rao

INTRODUCTION

Andhra Pradesh, the tenth largest State in India in terms of population, and seventh in

terms of area, is endowed with rich natural resources & mineral wealth, and boasts of the

second longest coastline in the country. With visionary political leadership, strong government

mandate, and proactive administrators, the State is poised to capitalize on its business friendly

policies, and robust physical, social and industrial infrastructure. Andhra Pradesh is poised to

be among India’s three best states by 2022, and a developed State by 2029.

The State has accorded top priority to industrial and infrastructure growth, and intends

to position the State as the most preferred destination for investors by providing favorable

business climate, excellent infrastructure, good law and order, and cordial industrial relations.

The Government has introduced various investor-friendly policies for different sectors to

facilitate availability of resources, provide conducive industrial environment, develop state-

of-the art infrastructure, foster innovation and create employment opportunities. Andhra Pradesh

has already made an impact through its investor-friendly initiative by being ranked as the 2 nd

best state in the country on Ease of Doing Business as per a report by the World Bank. The

State has put in place a Single Desk portal to provide clearances/approvals within 21 working

days to set up an industry in the state.

Andhra Pradesh is strategically located on the South-eastern coast of India, and is a

natural gate way to East and South East Asia. The state has a population of 4.96 crore (as

per Population Census 2011), accounting for 4 per cent of the country’s population residing

in 4.9 per cent of the country’s geographical area. The State is blessed with abundant natural

resources, fertile land and river basins, water resources, extensive canal system, and conducive

agro-climatic conditions. The State has the second longest coastline in the country (974 km),

next only to Gujarat, and is also one of the largest producers of marine products.

Consultant on Small and Medium Enterprises at Guntur, and former Director (Industrial Development),National Institute for Micro, Small and Medium Enterprises (ni-msme), Yousufguda, Hyderabad.UGC Emeritus Professor, Department of Commerce and Management Studies, Andhra University,Visakhapatnam (Andhra Pradesh).


The state registered Gross Value Added (GVA) at constant 2011-12 prices for 2015-16

(AE – Advance estimates) at Rs.4,55,484 crore as against Rs. 4,12,188 crore during 2014-

15 (FRE – first revised estimate), and registered growth of 10.50% (India 6.8%). The

corresponding sectoral growth rates are 8.4% for agriculture (India 1.12%), 11.13% for

industry (India 7.35%), and 11.39% in services sector (India 9.19%). The GSDP for the state

at constant 2011-12 prices for 2015-16 (AE), is estimated at Rs. 4,93,641 crore as against Rs.

4,44,752 crore of 2014-15 (FRE), and registered growth of 10.99% whereas all India

corresponding growth rate was 7.6%. During 2015-16, out of eight major states which have

released GSDP estimates, AP stood first with 10.99% GSDP growth rate at constant prices,

followed by Bihar (10.27%), MP (10.16%), Telangana (9.24%), Maharashtra (8%), Karnataka

(6.2%), Odisha (6.16%), and Punjab (5.96%).

The State has focused on setting an enabling platform through quality power, developing

industrial land banks and skilled resource base across the state. Andhra Padesh is the 1 st state

in South India to offer 24X7 power to industry, and is heading towards achieving a total

installed capacity of about 29,000 MW by 2019 (the present installed capacity is around

10,222 MW). The State has also created one of the largest industrial land banks in the

country. Currently, over 300,000 acres of industrial land bank is available, and the focus is

on further adding 700,000 acres, resulting in a total planned land bank of 1 million acres.

Andhra Pradesh plays host to two large industrial corridors - Visakhapatnam–Chennai Industrial

Corridor, and Chennai-Bengaluru Industrial Corridor, which is expected to bring in US$ 2

billion investments. A third Industrial Corridor from Bengaluru to Kurnool is planned, thereby

ensuring that all the 13 districts in the State are covered.

The State is also developing a Greenfield capital city in Amaravati covering 217 sq km

of capital city area, and 7420 sq km of Capital region area. Amaravati is planned to be

developed as a “futuristic” world-class city with expected population of 13 million by 2050.

Andhra Pradesh is India’s Sunrise State, and is on the path of immense growth. The Partnership

Summit of CII (Confederation of Indian Industry) organized at Visakhapatnam, and the focus

Andhra Pradesh presentations at the Davos World Economic Forum in Switzerland, both

during January 2016, have conveyed the keenness of the State to march ahead in a planned

way at a fast pace.

OVERVIEW OF INDUSTRIAL AND IT SECTOR SCENARIO

Visakhapatnam has emerged as a major industrial centre and has major public and

private sector establishments producing industrial goods ranging from steel, metals, petroleum,

polymers, fertilizers, heavy engineering equipment, and also facilitates ship building, ports &

fishing. Kakinada has multiple fertilizer refineries and produces natural gas from the offshore

of Krishna-Godavari (KG) basin. Kakinada also exports seafood and related products, and

produces agricultural products like rice and corn, edible oils, oil meals, processed food

products, chemicals, biofuel, etc.

221

Vijayawada is famous for processing of agricultural products, automobile body building,

hardware, textiles, consumer goods, and small scale industries. Andhra Pradesh has one major

port at Visakhapatnam and several medium sized ports like Gangavaram, Kakinada &

Krishnapatnam; which account for large export of cargo traffic. There are several large power

plants and major ones are established at Visakhapatnam, Vijayawada, Kakinada, Krishnapatnam,

and Kadapa. The state is also emerging in – information technology and biotechnology.

Visakhapatnam has emerged as the main hub of industrialization and IT Sector. The IT/ITES

revenues of the city alone is at Rs.14.45 billion (US $230 million) in 2012-13. The development

of IT in Tier –II and Tier –III cities like Vijayawada, Kakinada and Tirupati is also improving.

In the fiscal year 2012 -13, Vijayawada’s IT/ITES revenues were Rs. 1152.6 million (US $19

million), while Tirupati with Rs. 693 million (US $11 million), and Kakinada with Rs. 615.4

million (US $ 10 million) are showing signs of progress. Other key sectors such as Pharma,

Power, banking & financial, automobile, tourism, textiles, retail, leather and tourism also

contribute significantly to the economy of the state.

FINDINGS OF WORLD BANK SURVEY ON EASE OF DOING BUSINESS IN INDIA

AND RANKING OF STATES

Survey on Ease of Doing Business in India 2015 carried out by the World Bank is

revealed in the overall assessment with eight indicators, Gujarat was adjudged the first State

with a score of 71.14% of reforms, followed by Andhra Pradesh second (70.12%), and the

largest recipients of foreign direct investments, Maharashtra and Tamil Nadu are ranked

eighth and twelfth, respectively, with less than 50% score. The ranks reflect the ease of doing

business in these States by small and medium enterprises rather than foreign investors. The

report places Andhra Pradesh in the league of ‘Aspiring Leaders,’ alongside six others –

Chhattisgarh, Gujarat, Jharkhand, Madhya Pradesh, Odisha, and Rajasthan with an overall

implementation score of business reforms of 50-75 per cent.

INDICATOR AND THE FIRST FIVE STATES FOR EIGHT ITEMS

(a) Setting up of a Business: 1. Punjab, 2. Andhra Pradesh, 3. Chhattisgarh, 4. Odisha,

5. Rajasthan.

(b) Allotment of land and obtaining construction permits: 1. Madhya Pradesh, 2. Gujarat,

3. Maharashtra, 4. Rajasthan, 5. Andhra Pradesh.

(c) Obtaining Infrastructure related utilities: 1. Maharashtra, 2. Gujarat, 3. Madhya

Pradesh, 4. Delhi, 5. Andhra Pradesh.

(d) Registering and Complying with tax procedures: 1. Karnataka, 2. Andhra Pradesh, 3.

Rajasthan, 4. Odisha, 5. Madhya Pradesh.

(e) Complying with Environmental clearance procedures: 1. Gujarat, 2. Andhra Pradesh,

3. Rajasthan, 4. Punjab, 5. Madhya Pradesh.

Industrial Development of Andhra Pradesh • D. NAGAYYA & BALLA APPA RAO


(f) Complying with labour regulations: 1. Jharkhand, 2. Gujarat, 3. Chhattisgarh, 4.

Andhra Pradesh, 5. Uttar Pradesh.

(g) Carrying out inspections: 1. Jharkhand, 2. Gujarat, 3. Andhra Pradesh, 4. Chhattisgarh,

5. Rajasthan.

(h) Enforcing Contracts: Andhra Pradesh did not figure in the list of top five States.

The Director of Industries, Andhra Pradesh highlighted the major contribution of the

State to be ranked as second in this survey. Online single window / desk clearance system

made a breakthrough for the State. 24 clearances related to 16 departments are given at one

location through the single desk portal.

The Business Reforms Report of the World Bank commended Andhra Pradesh for the

hassle–free nature of its Single Desk Portal, which provides a robust foundation for a conducive

business environment in the State. The State was appreciated for providing clarity on application

approval timelines, which helps entrepreneurs in better planning of investment. The Report

gave prominence to the following healthy practices of the State. The Single Desk Policy

2015-20 of the State was formulated to create a facilitative ecosystem to provide all clearances

/ approvals within 21 working days to set up an industry. It is planned to bring it down to

14 days. All relevant competent authorities are mandated to receive applications and process

the same only via the Single Desk Mechanism. This mechanism provides for State clearances

required for starting an industry across pre-establishment and pre-operation phases. A Chief

Minister’s dash board has been designed as a tool for effective monitoring of the applications

received.

The Single Desk Policy aims to create a conducive ecosystem to provide all clearances

required to set up the industry within the specified time. Various institutional mechanisms at

state and district level have been put in place to simplify processes and procedures. A Single

Desk Portal is also implemented for ensuring real time monitoring and course correction. To

simplify the regulatory framework, the government introduced the Ease of doing Business

wherein an MSME unit has to fill in a single one page self-declaration online form called

Udyog Aadhaar. Online filing on this portal can be done in just three minutes to get registration

without spending any money.

PATTERN OF DISPERSAL AND GROWTH OF MSMES

Table 1 presents the dispersal pattern of large industries and MSMEs at the end of

March 2015 district-wise and region-wise. The thirteen districts of the State are grouped into

three regions for purposes of analysis. Coastal Andhra region is presented in North Coastal

Andhra (4 districts), and South Coastal Andhra (5 districts) sub-regions. Rayalaseema with

4 districts is the other region. Table 2 presents growth of MSMEs in the state – district-wise

and region-wise for the periods ending March 2006 and 2015, along with compound annual

growth for this period.

223

At end-March 2015, the share and status of large industries scenario district-wise (Tables

1&2) reveal as follows: Total enterprises for the State number 1762, with fixed investment

of Rs. 77,292 crore, and employment of 4.26 lakh persons. Among the regions, in terms of

fixed investment and employment, North Coastal Andhra stands first, with Visakhapatnam

and East Govadavari as the leading districts. North Coastal Andhra accounts for 32.3% of

enterprises, 43.9% of fixed investment, and 39.0% of employment. Coastal Andhra region

accounts for 75.5% of enterprises, 70.1% of fixed investment, and 76.3% of employment.

Rayalaseema region accounts for 24.5% of enterprises, 29.9% of fixed investment, and 23.7%

of employment. Among the South Coastal districts, Guntur stands first with 8.0% of fixed

investment and 10.4% of employment, Krishna stands next with 6.8% of fixed investment,

and 7.6% of employment. Among the Rayalaseema districts, in respect of fixed investment,

Kurnool stands first (8.6%), followed by YSR Kadapa (7.7%), Ananthapur (7.5%), and Chittoor

(6.1%). In terms of employment, Chittoor stands first (8.4%), followed by Ananthapur (6.3%),

Kurnool (5%), and YSR Kadapa (4.0%). At the end of September 2015, the position of large

and mega industries is as follows: 1,784 enterprises, Rs. 81,261 crore fixed investment,

employment of 4.36 lakhs. Out of 22 enterprises added during April- September 2015, the

major addition in investment and employment was in the districts of Visakhapatnam, Chittoor,

Krishna, SPSR Nellore, and Srikakulam.

At end-March 2015, the share, status, and growth of the MSME scenario district-wise

reveal as follows (Tables A & 2). Total MSMEs for the State number 1,09,399, with fixed

investment of Rs. 19,000 crore, and employment of 12.09 lakhs. Among the three regions,

South Coastal region stands number one with greater dispersal – 44.7% of enterprises, 42.5%

of fixed investment, and 44.3% of employment. Among the districts of this region, Prakasam

tops the list in all the three indicators – 21.6% of enterprises, 22.4% of fixed investment, and

21.8% of employment. Other districts stand at a distance, with Guntur and Krishna as next

in prominence in all the indicators. Dispersal is thus greater in South Coastal region, compared

to North coastal region. Coastal region accounts for 82.1% of fixed investment, 74.8% of

employment, and 70.7% of number of enterprises. Rayalaseema region accounts for 29.3%

of enterprises, 17.9% of fixed investment, and 25.2% of employment. Here again, dispersal

is illustrated with YSR Kadapa and Chittoor standing as first and second in share of fixed

investment, employment, and number of enterprises. In respect of large enterprises, Chittoor

stands first in employment, whereas Kurnool stands first in fixed investment. Ananthapur

stands second in fixed investment and employment.

Growth trend in MSME sector district-wise for 2006-15 period reveals as follows: In

respect of fixed investment, North Coastal Andhra stands first (29.3%), followed by

Rayalaseema (24.0%), and South Coastal Andhra (23.9%), with the state position as 25.8%.

In respect of employment, as against the state position of 6.2%, Rayalaseema stands first

(8.1%), and the other regions record around 5.6%. In respect of number of units also

Rayalaseema records 7.3%, compared to South Coastal of 4.1%, and North Coastal of 0.8%.

Increase in number of enterprises in North Coastal is low, the state position being 3.9%. The



districts where growth in fixed investment is higher than the state average (25.8%) are:

Visakhapatnam (35.1%), and Prakasam (42.9%). Though dispersal and growth are reasonably

good, in respect of MSMEs, the districts lagging behind are North Coastal districts of

Srikakulam and Vizianagaram, and all the four Rayalaseema districts. These districts need

special attention to enable them to catch up with the developed districts of the State. The

same pattern is noticed in respect of the share of large industries in these six districts. In

accelerating industrialization, including MSMEs, one of the programmes which contributed

significantly is the growth centre approach of the Centre, implemented from 1990s in three

districts – Hindupur in Ananthapur district, Ongole in Prakasam district, and Bobbili

inVizianagaram district.

Table – 1

Status of Large and Mega Industries in Andhra Pradesh -District-wise and Region-wise (end-March 2015)

District / Region Number of Enterprises Fixed investment (Rs.crore) Employment (Persons)

1 2 3 4

Andhra Pradesh 1762 (100) 77292.1 (100) 426355 (100)

Srikakulam 99 (5.6) 1341.2 (1.7) 14563 (3.4)

Vizianagaram 62 (3.5) 3141.7 (4.1) 33848 (7.9)

Visakhapatnam 192 (10.9) 15573.8 (20.2) 67967 (16.0)

East Godavari 217 (12.3) 13855.0 (17.9) 49893 (11.7)

North Coastal Andhra 570 (32.3) 33911.7 (43.9) 166271 (39.0)

West Godavari 160 (9.1) 1976.8 (2.6) 26807 (6.3)

Krishna 169 (9.6) 5285.1 (6.8) 32515 (7.6)

Guntur 204 (11.6) 6180.3 (8.0) 44303 (10.4)

Prakasam 84 (4.7) 1717.4 (2.2) 16436 (3.9)

SPSR Nellore 144 (8.2) 5084.9 (6.6) 39058 (9.1)

South Coastal Andhra 761 (43.2) 20244.5 (26.2) 159119 (37.3)

Coastal Andhra 1331 (75.5) 54156.2 (70.1) 325390 (76.3)

YSR Kadapa 43 (2.5) 5960.3 (7.7) 17189 (4.0)

Kurnool 138 (7.8) 6643.7 (8.6) 21279 (5.0)

Ananthapur 92 (5.2) 5782.1 (7.5) 26619 (6.3)

Chittoor 158 (9.0) 4749.8 (6.1) 35878 (8.4)

Rayalaseema 431 (24.5) 231353.9 (29.9) 100965 (23.7)

Notes: 1. The data covers medium industries registered up to 2005-06, and from 2006-07, this category is included

in the MSME sector. 2. Figures given in parentheses indicate percentage to the State total.

Source: Commissioner of Industries, Andhra Pradesh, Hyderabad.

225

Table – 2

Growth of MSMEs in Andhra Pradesh–District-wise and Region-wise (2006 and 2015)

(Cumulative picture for the year ending March)

District / Region No. of enterprises Fixed investment(Rs.crore) Employment(persons)

2006 2015 CAGR (%) 2006 2015 CAGR (%) 2006 2015 CAGR (%)

1 2 3 4 5 6 7 8 9 10

Andhra Pradesh 77612 109399 3.9 2414.9 18999.6 25.8 702553 1208642 6.2

Srikakulam 4731 4879 0.3 104.7 464.5 18.0 40751 50773 2.5

Vizianagaram 3490 4019 1.6 80.9 552.3 23.8 30868 42834 3.7

Visakhapatnam 10231 8530 -2.0 295.6 4445.4 35.1 81163 152471 7.3

East Godavari 8151 11030 3.4 266.2 2070.7 25.6 73315 122760 5.9

North Coastal Andhra 26603 28458 0.8 747.4 7532.9 29.3 226097 368838 5.6

West Godavari 6897 7262 0.6 247.0 928.7 15.9 61471 77150 2.6

Krishna 8583 5752 -4.3 336.9 1114.9 14.2 80458 62038 -2.9

Guntur 7168 6914 -0.4 314.2 1160.2 15.6 71882 77734 0.9

Prakasam 5290 23658 18.1 171.2 4256.5 42.9 51652 263603 19.9

SPSR Nellore 6130 5323 -1.6 106.8 610.3 21.4 60042 54210 -1.1

South Coastal Andhra 34068 48909 4.1 1176.0 8070.6 23.9 325505 534735 5.7

Coastal Andhra 60671 77367 2.7 1923.4 15603.5 26.2 551602 903573 5.6

YSR Kadapa 3829 12237 13.8 77.7 1329.5 37.1 33629 115702 14.7

Kurnool 4337 4216 -0.3 133.4 502.3 15.9 38026 40480 0.7

Ananthapur 4696 7142 4.8 122.5 548.9 18.1 40281 59186 4.4

Chittoor 4079 8437 8.4 157.9 1015.4 23.0 39015 89701 9.7

Rayalaseema 16941 32032 7.3 491.5 3396.1 24.0 150951 305069 8.1

Note: The data covers medium industries registered from 2006-07 and those of earlier years are covered in the

large and mega industries category.

Source: Commissioner of Industries, Andhra Pradesh, Hyderabad.

EXPORT PROMOTION INDUSTRIAL PARKS (EPIPS), SOFTWARE TECHNOLOGY

PARKS (STPS), AND SPECIAL ECONOMIC ZONES (SEZS) IN THE STATE

Among the programmes of infrastructure development, initiated by the Union Government

with focus on exports, Special Economic Zones (SEZs) is a recent programme, with its earlier

programmes known as Export- processing Zones (EPZs), and Export Promotion Industrial

Parks (EPIPs), and 100 percent Export Oriented Units (EOUs). All infrastructure Programmes

implemented with export orientation are known as Export Promotion Industrial Parks.

Programmes other than SEZ are recalled first stating the position at the end of December

2015. This is followed by presentation of SEZs with district –wise and product group-wise

details of number and area covered in each district.



Software Technology Parks (STPs) under the Software Technology Parks of India (STPI)

in the Union Department of Information Technology (DIT) were promoted in Tier I, Tier II

and Tier III cities. In Andhra Pradesh, these are in four locations – Visakhapatnam, Kakinada,

Vijayawada and Tirupati. Agricultural Export Zones (AEZs) under the Agricultural and

Processed Foods Export Development Authority (APEDA) have developed zones for

horticulture and floriculture. In Andhra Pradesh, there are three AEZs, Nuzvid (Krishna

District) for mangoes, Chittoor for fruits including mango, and Ananthapur for zherkins

(processed cucumbers). Under Spices Board, spices parks were promoted. In Guntur district

(Edlapadu mandal near Chilakaluripet), one spices park is in operation in an area of 125 acres

of land. Under the Ministry of Food Processing, food parks and mega food parks are being

promoted. At Kuppam and Chittoor in Chittoor district, food parks are in operation. A few

more are under consideration. Integerated Textile Parks are promoted by the Ministry of

Textiles. Apparel park is another name for it. Brandix India Apparel city has become operational

in Visakhapatnam district. A few others are at various stages of implementation. Under

various Ministries of the Union Government, apart from the specialized parks, a few 100%

export oriented units (EOUs) have also been promoted. In the new categories of Special

Economic Zones and Software Technology Parks (STPs), a variety of incentives and facilities

are provided by the Centre and State governments.

An Export Processing Zone (EPZ) is functioning at Duvvada, near Visakhapatnam. It

is converted into a Special Economic Zone. The biggest advantage for VEPZ is the

Visakhapatnam port which lies within 25 km from it. Visakhapatnam port trust is promoting

a port EXIM park in 800 acres of land, for allotment to port based industries with an

objective to promote industrialization of the hinterland, and to attract trade for the port.

Marine bio-tech park is being developed on 218 acres of land in Visakhapatnam. The State

Government proposes to develop 72 mini leather parks in various districts.

Government of Andhra Pradesh has proposed to set up integrated food parks in all the

districts. The categories of parks planned are: (a) integrated food park, (b) mega food park,

(c) ultra mega food park. Facilities available from the concerned national level organization

would be utilized, and private sector enterprises would be encouraged to develop enterprises,

availing facilities needed for food processing enterprises on the public – private participation

(PPP) mode. Commodity based cluster development was planned to enable a focused and

planned approach to developing the food processing industry based on the food production

strengths. Particularly for fruits, and vegetables and flowers.

Forty Special Economic Zones were formally approved for Andhra Pradesh during the

period 2006 to 2015 –comprising 28 in Coastal Andhra, and 12 in Rayalaseema. All the 13

districts are covered by the programme. Table 3 presents the district-wise distribution,

employment provided, value of production and exports and imports from the SEZs.

Visakhapatnam accounts for 12 SEZs and Anantapur for 7, Nellore stands next with 5, and

East Godavari 3. Multi – product SEZs are seven-one in Visakhapatnam, one in Kakinada

227

(East Godavari district) - sea port-based, and three in Nellore, one in Chittoor, and one in

Anantapur. Anantapur SEZ is of multi-services. Anantapur also has one Free Trade Ware

housing zone. IT sector is represented by nine zones, one each in Visakhapatnam, East

Godavari, Chittoor, YSR Kadapa, and Kurnool. Krishna and Guntur have 2 SEZs each in the

IT sector. Pharma zones are three in Visakhapatnam and one in Srikakulam. Bio-technology

is found in 3 zones in Anantapur. Textiles and Apparel parks are three - one each in

Visakhapatnam, Nellore, and Anantapur.

The other parks are engaged in the following product lines. Aluminium refining in

Visakhapatnam, alumina in Vizianagaram, food processing in East Godavari, writing and

printing paper in West Godvari, building materials in Prakasam, leather at Tada in Nellore,

bordering Tamil Nadu and close to Chennai, and aviation in Anantapur. Among the zones that

have gone into production, the prominent ones are Sri city in Chittoor district (multi-product),

and Tada for leather (Nellore district).

Table – 3

District-wise functioning SEZs in Andhra Pradesh

(value in Rs.crore) (end-September 2015)

S.No. District No.of Employ- Value of Investment Physical Physical

SEZs SEZs Production Incl. Exports Imports

(April – FDI (April- (April-Sept.

Sept. 2015) Sept. 2015) 2015)

1 Andhra Pradesh 40 62,895 4,295.31 17,185.64 3,354.94 2,556.31

2 Visakhapatnam 12 43,891 3,145.35 12,867.76 2,393.38 2,011.98

3 Vizianagaram 1 - - - - -

4 Srikakulam 1 1,684 53.76 796.20 47.33 168.2

5 East Godavari 3 1,401 159.04 464.58 156.08 0.23

6 West Godavari 1 - - - - -

7 Krishna 2 397 12.64 79.81 12.64 0.16

8 Guntur 2 - - - - -

9 Prakasam 1 1,577 278.74 363.18 248.84 53.03

10 SPSR Nellore 5 11,554 340.20 891.44 269.99 219.09

11 YSR Kadapa 2 - - - - -

12 Kurnool 1 - - - - -

13 Ananthapuram 7 - - - - -

14 Chittoor 2 2,391 305.58 1,722.67 226.68 103.62

Note: One SEZ at Duvvada in Visakhapatnam district was converted into SEZ in 2003 from an Export Processing

Zone. Hence it is much older than all other new SEZs. Office of Development Commissioner (SEZs) under the

Union Ministry of Commerce and Industry, for Andhra Pradesh and Telangana is located in this SEZ.

Source: Government of AP, Planning Department (2016), Socio-economic Survey of Andhra Pradesh 2015-16 ,

Hyderabad; Original source: Andhra Pradesh Industrial Infrastructure Corporation, Hyderabad.



In Andhra Pradesh, 29 SEZs were formally approved, 4 in-principle approvals, and 24

notified SEZs. Among the notified ones, 19 were stated as operational in seven districts, with

Visakhapatnam as prominent. The number includes Visakhapatnam SEZ at Duvvada which

was converted from an Export Processing Zone in 2003. District-wise position of operating

SEZs in Andhra Pradesh is given in Table 3.

Progress of operating SEZs in the districts of Visakhapatnam, SPSR Nellore, and East

Godavari has been noteworthy. In relation to the state, contribution of Visakhapatnam district

is as follows: 71.3% in exports, 78.7% in imports, 74.9% in investment, 73.2% in production,

and 69.8% in employment. Nineteen SEZs account for 63,000 employment, Rs. 17,200 crore

investment, production of Rs. 4,300 crore, exports of Rs. 3,400 crore, and imports of Rs.

2,600 crore. Production, exports and imports are for half year (April- September 2015).

Categorisation of 19 operating SEZs product-group-wise is as follows: 4 IT/ITeS, 4 multi-

product, 4 pharmaceuticals, 2 textile and apparel, 1 building products, 1 leather, 1 footwear,

1 alumina & aluminium refining, and 1 food processing.

INDUSTRIAL INFRASTRUCTURE

Integrated development of Coastal Economic Zones as manufacturing hubs were planned

in the state. The programme covers Investment and Manufacturing Zones, and Industrial

Corridors. Major industrial corridors planned are: Visakhapatnam – Chennai Industrial Corridor

(VCIC), Chennai-Bengaluru Industrial Corridor (CBIC), and Kurnool- Bengaluru Industrial

Corridor (KBIC). The dedicated Rail Freight Corridors sanctioned in 2016-17 Railway Budget,

from Vijayawada to Kharagpur, and Delhi to Chennai will significantly boost the prospects

of these industrial corridors. In addition, it is proposed to develop the Peninsular Region

Industrial Development Corridor (PRIDC) project in Donakonda spanning 5,779 acres with

an investment potential of Rs. 23,000 crore, and employment potential of 1.33 lakhs. It is

proposed to take up Orvakallu Mega Industrial Hub spanning over 27,788 acres with an

investment potential of Rs. 40,000 crore, and employment potential of 70,000.

These corridors will not only promote industries but also create substantial urban

infrastructure, and contribute to the overall economic development of the state. Four industrial

nodes – Visakhapatnam, Kakinada, Srikalahasti – Yerpedu, and Gannavaram – Kankipadu

were identified as potential nodes for VCIC. Similarly, three nodes – Krishnapatnam, Kalikiri,

and Hindupur were identified as nodes for CBIC and KBIC. To boost industrial progress,

National Investment and Manufacturing Zones (NIMZs) are planned to cover Prakasam and

Chittoor districts in the state. Prakasam zone spread over an area of 14,231 acres, will attract

investment of Rs. 43,700 crore, and create 5 lakh jobs over ten years. The Chittoor zone

spread over 5,000 acres will be an integrated township with state-of- the-art industrial and

social infrastructure. It is estimated to bring in investment of Rs. 30,000 crore, and create

around 3 lakh jobs over the next decade. (Source: Government of Andhra Pradesh, Budget

Speech 2016-17 of the Finance Minister, Yanamala Ramakrishnudu)

229

CONCLUSION

Among the strategies to be pursued for accelerating growth of SMEs, a few prominent

ones are presented in this paper. Cluster development, export potential, and promoting

complementarity between small, and medium and large units can be the directions for fostering

speedy growth. Another dimension is focusing on emerging and high value added product

lines to create wealth. Cluster approach for modernisation, and overall planning for a group

of enterprises in product lines which have potential for development is being practised in

many locations in the State, on the pattern being followed in other parts of the country. This

will also result in greater degree of dispersal of industries in smaller towns, apart from growth

centres which are reasonably well developed in earlier years. A few product lines in this

category for cluster approach in the State are: cashew processing, mango jelly, fruit canning,

biscuits and confectionery, marine foods, brass metal works, cast brass hardware, aluminium

utensils, steel furniture, automobile industry, agricultural implements, ceiling fans, distribution

transformers, wooden toys, steel rolling mills, wooden furniture, etc.

WAY FORWARDED

The key challenge in future years for the SME sector is remaining competitive while

continuing to ensure employment intensity of operations. While there is need to devise

appropriate strategies for the sector as a whole, there is greater recognition of the need for

sector-specific policies and interventions. Innovation, research and development, quality

assurance, aggressive marketing strategies, and export-led growth in labour-intensive product

lines, reflect the demands of future periods.



ARTICLE / 31

PERFORMANCE OF SMALL ENTERPRISES

DURING THE REFORMS ERA – A CASE STUDY IN

CHITTOOR DISTRICT OF ANDHRA PRADESH

M. Chinnaswamy Naidu

INTRODUCTION

Small enterprises play a pivotal role in the economic development of India. Small

enterprises have the advantages of generating gainful employment with low investment,

diversifying the industrial base, reducing regional disparities through dispersal of industries

into rural, semi-urban and backward areas. Small enterprises covering small, tiny, village and

cottage enterprises play a catalytic role in achieving the national objectives of increase in

industrial production, generation of additional employment, more equitable distribution of

income and means of production and reducing regional disparities. Recognizing the suitability

of small enterprises the small scale sector has been accorded due priority in the Five Year

Plans of India.

Even after six and half decades of planned development through ten five year plans and

annual plans, industrial sector could not achieve the targeted growth and contribute substantially

to GDP as expected due to several bottlenecks. Instead, services sector could achieve an

impressive growth providing major share of GDP and agricultural sector was related to the

last position next industrial sector contributing lower share of GDP. Due to inadequate growth

of the industrial sector, agriculture sector is overburdened with an excessive manpower resulting

in widespread unemployment and underemployment and proletarianisation of asset less

unemployed in the rural areas adding to widespread poverty 1. In spite of the rigorous efforts

made to develop the industrial sector and improve the performance of the large and medium

industries, their progress has been hampered due to inadequate capital resource technological

and other bottlenecks. Keeping the capital resources constraint and growing incidence of

unemployment and regional disparities, small enterprises are considered to be quite suitable

which can provide gainful employment to the rural unemployed.

The basic objectives of small enterprises are generation of employment at a relatively

low cost, to meet substantial part of the increased demand for consumer goods and simple

producer goods, mobilization of resources of capital and skill which might otherwise remain

Professor, Dept. of Economics, S.V. University, Tirupati.

231

inadequately utilized and integration of these industries with the rural economy on one hand

and large scale industry on the other. In addition, these small units are assumed to ensure

more equitable distribution of income and wealth.

Thus the development of small enterprises has assumed immense importance in the task

of planned development of the Indian economy in the context of rapid growth of population,

growing incidence of poverty and unemployment, low capital resources and widespread

regional inequalities.

INDUSTRIAL POLICY FOR SMALL ENTERPRISES

The primary objectives of the development of small enterprises are the increase in the

supply of manufacturing goods, capital formation, entrepreneurship development, generation

of employment, decentralization, dispersal of industries, reduction of regional imbalances and

diffusion of entrepreneurial abilities and technology. Small enterprises constitute a key link

in the process of socio-economic transformation of the developing economy. The developmental

of small enterprises has been an important element in India’s development strategy since they

generate substantial employment because they are mostly labour-intensive, requiring less

capital and less gestation period. Not long ago, the small enterprises in India have registered

a high rate of growth in terms of increase in their number, employment generated and in the

range of items manufactured. The industrial policies constitute the framework of guidelines

for appropriate decision-making at various levels. They generally consist of policy statements

that direct the development of the sector in the economy. For a developing country like India,

the growth of small enterprises is of utmost significance.


The study has been the following objectives

1. To study the performance of small enterprises in Andhra Pradesh.

2. To examine the changing pattern of definition of the small enterprises in India.

3. To study the socio-economic conditions of the sample enterprises in Chittoor District,

4. To assess the performance of a small enterprises in the study area.

SAMPLE DESIGN

A sample of 50 small enterprises in Chittoor district is drawn for the study with probability

proportional to the size (PPS) sampling method. The units in each category of enterprises are

selected by simple random sampling. Some sample small enterprises have been in existence

for 10 years and some in less than 10 years.

As on 31st March 2014-15, there were 2514 tiny and small enterprises in Chittoor

district, of which, 103 units come under the purview of small enterprises. Small enterprises

Performance of Small Enterprises • M. CHINNASWAMY NAIDU


are one with an investment in plant and machinery in between Rs.26 lakhs and Rs.1.00 crore

of the 103 small enterprises, 28 had been closed, and 25 industrialists declined to provide

information. Leaving them out, the data was collected from the remaining 50 units for the

present investigation as shown in Table-1.

Table-1 shows that Mineral industry ranks higher accounting for 32 per cent of the total

sample units, followed by Agro industry 20 per cent, Animal husbandry 12 per cent, Forest

industry 4 per cent, Textile industry 6 per cent, Engineering industry 4 per cent, Chemical

industry 8 per cent, and other enterprises 14 per cent.

Table – 1

Small enterprises wise distribution of the units surveyed

Category Number of sample enterprises selected Per cent

Agro enterprises 10 20

Mineral enterprises 16 32

Animal enterprises 6 12

Forest enterprises 2 4

Textile enterprises 3 6

Engineering enterprises 2 4

Chemical enterprises 4 8

Others enterprises 7 14

Total 50 100

Source: Compiled from the records of District Enterprises Centre, Chittoor, 2012.

SOURCE OF INFORMATION

The present study is based on both primary and secondary sources. The primary

information covering all the aspects of the small Enterprises was collected with the help of

a structured questionnaire specially designed. The secondary data was collected from the

relevant publications of government and non-governmental sectors, reports and publications

of Planning Commission, published and unpublished literature of various institutions,

organizations, the annual reports and published information available with the directorate and

small scale enterprises, books, journals, newspapers and browse internet.

Table-2 presents the classification of the sample enterprises by type of organization. It

shows that 23 of the units (46 per cent) are classified as under sole-proprietorship, followed

by 14 (28 per cent) partnership units. Private limited companies own 12 units (24 per cent)

and only one unit (2 per cent) is in the co-operative sector. Therefore, it is clear that the sole

proprietorship type of organization dominates among the units selected.

233

Ta

ble

– 2

Fo

rm o

f O

rgan

izat

ion o

f S

amp

le E

nte

rpri

ses

Sl.

No.

Form

of

org

anis

ati

ons

Indu

stry

Ca

teg

ory

Tota

l

Ag

roM

iner

al

An

ima

lF

ore

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xtil

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eeri

ng

Chem

ical

Oth

ers

1S

ole

pro

pri

eto

rship

6(6

0.0

)7

(43

.75)

4(6

6.6

7)

1(5

0.0

0)

1(3

3.3

3)

1(5

0.0

0)

2(5

0.0

0)

1(1

4.2

9)

23

(46.0

0)

2P

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ip2

(20

.00)

4(2

5.0

0)

1(1

6.6

7)

1(5

0.0

0)

1(3

3.3

3)

1(5

0.0

)-

4(5

7.1

4)

14

(28.0

0)

3P

vt.

Lim

ited

2(2

0.0

0)

4(2

5.0

0)

1(1

6.6

7)

-1

(33

.33)

-2

(50

.0)

2(2

8.5

7)

12

(24.0

0)

4C

o-o

per

ativ

e-

1(6

.25

)-

--

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(10

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50

(100

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Note

: F

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cen

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So

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ield

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a.

Ta

ble

– 3

Nat

ivit

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r L

oca

tio

n o

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e E

nte

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se o

f S

amp

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nte

rpri

ses

Sl.

No.

Loca

tio

nIn

du

stry

Ca

teg

ory

Tota

l

Ag

roM

iner

al

An

ima

lF

ore

stTe

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eE

ngin

eeri

ng

Chem

ical

Oth

ers

1R

ura

l6

(60

.0)

6(3

7.5

0)

3(5

0.0

0)

1(5

0.0

0)

--

-4

(57

.14

)2

0(4

0.0

0)

2S

emi

Urb

an2

(20

.00)

5(3

1.2

5)

1(1

6.6

7)

1(5

0.0

0)

2(6

6.6

7)

1(5

0.0

0)

3(7

5.6

5)

2(2

8.5

7)

17

(34.0

0)

3U

rban

2(2

0.0

0)

5(3

1.2

5)

2(3

3.3

3)

-1

(33

.33)

1(5

0.0

0)

1(2

5.0

0)

1(1

4.2

9)

13

(26.0

0)

Tota

l1

0(1

00)

16(1

00)

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00

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(10

0)

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00

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7(1

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50

(100

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Note

: F

igure

s in

bra

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s sh

ow

per

cen

tag

e.

So

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e: F

ield

dat

a.



The nativity of the sample enterprises is presented in Table-3 which shows that 40 per

cent of the sample enterprises (20) are in the rural sector, 34 per cent (17) are in the semi-

urban sector and 26 per cent (13) are in the urban sector. The analysis shows that more

sample enterprises are located in the rural sector than in the others. The reasons for it might

be the incentives offered by the Central and State Governments to start units in the rural

sector.

CLASSIFICATION OF SAMPLE ENTERPRISES

The age wise sample enterprises reveals that 12 per cent of the selected units (6) is

below 3 years age, 20 per cent (10) between 3 and 6 years, 34 per cent (17) between 6 and

9 years, 20 per cent (10) between 9 and 12 years and 14 per cent (7) above 12 years in age.

The mean age of the sample enterprises is 6.42 years. It can be concluded that age-wise the

enterprises between 6 and 9 years (17 in all) take the first place among the sample enterprises.

An important aspect that should be considered while explaining the background of the

sample enterprises is the amount of fixed capital invested by them. It is observed that 32 per

cent (16) of sample enterprises invested between Rs. 25 and 40 lakhs of fixed capital, 24 per

cent (12) between Rs. 40 and 55 lakhs, 10 per cent (5) between Rs. 55 and 70 lakhs, 6 per

cent (3) between Rs. 70 and 85 lakhs, and 28 per cent (14) invested above Rs. 85 lakhs. The

fixed capital invested in plant and machinery is taken as capital investment for the purpose

of the present study. It is clear that the majority of the units invested between Rs. 25 and 40

lakhs.

The working capital invested by the sample enterprises reveals that 54 per cent (27) of

the enterprises invested below Rs. 20 lakhs as working capital, 26 per cent (13) between Rs.

20 and 40 lakhs, 8 per cent (4) between Rs. 40 and 60 lakhs and 12 per cent (6) invested

Rs. 60 lakhs and above. It is clear that majority of the sample enterprises invested as working

capital less than Rs. 20 lakhs. Working capital is needed to meet the day-to-day business

operations.

The distribution of skilled labour employed in the different sample enterprises is presented

in Table-4. The table shows that 74 per cent (37) of sample enterprises employed less than

20 skilled persons, 18 per cent (9) between 20 and 40 persons, and 8 per cent (4) between

40 and 60 persons. None of the units employed more than 60 skilled persons. Majority of the

sample enterprises employed below 20 skilled persons. The table also shows that nearly

threefourths of the units have less than 20 skilled employees.

The details of semi-skilled labour employed in the sample enterprises are presented in

Table-5. The table reveals that 68 per cent (34) of sample enterprises have employed less than

20 semi-skilled persons, 30 per cent (15) between 20 and 40 persons, and 2 per cent (1) above

60 persons. None of the sample enterprises employed between 40 and 60 persons.

235

Ta

ble

– 4

Sk

ille

d L

abo

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plo

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of

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s

Sl.

No.

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our

Em

plo

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tIn

du

stry

Ca

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ory

Tota

l

Ag

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al

An

ima

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w 2

0 p

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)1

(33

.33)

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5.0

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1.4

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37

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220

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-60

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(33

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4(8

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4A

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ve

60 p

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50

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)

Skil

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50

(100

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Sem

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EMPIRICAL RESULTS OF PRODUCTION FUNCTIONS

Table-6 exhibits the production function of different categories of sample small

enterprises. Numbers in parentheses indicate corresponding ‘t’ values. The sign (*) indicates

the level of significance and thus single (*) indicates 5 per cent and double (**) indicate 1

per cent level of significance

For agro based units the coefficient of determination (R 2) indicated that 0.8249 per cent

of the variations in output is explained by independent variables. Among the variables capital

and raw material are statistically significant at 1 per cent level. The sum of elasticity of

output, of different units is 1.3150. This indicates that increasing returns to operate this group

of small enterprises. In other words this shows that an increase in the input by 1 per cent leads

to increase in the output by 1.32 per cent. Among the different inputs, the elasticity output

is highest for raw material at 0.8405 followed by capital with 0.2936 and power and fuel with

0.1765. This indicates that increase in the capital and raw material has a positive impact on

the increase on the production. Both capital and raw material are significant at 1 per cent

level.

The coefficient of determination (R2) in forest based enterprises indicated that 0.7835

per cent of variations in the output is explained by independent variables. Among the different

inputs the raw material statistically significant. The sum of elasticity of output of different

inputs is 1.07. It shows the decreasing returns in forest based enterprises.

In the case of textile based enterprises the coefficient of determination (R 2) indicates

that 0.9062 per cent of variation in the output is explained by independent variables. Among

the different variables the regression coefficient of raw material is statistically significant at

0.1 per cent and capital is also statistically significant at 5 per cent level. The sum of elasticity

i.e., 1.01 per cent indicates the decreasing returns to scale operate in textile enterprises.

Among the different inputs the elasticity of output is highest for raw material at 0.71 followed

by capital (0.31 per cent). It shows that increase in the raw material and capital has a positive

impact on the increase of the production.

The coefficient of determination (R2) in mineral based enterprises is 0.7835 per cent.

Among the different variables the regression coefficient of raw material and power / fuel is

statistically significant. The sum of elasticity of output of different inputs aggregates to 1.06.

This indicates that increasing returns to scale are working in this unit. This shows that

increase of the inputs by 1 per cent leads to increase in the out by 1.06 per cent. Among the

different inputs, the elasticity of output is highest for raw material at 0.71 and for power /

fuel it is 0.44.

In engineering based industry the coefficient of determination (R 2) indicates that 0.8619

per cent of the variation in output is explained by independent variables. Among the different

inputs the regression coefficient of other inputs is statistically significant. The sum of elasticity

of output of different inputs is 1.12. This indicates that increasing returns to scale are operating

237

Ta

ble

-6

Pro

du

ctio

n F

un

ctio

n f

or

Dif

fere

nt

Cat

ego

ries

of

Sam

ple

Sm

all

ente

rpri

ses

S.N

o.

Ca

teg

ory

Co

nst

an

tC

ap

ita

lR

aw

m

ate

ria

lL

ab

or

Po

wer/

Oth

ers

Su

m o

f th

eR

2F

- V

alu

e

(lo

g A

)(l

og

X1

)(l

og

X2

)(l

og

X3

)F

uel

(lo

g X

4)

(lo

g X

4)

ela

stic

itie

s

1A

gro

b

ased

in

du

stry

1.3

24

90

.29

36

**

0.8

40

5**

-0.0

88

30

.17

65

0.0

92

71

.31

50

0.8

24

93

3.9

2**

(4.1

58

2)

(12

.64

89

)(0

.07

40

)(1

.21

35

)(0

.06

73

)

2F

ore

st

bas

edin

du

stry

3.8

04

1-0

.37

48

1.0

94

7**

-0.0

56

1-0

.12

64

0.5

28

01

.06

54

0.7

83

56

.51

*

(1.0

53

6)

(4.4

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in the engineering industry. In other words this shows increase of the inputs by 1 per cent

leads to increase in the output by 1.12 per cent. Among the different inputs the elasticity of

output is highest for other inputs at 0.41 followed by power / fuel at 0.262 and 0.206 for raw

material.

For animal based units the coefficient of determination (R 2) indicates that 0.7932 per

cent of the variation in output is explained by independent variables. Among the different

variables, raw material regression coefficient is statistically significant. The sum of elasticity

of output of different inputs has been worked out to 1.17. This indicates that increasing

returns to scale operate in this category of small enterprises. In other words, it shows that

increase of the inputs by 1 per cent leads to increase in the output by 1.12 per cent. Among

the different inputs, the elasticity of output is highest for raw material at 0.58 followed by

others at 0.36. This indicates that increase in the raw material has a positive impact on the

increase in the production.

For chemical based industry the coefficient of determination (R 2) indicates that 0.9460

per cent of variation in output is explained by different inputs. Output of different variables,

regression coefficient of raw material, power / fuel and capital are statistically significant.

The sum of elasticity of output of different inputs is 1.17 which shows that increasing returns

to scale are operating in the group of small enterprises. Other words this shows increase the

inputs by 1 per cent leads to an increase in output by 1.17. Among the different inputs, the

elasticity of the output’s highest for raw material at 0.71 followed by others at 0.23.In other

enterprises the coefficient of determination (R2) indicates that 0.7938 per cent of variation

of the output is explained by inputs. The sum of elasticity of output of different inputs adds

up to 1.15. This indicates that there exists increasing returns to scale in these units.

CONCLUSION

From the above analysis, it is concluded that nearly 50 per cent of the enterprises are

sole-proprietorship concerns, 40 per cent of the sample enterprises are located in the rural

sector, 34 per cent belongs to 6 and 9 years age-group, 32 per cent of units were established

due to the availability of raw materials, 32 per cent of the fixed capital investment of the

sample enterprises ranges between Rs. 25 lakhs and 40 lakhs, and the working capital of 50

per cent of the sample enterprises is below Rs. 20 lakhs. Almost three fourths of the sample

enterprises, (74 per cent) have skilled employees, and employ less than 20 persons in their

business concerns. A little more than two-three (68 per cent) of the sample enterprises have

less than 20 semi-skilled persons in their employment, 38 per cent of the sample enterprises

have employed un-skilled employees between 20 and 40 persons. A little more than half (54

per cent) of the sample enterprises utilizes 75 per cent of their installed capacity. The turnover

of very nearly half (48 per cent) of the sample enterprises was above Rs. 85 lakhs. Majority

of them have not diversified their business activity.

239

REFERENCES

1. Government of India, Report of the Village and Small Enterprises Industries (Second Five Year Plan)

Committee, Planning Commission, New Delhi, 1955.

2. Government of India, National Committee on the Development of Backward Areas, Planning

Commission, New Delhi, 1980.

3. P.D. Malgawakar, Problems of Small Industry, A Study of Andhra Pradesh, SIET, Hyderabad, 1973.

4. Ramakrishna Sarma, Industrial Development of Andhra Pradesh, Himalaya Publishing House, Mumbai,

1982.

5. Vasanth Desai, Problems and Prospects of Small Enterprises Industries in India, Bombay, Himalaya

Publishing House, 1983.

6. Taranand Singh Tarun, Small Enterprises Industries and India’s Economic Development, Deep and

Deep Publications, New Delhi, 1986.

7. Ram K. Vepa, Modern Small Industry in India - Problems and Prospects, Sage Publications, New

Delhi, 1988.

8. A.U. Khan and Zaqaullah Shaikh, Financing of Small Enterprises Industries in Maharastra, Southern

Economist, Vol.40, No.01, May 2001.

9. Valsamma Antony, The Prospects and Growth of Small Enterprises Industries in India: An Overview,

Southern Economist, Vol.43, No.6, May 2002.

10. M. Jaya Krishna, World Trade Organisation and its Implications on Small enterprises Industries in

Karnataka, SEDME Journal, Vol.31, June 2004.



ARTICLE / 32

THE NEW GREEN WAY TO TRUE HARITA

ANDHRA PRADESH

B. Srinivasa Rao

ABSTRACT

As Andhra Pradesh has emerged as a new state, it has to smack between economic

growth and environmental concerns. As we are all aware of the fact that, though we can’t stop

the development process at once, we can only drag and change the direction now, till we find

proper alternatives. Therefore, the sunrise state has to be very cautious in identifying the

limits of the natural resources and policy formulation in utilising in the best interests of the

state.

Eastern ghats are one of the important natural resources in AP having large amount of

economic and environmental implications. It is a known fact that bio diversity is a non

renewable resource and the deforestation due to stone mining, opencast mining leads to

reduction in forest cover. Moreover, it involves displacement of people. Therefore, a proper

study on fixing the Royalty on quarry lease and other administration, law and order, technical,

environmental issues will not only boost up the revenue for the newly formed state, but also

leads to Green A.P by preserving the Eastern Ghats forever.

End of the pipe solutions or operational efficiency is alone seems ensured by the

prevailing environmental acts and tribunals, APSEIAA etc., . But front of the pipe solutions,

baseline data on existing resources, channelling the proper alternatives seems absent and

adoption of economic instruments is inadequate. AP is no exception earlier. But now, a bit

of focus on Mission Haritandhrapradesh, Palekar natural farming iniative (despite severe

criticism by the govt. officials recently), Neeru Chettu-Cheruvu schemes, red sandal smuggling

control issues, formation of APSEIAA, continuous plantation activities etc., raise hope in the

sunrise state. But the state has to perform more pragmatically instead of simple rhetoric and

symbolic token actions to get more finance commission funding as many criticise and

camouflaging inherent lacunae in policies. Therefore prudent resource utilization by limiting

the exploitation and finding alternatives is the need of the hour.

Increase and proper, timely collection of Royalty rates, Green Taxes, Eco.Penalties are

highly useful in mitigating the disaster in the Easternghats environmental front now a days.

Lecturer in Economics, P.R.Govt. College(a), Kakinada.

241

These instruments require some backward linkages like adoption of Green Accounting

Standards, Baseline surveys of existing resources, economic valuation of bio diversity/natural

resources and forward linkages like assessing the financial implications of these economic/

environmental costs (royalty, taxes, penalties etc., ) on demand and supply of the goods and

services from the mining sector and indirect linkages to the speedy and sustainable growth

of AP economy amidst UN mission of Sustainable Development Goals and targets.

Key words: Harita andhra Pradesh, Eastern Ghats, Green Accounting

The New Green Way to True Harita Andhra Pradesh • B. SRINIVASA RAO

ARTICLE / 33

A STUDY ON FOREIGN DIRECT INVESTMENT

(FDI) INFLOWS ACROSS STATES IN INDIA WITH

SPECIAL REFERENCE TO THE STATE OF

ANDHRA PRADESH (AP)

Laila Memdani

ABSTRACT

FDI inflows are considered as wonder pill for all ails of economic development. The

Government of India is taking large number of steps to increase FDI in the country. State

governments are also not lagging behind. The state of AP is struggling with two issues

simultaneously; they are development of the state and formation of its capital city. One of the

way in which states are trying to solve their problem is by attracting more and more FDI in

the state. The article studies the FDI inflows in states in India in general and AP in particular.

The data used is collected from Reserve Bank of India’s (RBI) and Department of Industrial

Policy and Promotion (DIPP) over a period from 2008-09 to 2015-16 for all the states in

India. The article also studies the relationship between the Gross State Domestic Product

(GSDP) and FDI using panel data fixed effects and random effects model and then Hausman

test is also conducted. The analysis facilitates to infer that FDI doesn’t significantly contributed

to GSDP during period of study.

Assistant Professor, Department of Economics, IBS Hyderabad (A Constituent of IFHE University)

THEME - V

ISSUES RELATED TO THE DEVELOPMENT OFSERVICE SECTOR IN ANDHRA PRADESH

ARTICLE / 34

THE ECONOMICS OF INTELLECTUAL PROPERTY

IN DEVELOPING ANDHRA PRADESH

D V G Krishna, Duvvuri & V N Pradeep

INTRODUCTION

The increasing importance of intangible assets has made the intellectual property (IP)

system increasingly attractive and, in many cases, indispensable for all economic agents.

Intellectual property (IP) is a key consideration in day-to-day business decisions. New products,

brands and creative designs appear almost daily in the market and are the result of continuous

human innovation and creativity. While Indian industry has been increasingly realizing the

importance and benefits of IP creation and protection, the Indian Government has been doing

their best in creating conducive environment by upgrading infrastructure and bringing in

policy level initiatives in the country which has resulted in sweeping changes in IP culture

and administration in the Country. CII, realizing the importance of IPR as the key differentiator

for industrial competitiveness institutionalized a dedicated department manned by domain

experts & professionals more than a decade back. CII’s IPR division informs, analyses, match

makes, facilitates and implements IPR related requirements of Industry, Government, Institutions

and Society. The overall objective of CII’s initiatives in IPR is to facilitate Indian Industry

to attain global leadership by harnessing and leveraging IP as the development of stringent

and staunch IPR system towards creating a strong IP ecosystem is an urgent need for all over

the World. The primary focus of the initiative is to, take policy initiatives, awareness creation,

Capacity Development, IPR Services, international networking and also combating the menace

of counterfeiting & piracy. CII in partnership with Technology Information forecasting and

Assessment Council (TIFAC) (under the aegis of the Department of Science & Technology,

Govt. India and Govt. of Andhra Pradesh) had established in the year 2000 an autonomous

organization named Andhra Pradesh Technology Development & Promotion Centre(APTDC)

in Hyderabad, it acts a one stop shop for IPR facilitation services for MSMEs, Academia and

Entrepreneurs and nodal agency on GIs in the state of AP and Telangana. CII also in association

with the Ministry of Micro Small & Medium Enterprise, (MoMSME) Govt. of India has

established an Intellectual Property Rights Facilitation Centre (IPFC) at Mysore, Indore and

Gandhi nagar The primary objective of these IPFCs is to “Boost IP Culture” which would

Professor & Director, M S S Educational Institutions, Hyderabad.Research Student, CESS, Asst Prof M S S Law College, Hyderabad.Research Student, CESS, Asst Prof M S S Law College, Hyderabad.


enhance the intellectual capital that is vital for the economic development of the state. These

IPFCs are also the pioneer institution in the country in providing various IPR services towards

Training, Information & Advisory services and IP Protection facilitation. In 2015 CII started

the CII Industrial Intellectual Property Award for the Indian industries get national and

international recognition for excellence in intellectual property protection. The purpose of this

award is to encourage organizations to foster a culture of intellectual property management

and commercialization and recognize IP excellence across industry segments.

IPR REGIME AND ECONOMIC DEVELOPMENT

One of the most interesting findings of the literature on IPR and economic development

(Maskus (2000) and Chen and Puttitanun (2005)) showed that there was a U-shaped relationship

between the strength of a state IPR regime and the state per capita GDP using a cross-section

sample of countries. If one is willing to give the result a temporal interpretation, it suggests

that a states IPR regime is not independent of its level of economic development. As state

develops, their IPR regime will weaken before it is strengthened. Since the Agreement on

Trade-Related Aspects on Intellectual Property Rights (the TRIPS Agreement) placed IPR

protection front and centre in trade liberalization negotiations, reform of a developing country’s

IPR regime and its expanded engagement with the global economy are likely to be driven by

the same pressures from developed countries to strengthen IPR protection.

ANDHRA PRADESH – SHAPING UP AN INNOVATION ECOSYSTEM

Make in India’, ‘Create in India’ and ‘Innovate in India’ are all key slogans that are part

of the vision set down by the Indian government. ‘Make in Andhra Pradesh’, ‘Create in

Andhra Pradesh’, and ‘Innovate in Andhra Pradesh’. And, why not? India has clearly established

its name in the services industry. It is now time for the Indian corporate world to graduate

to the next level of innovation in several sectors including manufacturing, technology,

automotive, pharmaceuticals, biotech, financial services and retail, to name a few.

Innovation has been one of the key drivers of growth of several developed economies

around the world. India, with its 1.2 billion populations, needs innovation not only to scale

up to the next level of economic growth but also to address several social, political and

economic issues facing the state today. The percolation of information and communication

technology has, to a certain extent, facilitated the expansion of horizons. But, innovation, and

protection of the innovation are still in the nascent stages, needing an ecosystem that encourages

high- technology, protects it, and facilitates the conversion of the innovative thought to a

physical product and most importantly, monetize it.

Andhra Pradesh is a start-up hub for several industries, including automotive, IT services,

pharmaceuticals, textiles, education, healthcare and manufacturing. It rates high on the human

resource development index, has a high literacy rate, Keeping this in mind, the state

government’s ‘Vision’ suggests that it aspires to become the foremost innovation and knowledge

hub in the country.

247

How prepared is the state to make this vision a reality? What is the awareness level

about Intellectual Property and Rights in such Intellectual Property across the state, across

industry segments, across IP types? What more needs to be done to strengthen the IP ecosystem

in the state?

ACHIEVEMENTS OF APTDC

APTDC (Andhra Pradesh Technology development Center) Confederation of Indian

Industry (CII), Andhra Pradesh Technology Development and Promotion Center (APTDC)

and Govt. of Andhra Pradesh have taken a unique initiative to establish IPR facilitation Cell

in the Andhra Pradesh state primarily to create a strong IPR base, to enhance the quality of

Invention, innovation and fine tune the institutional & policy issues and to increase the

number of patents filed from the state. The idea is to boost investors’ confidence in the long

run through better innovative corporate Culture. The initiative addresses the IPR issues of the

Industry, Research and development institutes of AP at large.

APTDC in collaboration with the Andhra Pradesh Handicrafts Development Corporation

Govt. of AP facilitated the registration of various products originating from Andhra Pradesh.

In 2013, GI certificate was issued to Narayanpet Handloom Sarees and MangalagiriSarees&

Fabrics. Also, APTDC received an approval to file an application for Etikoppaka Crafts

&Durgi Stone Carving. The Consultative Group Meeting for Banaganapalle Mango was

organized in Hyderabad. GI APTDC is also the member of state level GI committee and has

given its recommendations on Post GI implications and its enforcement for the registered

products of AP. In first of its kind, APTDC facilitated towards successfully enforcing GI

Rights for TirupatiLaddu.

IP Filed (2014-15) in Andhra Pradesh

Patent: 13 Trademark: 35

Design: 7 GI: 4

Copyright: 1 Total Fillings: 60

Source: CII & APTDC IPR ANNUAL REPORT -2014-15

The Economics of Intellectual Property • DVG KRISHNA, DUVVURI & V N PRADEEP


ECONOMIC REFORMS : AN APPRAISAL

After gaining independence in 1947, India had the unenviable task of starting the

process of development from scratch. Although independent India had inherited a wonderful

railway system, a few industries and a good administrative service at the grassroots level,

there was little by way of entrepreneurship.

In the 1990s, the then government, realizing it was time to move to the next level of

development, liberalized the economy, eased regulations and encouraged individuals to set up

industries. Around this time, the proliferation of information technology also gave a boost to

the economy and the service industry gained a strong foothold, especially in the area of

technology services.

STATUS UPDATE

In spite of a deep focus on innovation in Andhra Pradesh and the number of industrial

hubs spread across the state, it must be mentioned that we’re still in the nascent stages of

setting up an ecosystem with more focus on IP creation, IP monetization and IP protection.

Even in the MSME segment, a large number of industrial organizations are yet to take

advantage of their potential to create IP. And there sure is a need to increase IP awareness

in the state of Andhra Pradesh. But, it must be noted that this awareness is increasing, across

all types of organizations, be it industries, educational institutions, chambers of commerce

and even the world of entertainment.

NEED FOR IP POLICY

State takes pride in the fact that it had high levels of scientific, philosophic, medical,

engineering knowledge, as evident in many of the surviving traditions and monuments. A

characteristic of such knowledge is that whatever was created was available to the public. The

purpose of knowledge, discoveries and creations was not monetization but the betterment of

society. However, the world we live in has changed over the last several decades. The global

landscape recommends strongly protected IPR, and hence the need to create awareness and

encourage IP and transforming knowledge into IP assets.

Policy documents states: “Many IP holders are unaware of the benefits of IP rights or

of their own capabilities to create IP assets or the value of their ideas. They are often

discouraged by the complexities of the process of creating defendable IP rights. The Central

Government on its part has taken steps through relevant authorities to curb any violations in

this area. The Intellectual Property Rights (Imported Goods) Enforcement Rules 2007 have

been framed to implement border control measures. The Ministry of Human Resources

Development has set up a Copyright Enforcement Advisory Council (CEAC) with

representatives from concerned Ministries/Departments, industry bodies and the police

department to advise the Government on measures to improve enforcement of copyright and

review the progress made. Some state governments have also created IP cells in police

249

departments under the Economic Offences Wings. The states of Tamil Nadu, Kerala, and

Maharashtra have included video piracy as an offence in their laws to deal with prevention

of such activities.

GOVERNANCE OF INTELLECTUAL PROPERTY RIGHTS

These legal instruments are just one of the pieces that form a national system of

intellectual property protection. Also crucial to the system’s overall effectiveness are the

institutions administering these instruments, the mechanisms available for enforcing IPRs,

and the rules regarding the treatment of non-nationals. The administration of IPRs is most

significant in the area of patents, industrial designs, trademarks, and plant breeders’ rights.

To obtain protection for these types of intellectual property, applicants have to submit their

intellectual creations to a national IPRs office, which examines their eligibility for protection.

Copyright and neighboring rights protection typically applies automatically upon creation of

the intellectual work, although for evidentiary purposes authors may choose to register their

works at copyright offices. The enforcement of intellectual property rights relies on a country’s

judicial system.

INTELLECTUAL PROPERTY RIGHTS AND ECONOMIC ACTIVITY

This section evaluates the importance of IPRs in economic activity and highlights some

emerging trends in the IPRs field. The first part relates IPRs protection to the structure of

developed and developing economies and attempts to analyze how important IPRs are in the

creation of intellectual assets as well as in the use of proprietary knowledge and information.

The second part examines the role of IPRs in international transactions in goods and services.

This notwithstanding, that the main IPRs still do not appear as a top policy priority for

developing countries, they have become more relevant in selected sectors particularly in

agriculture and have gained importance in international transactions of goods and services.

These patterns are reflected in an increasing global demand for IPRs protection.

THE IMPORTANCE OF INTELLECTUAL PROPERTY RIGHTS IN ECONOMIC

ACTIVITY

The significance of intellectual property rights in economic activity differs across countries

and depends (1) on the amount of resources countries devote to creating intellectual assets

as well as (2) the amount of protected knowledge and information used in production and

consumption. One useful indicator for the magnitude of resources devoted to the creation of

new knowledge and information is a country’s expenditure on research and development

(R&D). In 1992, developed countries spent $372 billion, 7 or a little more than 2 per cent

of GDP, on R&D. The United States had by far the greatest expenditure on R&D—around

$167 billion, or 2.8 per cent of GDP. Developing countries spent much less money on R&D

(in total around $57 billion) and in most developing countries the portion of GDP devoted



to R&D was below 1 per cent. The major R&D spenders among developing countries include

China, Brazil, India and the Asian new industrial countries.

THE ECONOMICS OF INTELLECTUAL PROPERTY RIGHTS PROTECTION

The protection of intellectual property rights is widely considered to be part of economic

policymaking, although economic theories of growth and development have so far ignored,

or only peripherally considered, the role of IPRs policy. Available economic models and

empirical evidence are inconclusive about the role of IPRs in the development process. The

most analysts conclude that the impact of IPRs protection in a given country depends on

circumstances such as educational attainment, openness to trade and investment, and related

business regulations.

• Its effect as an incentive for creating new knowledge and information,

• Its implications for the diffusion of knowledge and information within and across

economies,

• Its effect on market structure and prices and its distributive consequences.

The discussion highlights the many gaps still remaining in our understanding of the

economic implications of IPRs protection, but also points to some emerging evidence albeit

mostly from developed countries that can be useful in evaluating some of the economic

effects of IPRs protection.

DIFFUSION OF KNOWLEDGE AND INFORMATION WITHIN AND BETWEEN

ECONOMIES

By granting exclusive rights, IPRs restrict in many ways the diffusion of knowledge and

information. Patents, for example, prevent others (at least temporarily) from using proprietary

knowledge. Monopolistic or oligopolistic behaviour among intellectual property title holders

(i.e., relatively smaller output and higher prices) can lead to less than (statically) optimal

dissemination of new knowledge and information. As explained above, this should be

considered as part of the trade-off related to IPRs protection: enhanced market power allows

intellectual property owners to recover their initial information- and knowledge-generating

investments.

At the same time, IPRs can play a positive role in diffusion. Patents are granted in

exchange for the publication of the patent claim. In exchange for temporary exclusive rights,

inventors have an incentive to disclose knowledge to the public that might otherwise remain

secret. Although other agents may not directly copy the original claim until the patent expires,

they can use the information in the patent to further develop innovations and to apply for

patents on their own.

Moreover, an IPRs title defines a legal tool on which the trade and licensing of a

technology can be based. Protection can facilitate technology disclosure in anticipation of

251

outsourcing, licensing, and joint-venture arrangements. The IPRs system thus plays a role in

the creation of markets for information and knowledge by providing buyers and sellers of

technology with more information. Similar to rights on tangible property, IPRs can make

markets for intangible property more efficient and reduce transaction costs.

REFERENCES

Make in India: Reason & Vision for the Initiative - Make In India

Vision Development in Andhra Pradesh 2029 submitted by Ernst & Young LLP (EY)

India 1900 to 1947 - History Learning Site

National IPR policy - Department Of Industrial Policy & Promotion

www.aptdc.in

The economics of intellectual property – WIPO

The knowledge-based economy – OECD

Intellectual Property: Powerhouse for Innovation and Economic Growth – ICC

Publicly funded IP support service for entrepreneurs – WIPO

Technology and IPR Facilitation Services – CII

Intellectual Property Law - International Governanceý - www.cigionline.in

Indian Estates – Economy and Business – IBEF Repo



ARTICLE / 35

INSTITUTIONAL FINANCE FOR THE

DEVELOPMENT OF SC/STS IN ANDHRA PRADESH

G. Savaraiah, D. Udaya Santhi, P. Koteswari & V. Sreevani

INSTITUTIONAL ARRANGEMENTS FOR RURAL CREDIT

Institutional credit agencies are fairly developed in Andhra Pradesh. These institutions

are meeting the short, medium and long-term credit requirements of agriculture and allied

sectors, rural industrial sector and services sector of the economy. These institutional credit

agencies are providing credit for poverty alleviation and employment generation programmes

meant for the weaker sections in general and scheduled castes (SCs) and scheduled tribes

(STs) in particular.

Institutional credit is distributed through multi agency net work consisting of Commercial

Banks (CBs) Regional Rural Banks (RRBs), and cooperatives as on 31 st march 2015. There

are about 91000 village level Primary Agriculture Credit Societies (PACS), 367 District

Central Cooperative Banks (DCCBs) and 28 State Cooperative Banks (SCBs) are providing

primary short term and medium term agriculture credit. The long-term cooperative credit

structure consists of 19 State Land Development Banks (SLDBs)/ Agricultural and Rural

Development Banks (ARDBs) with 2585 operational units which are catering to the requirement

of investment credit. Besides, there are 46690 rural and semi- urban branches of commercial

banks and 14190 branches of 82 RRBs. It was found that agriculture credit supplied by the

agricultural money lenders and professional money lenders accounted for 16.1 per cent of the

rural credit in 1998-2002. The government and commercial banks have accounted for 3.3 per

cent and 32.81 per cent respectively. The setting up or the National Bank for Agriculture and

Rural Development (NABARD) in 1982 as an apex financial institution for promoting and

refinancing the rural financial system was another significant milestone for strengthening

credit flow to the rural economy of India. the cooperative sector become the back bone of

the small and marginal farmers, rural artisans and small business of interest especially to the

farming sector.

Professor, Dept. of Economics, S.V. University, TirupatiResearch Scholars, Dept. of Economics, S.V. University, TirupatiResearch Scholars, Dept. of Economics, S.V. University, TirupatiResearch Scholars, Dept. of Economics, S.V. University, Tirupati

253

BANKING NETWORK IN A.P

The banking system in Andhra Pradesh has attained spectacular growth in terms of bank

branch network, mobilization of the deposits and disbursement of the loans and advances and

coverage of the poor and marginalized sections. The total number of bank branches has

increased from 5051 in 2012 to 6679 in 2015, registering an increase of 32 percent. The rural

branches constitute 38.97 percent in 2015 as against 38.59 percent in 2012. The public sector

banks have expanded their financial services to the poor and marginalized sections in the

rural areas through their branches. The regional rural banks along with private scheduled

commercial banks are also provided financial assistance to the rural poor. The cooperative

banks have moving to the rural areas through their branches network. The particulars of the

bank branch network of different banks are shown in table-1

Table – 1

Bank Branch Network, Deposits and Advances of different banks in Andhra Pradesh

(as on 30th September, 2015)

Category Public sector Pvt. sector RRBs Co-op. Banks Others

banks banks (APSFC)

2014 2015 2014 2015 2014 2015 2014 2015 2014 2015

Rural 1382 1509 124 132 701 776 147 186 0 0

Semi Urban 1324 1402 237 269 190 172 126 108 0 0

Urban 1189 1257 284 324 104 131 104 93 13 13

Metro 236 250 39 57 0 0 0 0 0 0

Total 4131 4418 684 782 995 1079 377 387 13 13

Branches 66.63 66.15 11.03 11.71 16.05 16.16 5.79

Deposits 134525 157549 21085 24215 13323 17763 4412 6281 4 6

Advances 153846 159211 27262 34435 16131 15998 9156 8941 1613 1710

Source: Reports of SLBC for A.P

The data table-1 reveals that the public sector banks constituted more than 66 percent

of the total bank branch network in 2015 as against 67 percent in 2014. The regional rural

banks are the next largest banks after the public sector banks which spread throughout the

State of Andhra Pradesh. More than 16 percent of the branches of RRBs working in the state

followed by Private Sector banks (12 percent) and cooperative banks (6 percent) during 2015.

DEPOSITS AND LOANS OF BANKING SECTOR

The total deposits of all the banks have considerably increased from Rs.173379 crore

as on 30th September 2014 to Rs.205815 crore as on 30 th September 2015 registering an

increase of 18.71 percent. The amounts of loans provided have also increased from Rs.208008

to Rs.220295 showing an increase of 5.91 percent during the same period. But the rate of

Institutional Finance • G. SAVARAIAH, D. UDAYA SANTHI, P. KOTESWARI & V. SREEVANI


growth of loans and advances of all banks has not increased on par with the growth of

deposits. It indicates that the loaning activities of all banks were sluggish during the same

period due to mounting of the loans dues particularly the agricultural loans. The deposits per

branch of public sector banks show higher (Rs.35.66 crore) than that of the branch of private

sector banks (Rs.30.97 crore) and RRBs (Rs.16.46 crore) and cooperative banks (Rs.16.23).

The advances per branch of public sector banks is lower (Rs.36.04 crore) than that of the

private sector banks (Rs.44.03 crore) whereas the advances per branch of cooperative banks

is higher (Rs.23.10 crore) than the RRBs (Rs.14.83 crore)

PRIORITY SECTOR ADVANCES OF INSTITUTIONAL CREDIT AGENCIES

Before 1969, commercial banks had largely neglected agriculture small industrial concerns

and business units. Soon after nationalization, commercial banks were asked to be especially

concerned with the financing of priority sector of agriculture, small industry and business and

small transport operations. In course of time, other priority sectors were also added such as

retrial trade, professional and self-employed persons, education, housing loans for weaker

sections and consumption loans.”The concept of priority sector lending is mainly included to

ensure that assistance from the banking sector flows in an increasing manner to those sector

of the economy which, though accounting for a significant proportion of the national product,

have not received adequate support of institutional finance in the past”.(Dr.Krishnaswami)

The commercial banking system and particularly the public sector banks took to priority

lending enthusiastically. The total credit by the banking sector to agricultures, micro, small

and medium enterprise and other priority sectors went up from Rs.1, 49,363 crore as on

March 2014 to Rs. 169122 crores in March 2016. The details are presented in Table-2.

Table – 2

Priority Sector Advances (as on March 2016)

(Amount in Crore)

Details of Priority Sectors 2014 2015 2016

Total Priority Sector Advances 149363 156180 169122

% of Priority Sector Advances to ANBC (RBI Norm 40%)of which 74.24% 72.37% 78.37%

Agricultural Advances % of Agrl. Adv. to ANBC 97915 91415 99923

(RBI norm - 18%) 48.67% 42.36% (46.30%)

Of which

Small & Marginal Farmers(RBI norm – 7% of ANBC) —- 52520 51659

24.34% (23.94%)

Micro & Small Enterprises (% to ANBC) 28663 33885 36218

14.25% 15.70% (16.78%)

Out of which Micro Enterprises(RBI norm – 7% of ANBC) —- 16208 18701

7.51% (8.67%)

255

Details of Priority Sectors 2014 2015 2016

Medium Enterprises —- 4149 4765

Total MSME(% to ANBC) 32276 38034 40983

16.04% 17.62% (18.99%)

Export Credit —- 904 961

Education 2963 3309 3650

Housing 15882 17986 18820

Social Infrastructure —- 122 103

Renewable Energy —- 56 44

Others —- 4354 4638

Out of Total Priority Sector Advances, finance to:

SHGs 15861.25

Advances to Weaker Sections 55687

(RBI norm - 10% of ANBC) (25.81%)

Advances to Women 39058

(RBI norm -5% on NBC) (18.10%)

Advances to SC/ST 9989

Advances to Minorities 13150

(Norm 15% on priority sector) (7.78%)


As a result, the advances to priority sectors as a per centage of agricultural advances

to the total priority advances has declined from 65.56 percent in 1 March 2014 to 59.80

percent in March 2016. It shows that the relative share of agricultural advances has declined

because of the reluctance of the bankers to provide loans to the farmers as the overdue level

increased at gross root level. Out of the total agricultural advances the small and marginal

farmers have received Rs. 51659 crore in March 2016, registering a decline of 1.64 percent

from Rs.52520 crore in March 2015. However the share of the priority advances to the small

and marginal farmers to the total priority sector advances has increased from 19 percent in

March 2015 to 36 percent in March 2016. The percentage of priority sector advances to small

and marginal farmers to ANBC is 24 percent in 2016 which is higher than that of the RBI

norms 27 percent of ANBC. On the whole, the proportionate there of small and marginal

farmers in the total priority sector advances has been declined due to poor financial base and

lack of political influence. The government has been encouraged the micro and small enterprises

through providing bank credit in the state. The total priority advances to the micro and small

enterprises have increased from Rs.28663 crore in March 2014 to Rs.36218 crore in March

2016, indicating more than one-fold increase. But the percentage of priority sector advances

to micro enterprises to ANBC was 7.51 percent in 2015 and 8.67 percent in 206 as against

the RBI norms of 7 percent. On the whole, the loans to the MSMOs have risen by Rs.8707

crore in 2016 over 2014, registering an increase of 26.98 percent. Among the other priority

sector advances, Housing loans were given top priority of the government and also banks



which provided Rs.18820 crore in 2016 as against Rs.15882 crore in 2014 showing an

increase of 18.49 percent Educational loans have risen by only Rs.341 crore during the same

period.

CREDIT POLICY TO UPLIFT THE WEAKER SECTIONS

Easing credit constraints for the poorest and the weaker sections must be a priority to

reinforce and sustain their health status. The Government is ostensibly, ensuring that credit

priority, as spelt out and implemented by Reserve Bank of India (RBI) is aimed at precisely

that credit is a key input for agriculture and allied activities and for many small and micro

enterprises run by the section that forms the Country’s 30 crore un organized sector.

Ensuring that access to constraint free and timely credit is widespread and functioning

efficiently in the rural areas becomes urgent against the new economic policies that destabilize

their existing modes of livelihood, including widespread acquisition of available land for

SEZs and liberalization of the retail sector in food processing.

The Report on National Commission for Enterprises in the Unorganized Sector (NCEUS)7 has delivered a scathing attack of the RBI’s priority sector lending (PSLP) and commitment

to the weaker section credit. Here is an unwittingly state-sponsored, kid gloves-off critique

of deliberately lopsided policy which has been designed not by branch managers and loan

officials but by the decision makers at the top of the RBI to benefit what could be a travesty

of the phrase “weaker sections”.

A tawdry application of the mind is evident in RBI’s own Public Sector Lending Policy

which has set a target of 40 percent of the adjusted net banking credit (ANBC) for priority

sector lending by banks. Of the 40 percent, 18 percent target was set for agriculture and

another 10 percent was set for weaker sections. The emphasis on agriculture and priority

sector credit led to the introduction of penalties for non-achievement of priority sector targets

by banks. The fault, NCBUS, has charged, lies with RBI credit policy makers who refused

to reduce the 40 percent (of ANBC) target set for top priority sector lending despite the

difficulties of banks in achieving it. Role of formal institutions in rural banking especially by

the commercial banks was conceived and emphasized on the improvement in the priority

sector lending. But growth was manifested in other priority sectors and only marginal growth

took place in agriculture. The target set for weaker sections (mainstream microfinance) was

achieved by a small margin in public sector banks. The achievement of private sector banks

was nowhere near the target. What the authorities did, instead, was to “nullify, through the

backdoor the operational relevance of the priority sector target by including many items

which can be conceived of as belonging to the weaker section borrowers of small loans who

would not possess other bankable projects.

The Banks, the panel reports, are not interested in making advances to unorganized

sector borrowers mostly the weaker sections like SC/ST, small and marginal farmers, agricultural

labourers and women in the absence of collateral, irrespective of what RBI guidelines say.

257

They openly subvert and ignore the guidelines that say no collateral for loans up to Rs.5

lakhs. But majority of the public sector banks and regional rural banks insisted the collateral

security even for the deployment of the small loan to the weaker sections.

FLOW OF INSTITUTIONAL CREDIT TO WEAKER SECTIONS

Traditionally rural India is capital-starved. Only a meagre proportion of the rural people

have surplus funds to be ploughed back into their respective avocations. At the beginning of

the twentieth century, there was nothing like rural banking for the villagers. In the absence

of institutional credit agencies, the rural economy was bedevilled by a number of unscrupulous

agencies including the proverbial money lender”.

India has wide range of rural financial service providers including the formal sector

financial institutions. In 2000, about one-thirds of the SC rural households were landless and

near landless compared to one-third among the non- SCs/STs .About 60 percent of the SC

households still had to depend on wage labour compared to one- fourth of the non-SCs/STs

which is indicative of a much higher level of dependence on wage employment 12.Hence, they

need the support of the institutional credit agencies for their development. The institutional

credit for the weaker sections and scheduled castes/scheduled tribes in Andhra Pradesh has

shown in table-3.

Table – 3

CREDIT FLOW TO MINORITY COMMUNITIES, WEAKER SECTIONS, WOMEN AND SCs/STs

(Outstanding Rs. in Crore)

Sl. No. Year ended Minority Weaker sections Women SC/ST Percent

communities

1 March, 2012 — 33,368 — 7114 21.32

1 March, 2013 7,066 40,554 30,116 7,774 19.17

2 March, 2014 8,372 47,074 34,736 9,365 19.89

3 March, 2015 11,069 48,495 35,994 8,710 19.96

4 March, 2016 13,150 55,687 39,058 9,989 17.94

RBI stipulation1 5% on priority 10% of ANBC 5%on NBC No stipulation -

sector

Achievement for 7.78% 25.81% 18.10% - -

March, 2016


The total outstanding credit deployed by the banking sector i.e commercial banks,

RRBs and cooperatives to the weaker sections increased from Rs.33368 crore as at the end

of March 2012 to Rs. 55687 crore as on 31 st March 2016, registering an increase of 66.89

percent. The total credit flow from the institutional credit agencies to the development of



scheduled castes/ scheduled tribes has risen by Rs.1596 crorei.e from Rs.7114 crore to Rs.9989

crore, showing an increase of only 40.41 percent during the same period. The advances

weaker section, constituted 24.10 percent as against the RBI stipulation of 10 percent net

Bank credit. The lending to SCs/STs comprised 5.75 percent of the priority sector advances.

The percentage of SC/ST loans outstanding to the total outstanding loans to the weaker

sections has gradually declining from 21.32 per cent in 2012 to 17.94 per cent in 2016. It

shows that the share of credit to the SCs/STs from the total credit made to the weaker section

is not growing due to lack of the financial base in terms of showing the collateral security

against the loan. It is clearly seen in the comparative statement of credit disbursement for

various groups of beneficiaries under welfare-schemes in the following table-4

Table – 4

Comparative Statement of Credit DisbursementsUnder welfare Schemes

(Amount in crore)

Name of the Scheme Disbursements from Disbursements from Variance

01.04.2014 to 01.04.2015 to

31.03.2015 31.03.2016

Minority Communities 2024 3525 (+)1501

Weaker Sections 15286 26077 (+)10791

Women 9183 14947 (+)5764

SC/ST 2185 3637 (+)1452


The comparative statement of institutional credit disbursement under welfare schemes

during 2014-15 and 2015-16 shows that there is a wide variation in the credit flow to the

various categories of people under various schemes. It is evident that the credit flow to the

minority communities has risen by RS.1501 crore, registering an increase of 74.16 percent

whereas for the weaker sections, the total credit flow gone up to Rs.10791 crore in 2015-16

from Rs.15286 crore 2014-15 to Rs.26077 in 2015-16, showing more than one and half-fold

increase. The institutional credit disbursement during the same period has tremendously risen

by Rs.4240 crore, which accounted for more than two-fold increase. But in case of the

institutional credit disbursement to the SC/ST communities, it has risen by RS.1452 crore,

showing 66.45 percent.

SUBSIDY LOANS BY THE SC/ST FINANCE CORPORATION

The focus of the National SC/ST finance corporations is on the special developmental

and financing needs (loans only) of SCs and STs, over and above the credit availability

through priority sector lending of banks and other institutions. The National Scheduled Castes

and Scheduled Tribe Finance Corporation provide financial assistance at concessional rates

for income generating activities of BPL SC/ST beneficiaries through state SC/ST finance

259

corporations. The State SC/ST finance corporations have been providing subsidy and marginal

money to the SC/ST educated unemployed persons and poor people. There are many schemes

implemented by the SC/ST finance corporations for development of the marginalized sections

of the people. The SC Finance Corporation has set the target of 23,285 SCs who should be

given Rs.72.97 crore as target for the year 2008-09. But the corporation disbursed Rs.18.45

crore to 5,444 SC beneficiaries. In this case, only 23.38 percent of targets for beneficiaries

and 25.28 percent of the targets for loans have achieved during 2008-09. In 2015-16, the SC

Corporation targeted to provide Rs.230 crore to 53,158 SC beneficiaries but it has given

Rs.191.11 crore to 27,886 SC beneficiaries. Only 83.09 percent of the target was achieved

up to January 2016.

With regard to the development of STs, the ST Finance Corporation has targeted to give

subsidy loans of Rs.176.63 crore to 23,285 ST beneficiaries but it has given only 13.36 crore

to 74,102 ST beneficiaries during 2008-09. The targets set for the number beneficiaries

(78.51 percent) and the amount of loans (7.56 percent) is not achieved during 2008-09. The

ST Corporation has given Rs.48.92 crore in 2015-16 as against its target of Rs.78.78 crore,

thus only 62.10 percent of the target is achieved. The corporation has given loans to 8558

ST beneficiaries as against its target of 20,302 ST persons. In this case, only 42.15 percent

of the targets achieved during 2015-16.

“STAND UP INDIA” YET TO GAIN PACE IN STATE

The much-hyped ‘Stand up India’ scheme is yet to enable Scheduled Castes (SCs),

Scheduled Tribes (STs) and women entrepreneurs to access loans in the State. The banks have

sanctioned mere 37 loans to SCs/STs and 226 loans to women in the State ever since the

scheme was launched on April 5, 2016.

The scheme ensures that women and SC/ST entrepreneurs have a fair chance of initiating

their own business. Under the scheme, the banks have to sanction loans of Rs.10 lakh to Rs.1

crore for setting up new enterprise, which is termed as green field enterprise.

There are 6,929 bank branches across 13 districts, and the bankers have to finance

13,858 people in a year. After continual nudging by the government, the banks could find

only 263 eligible candidates, including women, under the scheme during first quarter of the

financial year.

Every stakeholder has their own theory for poor response to the scheme. The bakers say

that they are “unable to find eligible borrowers from SC/ST categories.” The industry bodies

point out that there is no proper dissemination of information and banks are not reaching the

people at grassroots. Besides, the prospective entrepreneurs are unable to pool up the margin

money, feel the industry associations.



CONCLUSION

The state government has been launching many developmental programmes towards the

welfare of the downtrodden and weaker sections. Almost all weaker section communities

have separate financial corporations for their development. They are financing for the

development of the weaker sections along with the institutional financing agencies in Andhra

Pradesh. But loan amounts are inadequate to the weaker sections particularly the schedule

castes and tribes for their income and employment generating economic activities. The SC

Corporation could not able to maintain its targets for the last one decade. The present

government was started “stand up India” programme for schedule caste and tribes and women

entrepreneurs to access loans in the state of Andhra Pradesh. Half of the financial year is

going to complete within a day’s but they have selected only 42 candidates under this

programme. It shows that how the banking system has been working for the well being of

the weaker sections. We hope, the institutional credit agencies will fulfill the targets set for

the development of weaker sections in the state level banking committees.

REFERENCES

1. Sukhadev Thorat : Dalits in India - Search for A Common Destiny, Sage Publications, New Delhi,

2009.

2. Savaraiah G and Devarajulu M, Reservations under LPG Some Issues and Facts, Published in,

Ambedkar and Dalits in Contemporary India, Academic Publishers, Bangalore, 2005.

3. R. Sangeet Rao: Exploitation of Schedule castes and Tribes, Scewastam, New Delhi, 2000.

4. Stand up India Yet to Gain pace in State, The Hindu 22-Sep 2016.

261

ARTICLE / 36

DOES BANKING SECTOR HELP THE RURAL

POOR? A STUDY ON MICRO CREDIT THROUGH

COMMERCIAL BANKS IN ANDHRA PRADESH

M. Muralimohan & M. Devarajulu

INTRODUCTION

Until recent economic reforms, India was the prime example of a country that aggressively

pursued the directed-credit approach. It is rightly pointed out that the impressive recent

growth of certain sectors of the Indian economy is a necessary but insufficient condition for

the eradication of extreme poverty. The extent of poverty has been increased with the growth

rate of the economy. Of course, on one hand, many of luxurious articles like cell phones, cars

(NANO) and other electronic goods are now available even to the low income groups; but

on the other hand a majority of the population who live below the poverty line are unable

to satisfy even their basic needs. This type of situation is not a safeguard to any economy,

which finally leads to internal unrest. However, economists say that, it is quite natural that

the parallel increase in the growth and inequalities in a developing economy are not the right

answer for high incidence of poverty in the country. India is said to be the home of one third

of the world’s poor. The rapid and globalized economic growth generates many new and

innovative opportunities as well as challenges to the individuals all over the countries in the

world. The India also experienced with these global changes that leads to new strata of its

occupational distributions and introduced new methodologies in respect to its major problems

such as poverty, unemployment, inequality and financial exclusion of the poor who has been

neglected for decades and out of the fruits of the stated immense growth of the economy.

However India shines with its seventh rank for its abnormal growth rate among the world

economies and at the same time it accounts for 130th rank of the total 188 countries in its

Human Development Index (HDI) as per the estimates of UNDP Report 2015. According to

the poverty estimates 2011-12 by the Expert Group (Tendulkar Methodology) Report 2014,

there was 11 per cent representing 6.18 millions of population were below poverty line in

rural Andhra Pradesh where as it was 5.8 per cent in urban centres representing 1.7 millions

of urban poor in Andhra Pradesh. However, a lot of challenges lie in understanding poverty

from the socio-political and economic empowerment perspectives of the people in poverty.

Post-Doctoral Fellow, Department of Economics, Sri Venkateswara University, Tirupati, A. P.Professor & Registrar, Dept. of Economics, Sri Venkateswara University, Tirupati, Andhra Pradesh.


One way of understanding poverty is to look at exclusion of poor from access to and utilization

of financial institutions, which were primarily aimed at serving the socio-economic development

of masses, especially in the developing economies. By recognising the need of financial

inclusion for excluded groups the Indian banking sector has initiated and implemented a

variety of schemes and programmes in order to bring the excluded sections in to the pathway

of rapid and sustained economic development. Among those new strategies of Indian banking

sector, the most appreciated and succeeded methodology of poverty reduction by financial

inclusion is the micro credit.

Micro credit, which received remarkable popularity among various components of

microfinance, considered as a tool of economic development whose objective is to assist the

poor to work their way out of poverty. It covers, a range of services which include, provision

of credit, money transfers, counselling and enables women’s empowerment by routing credit

directly to women, thereby enhancing their status within their families, the community and

society at large. Being driven by these factors, Micro Finance Institutions (MFIs) have emerged

in many developing countries including India and has become a critical engine of inclusive

and sustainable growth for women through group lending bank linkage programme.

MICRO CREDIT IN INDIA

The concept of microfinance has come into practice at first in India by a non-formal

financial organization started in 1974 in Gujarat named as “Self-Employed Women Association”

(SEWA), which was established based on the cooperative principles and owned by women

of petty trade groups. The microfinance sector in India gained real impetus with the

establishment of the National Bank for Agriculture and Rural Development (NABARD) in

1982. NABARD’s well-known microfinance scheme, which named as “SHG-Bank Linkage

Programme” (SBLP) was first initiated through a pilot project in Karnataka in the mid-1980s

and has now expanded throughout the country. It is increasingly adopted by Government

agencies as a vehicle for their programmes. In this model, NABARD refinances commercial

banks and this has to be distributed loans to Self-Help Groups (SHGs) in order to facilitate

relationships between the banks and poor borrowers. The SHG-Bank Linkage Programme has

made significant progress since 1998. This programme has greatly increased the outreach of

the banking system to otherwise unreached households, especially to women as SHG members

and initiated a change in the outlook of banks towards low income families from beneficiaries

to customers.

POVERTY, MICRO CREDIT AND INDIAN BANKING SECTOR

Recently, several policy initiatives were taken to advance rural banking. These include

additional capital contribution to NABARD by the RBI and the Government of India,

recapitalization and restructuring of RRBs, simplification of lending procedures as per the

Gupta Committee recommendations, preparation of a special credit plans by public sector

263

banks and launching of Kisan Credit Cards in 1998. Similarly, a scheme linking Self-Help

Groups with banks has been launched under the aegis of NABARD to augment the resources

of microcredit institutions. A Committee has gone into various measures for developing

microcredit, and submitted its report, which is under the consideration of the RBI. All these

were reinforced and directed credit became as “the mantra” of the Indian financial sector. Yet,

the entire network of Primary Cooperative Credit Societies, RRBs and other commercial

banks including SBI group in the country, established to meet the needs of the rural sector

in general and the poor in particular, has not proved to be successful in meeting the demand

for credit of the rural folk. Thus, the new initiation of microfinance is being increased as a

potential and most preferred sector in Indian financial screen through NGOs, MFOs, Banks

and other Government agencies involving in SHG-BLP scheme etc. As per the Report of

NABARD, by the end of Financial Year 2015-16 the total Rs. 37286.9 crore were disbursed

to the total number of 1832323 Self-Help Groups (SHGs) as micro credit under the scheme

of SHG-Bank Linkage (SBLP) scheme by the Indian banking sector across the country.

Among the total disbursed the amount Rs. 34411.4 crore were exclusively disbursed to

1628671 of women SHGs in the country. The report also reveals that the Indian banking

sector loans outstanding is Rs. 57119.2 crore against to the total 4672621 SHGs and it was

Rs. 51428.9 crore for the total number of 4036225 exclusive women SHG across the country

as by the end of March 2016. All these figures implies that the contribution of Indian banking

sector for the development of poor groups and to make an effective financial inclusion in

rural India.

STATEMENT OF THE PROBLEM

In Andhra Pradesh, the majority of people depend upon agriculture and its allied activities,

who often suffer from the serious problems like low rainfall, lack of irrigation facilities,

inadequate employment and income and low access to the formal credit. The Rayalaseema

region long known as a famine belt, it is economically most vulnerable part of Andhra

Pradesh. Soil erosion is one of the serious problems of the region and its ground water

potential is also very limited. As a result of this vulnerable character of the region, poverty

encourages migration. In this regard, the government of Andhra Pradesh and Society for

Elimination of Rural Poverty (SERP), which is an autonomous society of the Department of

the Ministry of Rural Development, Andhra Pradesh, jointly made many efforts to the upliftment

of the poor especially in rural areas and regarded that the provision of micro credit is the best

solution and source for survival of rural women to improve their livelihoods by taking a

variety of income generating activities.

This paper evaluates the impact of micro credit received from the banking sector on

livelihood status improvement of poor families in rural Andhra Pradesh with the following

objectives.

Does Banking Sector Help the Rural Poor? • M. MURALIMOHAN & M. DEVARAJULU


OBJECTIVES

1. To examine the credit utilization pattern among SHG women groups in rural areas

2. To assess the impact of micro credit on income levels of the rural poor

METHODOLOGY

The study is based on both secondary and primary data. Secondary data was collected

from different sources such as administrative reports, Journals, reports of Reserve Bank of

India and NABARD. The primary data was collected through personal interview with an aid

of a schedule from the sample respondents belong to Self Help Groups (SHGs) in Kambhamvari

Palle mandal in Chittoor District of Andhra Pradesh. The sample for the study includes the

customers of bank and individual customer of the bank. The sample size for present study

is 60 from different age groups and categories in the village.

DISCUSSION AND OBSERVATIONS

CREDIT UTILIZATION PATTERN OF SAMPLE RESPONDENTS

The credit utilization pattern of SHG-Bank Linkage Programme (SBLP) sample

respondents is a better indicator in terms of taking right decision in order to improve the

living standards and raise the level of empowerment. A production-oriented (income-generating)

loan such as investing on cultivation, business, buying milch cattle and other income generating-

activities has more potential for increasing household’s income and improve welfare of the

families of sample beneficiaries than a loan used for celebration of ceremonies and other

unproductive activities. Table –1 shows the credit utilization of sample beneficiaries in the

study area.

Majority of sample respondents (65 per cent)have spent their loan amount on income-

generating activities, whereas; 10 per cent spent on un-productive activities like traditional

functions, purchase of household appliances and on other facilities like tap connection, house

renovation etc. followed by 03.33 of respondents who used their loan amount to meet the

medical expenses and 08.33 per cent of sample respondents who used it to meet for other

unforeseen expenses.

Table – 1

Credit Utilization Pattern of Sample Respondents

Sl.No Utilization of Credit No. ofRespondents Per cent

1 (A) Credit Utilized for Specific Purposes like

a For Productive Activities 39 65.00

b To Clear Other Loans 08 13.33

c For other Un–productive Activities 06 10.00

Sub-Total 53 88.33

265

2 (B) Credit Utilized Unforeseen Purposes like

a For Medical expenses 02 03.33

b For Other expenses 05 08.33

Sub-Total 07 11.67

3 Total Sample Respondents 60 100.00

Source: Field Survey.

Note: Per cent refers the percentage to the total number of respondents.

MICRO CREDIT AND INCOME GENERATION

Raising the living standards by increasing their sources of income is the main objective

of micro credit. But, the chance of increasing the sources of income is highly subjected to

the beneficiaries’ credit utilization pattern and their skills of managing the loan amount. The

Table–2 presents the responses of the sample respondents on income generation through

different activities with the help of micro credit.

Table – 2

Responses of Sample Respondents with regard to Income Generation through Micro Credit

Sl.No Micro Credit Improves Family Income No. of Respondents Per cent to Total

1 Yes – through Credit utilised for

a Agricultural Production 12 20.0

b Milk Production 19 31.67

c Business / Self-Employment 03 05.00

d Others 02 03.33

Sub-Total 36 60.00

2 No – because of Credit utilised for

a House Construction 09 15.0

b Children Education 02 03.33

c Clearing Old Debt 08 13.33

d Others 05 08.33

Sub-Total 24 40.00

3 Total Sample Respondents 60 100.00


Note: Per cent to total refers the percentage to the total number of respondents.

From Table –2, it was found that for majority (31.67 per cent) of respondents, maintained

milch cattle as a major source of income; whereas, only five per cent could set up their own

business owing to lack of awareness on self-employment and low levels of job-specific skills.

Significantly, 40 per cent of sample respondents utilized their loan amount for non-income



generating activities and could not get proper returns from their investments made through

micro credit.

IMPACT ON INCOME GENERATION

An attempt is made to observe the social dimension of the impact of micro credit on

generation of income for sample respondents in the study area. These observations are presented

in Table –3.

Table – 3

Caste-wise Responses of Respondents with regard to Income Generation through Micro Credit

Sl. No Category Micro Credit Improves Family Income TotalRespondents

Yes No

1 SC & ST 06(30.00) 14(70.00) 20(100.00)

2 BC 18(90.00) 02(10.00) 20(100.00)

3 OC 12(60.00) 08(40.00) 20(100.00)

4 All Categories 36(60.00) 24(40.00) 60(100.00)


Note: Figures in parenthesis indicate percentage to the total sample respondents.

Table–3 presents the responses of sample respondents towards the increase in the overall

income of the family after availing the micro credit. As per the answers to the question

regarding the changes effected in the overall income of their family by securing the micro

credit, we found that 90 per cent of sample respondents of BC category could get new

employment opportunities enabled by micro credit loan, followed by 60 per cent of OC

category sample respondents and 30 per cent of SC & ST category sample respondents in the

study area.

MICRO CREDIT AND FAMILY INCOME LEVEL

The Women who constitute half of the population in the country play crucial role in

their family in many ways and contribute much more than the men in order to achieve good

qualitative human resource development in the economy. They actively participated in a

variety of income-generating activities with an objective of raising their family’s living standards

by contributing income as an addition to their family members’ income. It improves their

family status in society. In this connection, Table–4 reveals the changes in the levels of family

income of sample respondents ‘before’ and ‘after’ availing the micro credit from SBL

programme.

From the Table –4, it is observed that in the period ‘before’ securing micro credit, 30.0

per cent of the total sample respondents family income was less than Rs.20000, whereas;

‘after’ it reduced to five per cent only. As the same it is also significant to observe that there

267

was not even one respondent with a family income of Rs.60000 and above at the time ‘before’

securing micro credit, but after securing it has reached to 16.67 per cent which shows an

immense impact of micro credit on family income levels.

Table – 4

Impact of Micro Credit on Shifts in Family Income Levels of Sample Respondents

Sl.No Family Income Levels in Rs. No. of Respondents Families in different

Income Groups as ‘before’ and ‘after’

availing Micro Credit

Before After

No. of Res. Per cent No. of Res. Per cent

1 Up to 19999 18 30.00 03 05.00

2 20000–39999 30 50.00 09 15.00

3 40000–59999 12 20.00 38 63.33

4 60000 & Above 00 00.00 10 16.67

Total Respondents 60 100.0 60 100.0

Source: Field Survey

Note: Per cent to total refers the per centage to the total number ofrespondents.

THE SOCIAL DIMENSION

The Table–5 clearly presents caste-wise changes in family income levels of sample

respondents through micro credit in the study area.

From the Table –5, it is found that with regard to social groups, there was a considerable

positive impact among social groups with regard to growth of average annual income resulted

by micro credit. From the observations it was clear that the sample respondents of Backward

Castes category had around 1.05 times of growth in the average annual income, followed by

71.83 per cent in Other Castes category and 58.86 in Scheduled Caste& Scheduled Tribes

category’s with reference to average annual income levels compared to pre-micro credit

period.

CONCLUSIONS

From the analysis it is evidently proved that micro credit through banking sector in

India has not resulted uniformly in assisting the families of poor women respondents to come

up from below poverty line and to change their primary occupation from agriculture and its

allied activities to non-agricultural activities, which is one of the prime objectives of micro

credit. From the observations of the present study it is found that the considerable number

of the sample respondents have not utilized the total loan amount for productive purposes.

In this connection, it is suggested to the banking authorities that the rural poor should be



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269

given preferential treatment in the disbursement of micro credit and provision of training

facilities regarding to various self-employment programmes and income generating schemes.

From the field experience it was recognised that the majority of women members of SHGs

have no perfection on ideology of financial literature and have no own skills of operating

their account which they could already had. So, it is highly needful to literate the rural poor

for maintaining their accounts by their own and to know the benefits supplemented by the

respective banks in their areas. It is also important that the habit of thrift must be cultivated

by the members who must be motivated to impose self-ceiling on their desires to save more

out of their incremental income and make sound investment for the expansion of their

business or any other income generating activity. This study also concludes that micro credit

alone could not help in uplift the poor and in addition the beneficiaries of micro credit must

be trained with special concentration on job specific or enterprise specific skills in order to

raise the profits through micro credit loan which make them more economically empowered

and finally resulted in overall human resource development in the society.

REFERENCES

1. Hulme D. and Mosley P. (1996), Finance Against Poverty, Vol.2, Route Ledge, London

2. Indira Kumari, Y., Rao B.S, and Rao R.V., “NGOs and Empowerment of Women – A case study of

Sanghamitra service society in Krishna district, published in “Empowerment of Women and Ecologcal

Development” (2000)

3. Muhammad Yunus (2004), Grammen Bank, Micro Credit and Millinium Development Goals, Economic

and Political Weekly (EPW), Vol.XXXIX, No.36, September, 2004

4. PriyaBasu with SreevasthavaPradeep, “Scaling of Micro Finance for India’s Rural Poor”, World

Bank, working paper series-3646, 2005

5. National Council of Applied Economic Research (NCAER), 2008; Impact and Sustainability of SHG-

Bank Linkage Programme, NCAER, New Delhi, India

6. Mohanty (2010), SHG-Bank Linkage Programme, Issues and Perspectives of Studies and Research,

Microfinance world, Jan-March, 2010

7. Report of Expert Group to Review the Methodology for Measurement of Poverty, 2014, Planning

Commission of India, GoI,

8. India in Figures, 2015- MOPSI, GoI, New Delhi



ARTICLE / 37

IMPLEMENTATION OF ANNUAL CREDIT PLANS

FOR FARM FINANCE : AN ANALYSIS

G. Savaraiah, S. Sravani & D. Udaya Santhi

INTRODUCTION

“Access to finance, especially by the poor farmers and vulnerable groups is a pre-

condition for employment, economic growth social cohesion” which in turn, help usher in

greater economic and social equity to held up strong and safe communities, there creating a

confident and democratic India with reduced degree of discrimination and regional in realities.

Credit is vital factor in Indian agriculture since majority of the rural farmers are poor. Hence

agricultural credit becomes poor man’s credit4. Technological transformation and rural

development necessitates the provision of cheap finance for production and investment credit.

Thus, the agricultural credit is of considerable importance in a capital-scarce Country like

India. The Report of the Agricultural Finance Sub-Committee5 was rightly indicated that the

rural credit system to be really useful and effective must take into account and pay attention

to the entire gambit of agriculturists. Credit requirements of the farmers may be three fold

purpose of consumption, production and other social purposes. The advent of Green Revolution

and the new farm technology comprising of high yielding varieties of seeds, fertilizers and

the recent policy decision to undertake wasteland development and a forestation have opened

new vistas in agricultural banking6. The Report on Multi- Agency Approach in Agricultural

Finance highlighted the need for evolving nation’s institutional agricultural credit system to

fill the growing gaps in agricultural credit7. Credit is an important component in maintaining

high levels of production is modern agriculture. Modern agriculture is frequently capital –

intensive and farmers like industrialists, need to borrow, especially for capital inputs such as

farm machinery. The more highly developed the agriculture sector, the greater the amount of

credit needed.

ACHIEVEMENTS OF ANNUAL CREDIT PLAN

Andhra Bank is the Lead Bank for the State of Andhra Pradesh. It is having the

responsibility of preparation and implementation of the annual credit plans and to take decisions

Professor, Dept. of Economics, S.V. University, TirupatiResearch Scholars, Dept. of Economics, S.V. University, TirupatiResearch Scholars, Dept. of Economics, S.V. University, Tirupati

271

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)Implementation of Annual Credit Plans • G. SAVARAIAH, S. SRAVANI & D. UDAYA SANTHI


in the State Level Banker’s Committees regarding fixing the targets for priority sector lending

and sub-targets for other priority sectors and to monitor the performance of participating

banks in the implementation of the annual credit plans in their service area. The details of

achievement of annual plans are presented in Table-1

ANNUAL CREDIT PLANS IN ANDHRA PRADESH

The annual credit plans for the last eight years for the undivided State of Andhra

Pradesh (up to 2012-13) and Navyandhra (from 2013-14 to 2015-16) have shown in table-

2. The table above reveals that there was a two-fold and two and half-fold increase in the

targets and achievements of the total priority sector advances. The percentage of achievements

for priority sector has surpassed the targets for the five years up to 2012-13 except 2008-09

is the undivided Andhra Pradesh. But in case of Navyandhra, the targets have fulfilled during

2015-16 only. The targets and achievements for total agricultural credit have shown impressive

growth i.e. two –fold and three –fold increase respectively during 2008-2013 in undivided

A.P while in Navyandhra, the targets and achievements have shown one-fold and one and

half-fold increase respectively. The targets set for agriculture have achieved more than 100

per cent in all the years except during 2008-09 for undivided A.P and 2014-15 for Navyandhra.

The same trends have appeared in case of achievements of crop loans in both undivided AP

and Navyandhra. But the achievements for agricultural term loans including allied activities

have surpassed the targets for the entire period except 2014-15 in Navyandhra. This may be

attributable to the mounting of overdue with the lanes and the initial and formation period

of Navyandhra. On the whole, the targets set for agricultural credit in the annual credit plans

have fulfilled for all the years except 2008-09 and 2014-15.

DISTRICT-WISE DISBURSEMENTS OF AGRICULTURAL CREDIT

District-wise short-term production loans, agricultural term loans including infrastructural

activities and allied activities, total agricultural loans disbursed and per centage of achievements

of ACP-2015-16 are furnished in the following table-2.

The table-2 shows that the percentage of achievement in the disbursement of agricultural

credit ranges from 50 per cent to 89 per cent up to 30 thSeptember 2015. The highest total

agriculture loans disbursed in Guntur District (14.07 per cent) followed by West Godavari

District (13 per cent), East Godavari (12.28 per cent) and Krishna District (7.50 per cent)

whereas the lowest loan disbursement has made in Vizianagaram (2.86 per cent), Srikakulam

(3.73 per cent), Visakhapatnam (4.81 per cent) and SPS Nellore district (5.30 per cent). This

analysis clearly shows that the developed districts have got more agricultural loans from the

banking sector under annual credit plan 2015-16. The highest percentage of achievement to

the targets of agricultural loans made by the banking sector is found in Anathapur (89 per

cent) followed by Visakhapatnam (88 per cent), Prakasam (65 per cent) YSR district (63 per

cent) and West Godavari district (62 per cent) whereas the lowest percentage of achievement

273

is noticed in Krishna (50 per cent) and Srikakulam (50 per cent). The rest of the districts fell

above 50 per cent and below 61 per cent of the achievement. On the whole, 62 per cent of

the achievement is for Navyandhra Pradesh. The short-term production loans accounted for

more than 79 per cent of the total disbursement of agriculture credit during 2015-16. The

highest amount of short-term production loans was disbursed in Guntur district (14.82 per

cent), West Godavari District (13.20 per cent), East Godavari (12.06 per cent) and Ananthapur

(10.59 per cent) whereas the lowest loan disbursement is found in VizayaNagaram (3.05 per

cent), Srikakulam (3.66 per cent), Visakhapatnam (4.04 per cent) and SPS Nellore district

(4.69 per cent). The lowest achievement in the short-term production targets is due to the

highest number of farmers who did not repay the crop loans to the banks as they are expecting

to waive the old bank loans under the Agricultural Debt Redemption Scheme. The highest

term loans disbursed West Godavari District (13.49 per cent), followed by East Godavari

(13.16 per cent) whereas the lowest amount is available is Vizianagaram (2.14 per cent), and

Srikakulam (4.0 per cent). The above analysis reveals that Vizayanagaram, Srikakulam and

Visakhapatnam districts are badly affected with very low level achievement in both short-term

and term loans disbursements.

Table – 2

Disbursement of Agriculture credit as on 30th September 2015

(Amount in Rs. Crore)

SlNo District Short term Agricultural Total Agriculture % of Achievement

Production Loans term loans loans disbursed

1 Srikakulam 1171.22 329.89 1501.11 49.96

2 Vizianagaram 973.97 176.96 1150.93 56.03

3 Visakhapatnam 1293.04 643.01 1936.05 88.41

4 East Godavari 3855.86 1089.48 4945.34 56.44

5 West Godavari 4222.03 1116.48 5338.51 61.54

6 Krishna 2230.27 788.98 3019.25 49.68

7 Guntur 4740.06 923.76 5663.82 62.73

8 Prakasam 2232.12 692.93 2925.05 64.57

9 SPS Nellore 1498.58 634.05 2132.63 55.46

10 Y.S.R 1844.60 502.02 2346.62 62.86

11 Kurnool 2246.38 416.82 2663.20 58.83

12 Anantapur 3386.10 499.74 3885.84 89.13

13 Chittoor 2284.59 465.51 2750.10 61.32

Total 31978.82 8279.63 40258.45 61.68

Source: Finance (Institutional Finance Department)

Implementation of Annual Credit Plans • G. SAVARAIAH, S. SRAVANI & D. UDAYA SANTHI


DISTRICT-WISE TARGETS AND ACHIEVEMENT FOR ACP-2016-17

The Lead Bank at the State level in its meeting of SLBC has fixed the targets for

various activities of agriculture sector in the Navyandhra Pradesh. The particulars relating to

the district-wise targets are shown in the following table-3.

The government has asked the bankers to provide fresh loans and advances to the

farmers in the latest SLBC meetings. But the government failed to make the banks to fulfil

the targets set for 2016-17 in the Navyandhra Pradesh. To enable adequate credit flow to

agriculture sector targets are set this year for Public sector banks, Private sector commercial

banks, RRBs and Cooperative banks, for agriculture credit. As against the farm credit target

of Rs.36, 580 crore were disbursed during the khariff season. The highest percentage of the

achievement in the crop loans is found in Prakasam district followed by Nellore Ananthapur,

Krishna, East Godavari and West Godavari. The rest of the districts did not fulfil the targets

even 60 percent of achievement. With regard to the term loans only East Godavari reached

near to the target level.

Table – 3

District-Wise Targets and Achievement of Agriculture Credit-2016-17

Sl.No District Target for Sanctioned Target for Sanctioned Total Sanctioned

Crop Loans Term Loans Target

1 Srikakulam 1,446 1,070 582 69 2,028 1,139

2 Vizianagaram 1,223 791 317 95 1,540 886

3 Visakhapatnam 1,428 936 701 451 2,129 1,387

4 East Godavari 4,250 3,847 1,710 1,573 5,961 5,420

5 West Godavari 3,438 2,242 1,576 669 5,014 2,911

6 Krishna 2,912 2,595 1,266 252 4,178 2,847

7 Guntur 5,447 3,721 1,107 327 6,554 4,048

8 Prakasam 2,167 2,802 922 424 3,090 3,225

9 SPS Nellore 1,414 1,552 703 353 2,117 1,905

10 Y.S.R 2,820 2,060 620 327 3,440 2,387

11 Kurnool 4,434 4,180 640 151 5,075 4,431

12 Anantapur 2,705 1,791 652 442 3,357 2,234

13 Chittoor 2,896 1,920 704 373 3,600 2,292

Total 36,580 29,507 11,502 5,532 48,082 35,039

Source: Finance (Institutional Finance Department

LOANS TO LAND LICENSED CULTIVATORS – DISTRICT-WISE:

Andhra Pradesh is the first state in the country to promulgate an Act, “The Andhra

275

Pradesh Land Licensed Cultivators Act, 2011 to provide loans and other benefits like providing

eligibility cards to land licensed cultivators. Under this Act, the Revenue department issued

Loan Eligibility Cards (LEC) to 5, 76,147 tenant farmers in this State. The table-5 presents

the progress in lending to Licensed Cultivators during the last five years.

The number of loan eligibility cards and credit extended to licensed cultivators during

2015-16 (up to September 2015) are shown in Table-4.

Table – 4

Loan and Other Eligibility Cards issued and credit extended to licensed cultivators during 2015-16

(up to Sep, 2015)

SlNo District No. of LECs issued No. of licensed Cultivators

Sanctioned Crop Loans

Renewal New LECs Total Cultivators Amount

of old LECs (Rs in Cr)

1 Srikakulam 7846 7644 15490 670 2.01

2 Vizianagaram 10830 4997 15827 707 0.82

3 Visakhapatnam 5043 9921 14964 1498 2.91

4 East Godavari 84288 16833 101121 39887 81.84

5 West Godavari 110650 112603 223253 23067 43.93

6 Krishna 6037 9369 15406 1024 2.94

7 Guntur 3210 7630 10840 653 3.26

8 Prakasam 13996 0 13996 689 2.28

9 SPS Nellore 6364 1971 8335 202 1.05

10 Y.S.R 12282 10179 22461 10 0.07

11 Kurnool 417 3024 3441 650 1.99

12 Anantapur 4158 1186 5344 715 2.12

13 Chittoor 2475 2961 5436 241 1.66

Total 267596 188318 455914 70013 146.88

Source: Agriculture Department

There are 2, 67,596 tenant farmers who have renewed their old loan eligibility cards.

The revenue department has issued 188318 new cards to the tenant farmers. All together,

there are 4, 55,914 licensed cultivators who are expecting crop loans from the banks. Out of

the total licensed cultivators in the Navyandhra Pradesh, only 70 thousands (15 per cent) have

obtained the crop loans from the banking institutions. The highest numbers of loan eligibility

card holders are found in west Godavari (48.97 per cent) and East Godavari districts (22.18

per cent). Districts in rayalaseema region could not able to cross at least one per cent. But

Kurnool district touched about 5 per cent of the card holders. The rest of the districts are

having less than 5 per cent of the LEC holders. 87 per cent of the licensed cultivators



sanctioned the crop loans of Rs.135.77 crore (86 per cent) in East and West Godavari

districts. The rest of the 11 district did not get even 14 per cent of the crop loan amount. This

analysis reveals the plight of the tenant farmers in getting the crop loans during 2015-16.

PAVALAVADDI SCHEME ON CROP LOANS

Lending crop loans to the farmers at an affordable interest rate through Institutional

finance has been the priority of the Government. Although, there has been a consistent

increase in credit delivery through institutional finance, a large number of farmers are still in

the fold of private finance. To reduce the financial burden of the farmers, the Govt. of A.P

has announced Rythu Sri (Vaddileni Panta Runalu/PavalaVaddi) Scheme on crop loan disbursed.

The Government has announced the interest free crop loans to all farmers’ up to Rs.1.00 lakh

and Pavala Vaddi for crop loans from Rs.1.00 to Rs.3.00 lakhs if repaid in time.

All the loanee farmers who have availed crop loans from financial institutions and

repaid the crop loans within due date are eligible under the scheme. The Govt. will reimburse

the 4 per cent interest amount to the bank account of eligible farmers. During 2010-11, an

amount of Rs.6000.00 lakhs was released under Pavala Vaddi. An amount of Rs.4853.86

lakhs was reimbursed to 5, 38,793 farmers. During 2011-13 an amount of Rs.7500.00 lakhs

was released under PavalaVaddi. So far, an amount of Rs.3863.58 lakhs was reimbursed to

3, 13,390 farmers during 2014-15,an amount of Rs.44.31 crore was settled under

Vaddilenirunalu and Rs. 1.02 crores was settled under Pavalavaddi. During 2015-16, an

amount of Rs.156.80 crore was released under the Vaddilenirunalu as against the allocation

of Rs.172.00 crore. An amount of Rs.9.50 crore was released under the Pavalavaddi as

against the allocation ofRs.10.00 crore. An amount of Rs.527.65 crore have been settled to

0.74lakh farmers accounts (as on Sept. 2015) under Vaddilenirunalu and Rs.10.40 lakh have

been settled to 0.02 lakh farmers’ accounts under pavalavaddi, and the settlement of claims

is under progress.

CONCLUSION

It is concluded that the target for crop loans have been surpassed during the last form

years. However, the farming community has been facing a large credit gap which filled up

by the borrowings from the moneylenders. The Pavala Vaddi Scheme is not reaching to all

the farmers particularly small and marginal farmers in the State due to the non-flexible norms.

Hence, the institutional credit delivery system is to be completely rearranged so that the

weaker sections in the farming activities are to be benefited in rural areas.

REFERENCES

1. Manas Chakrabarti: Rural Banking in India, New Century publications, New Delhi, 2011. P.44.

2. Tripathy, S.N: Institutional credit to agriculture, poverty and micro-finance, published(ED) Rural

Credit, Regional Rural Banks and micro-finance, Dy Bisoyi, T.K. Abhijeet publications, Delhi,

2010.P.155.

277

3. Gosh. A.K: Role of Regional Rural Banks in the current scenario published in (Ed) “Rural Credit,

Regional Rural Banks and micro-finance by Bisoyi, T.K, Abhijeet publications, Delhi, 2010. P.106

4. Savaraiah, G: Rural Banking in India: An Empirical Study, Daya Publications House, New Delhi.

1986. P.117.

5. RBI: Report of the Agricultural Finance sub-committee, Bombay, 1945. P.3

6. Ganesh Kumari.A: Falling Agricultural investment and its consequences; Economic and political

weekly. 1992. P.2

7. RBI: Report on multi-Agency Approach in Agricultural Finance, Bombay, 1978. PP.40-48

8. Shivaji. K: Agricultural finance by Commercial banks, A.P.H Publicizing Corporation, New Delhi,

2012. P.10

9. 179th SLBC of AP meeting Agenda Covered by Andhra Bank- Hyderabad.

10. Govt. of Andhra Pradesh: Socio-Economic Survey-2012-13 P.34.



ARTICLE / 38

ANALYSIS OF THE LINKS BETWEEN PUBLIC

EXPENDITURE ON EDUCATION AND

EDUCATIONAL SECTOR PERFORMANCE IN

ANDHRA PRADESH

Nasir Khan, B.M. Varadaraja S., Vasyanaik B.

ABSTRACT

Like in developed countries expenditure on education in India is also increasing but not

at the faster rate. The governments are facing pressures to increase budgetary allocations to

social sectors, particularly to education and health. Formerly, education was a subject in the

state list, later, it was transferred to the concurrent list, and thus there is a role for both the

union and state Governments in the field of education. This inter alia depends on what are

current levels of spending, what target spending as per cent of income the States assume to

spend on education and given fundamental relationship between income levels and public

expenditures, how fast expenditures can respond to rising income levels. We present analysis

of public expenditures on education using state level public education expenditure data to

provide preliminary analysis on these issues in Andhra Pradesh. We also focus on analysis

of relationship between public expenditure on education and NSDP in Andhra Pradesh .The

study examines whether the financial allocation to education sector has increased over the

years. Loans and advances have been excluded. Educational expenditure as a whole is

considered, the findings suggest that the state governments is allocating only about meagre

per cent of NSDP to education.

Key words: Public expenditure of education, elasticity, NSDP, CAGR, ADF and unit root

test

Asst Professor, Dept of P.G. Studies in Economics, Sir MV College, Bhadravathi-Karntaka.Asst Professor, Dept of P.G. Studies in Economics, Sir MV College, Bhadravathi-Karntaka.Asst Professor, Dept of Studies in Economics, Govt first grade college Aynur, Shimoga (dist).

279

ARTICLE / 39

ECONOMIC STATUS OF CONSTRUCTION

WORKERS : A CASE STUDY IN TIRPATI

TOWN OF CHITTOR DISTRICT

K. Radhika

ABSTRACT

The construction sector is an important sector of the economy and contributes significantly

to GDP. According to the NSSO estimates, about 5.57 percentages of workers are engaged

in building and other construction work. There are around 500,000 construction workers in

Andhra Pradesh state alone. The construction industry is one of the largest and oldest industries

to be generating employment in India, next to the agriculture sector. The construction workers

are regarded as the prototype of extremely demanding jobs tagged as 3-D: dirty, dangerous

and difficult. They have scarcity of money to cater to the needs of their family members. The

local construction workers suffer from chronic unemployment due to the availability of large

numbers of migrant workers who are, willing to work at lower wages.

Tirupati is one of the fastest growing cities in the India. There is a high need of

construction workers in Tirupati city, consequently more number of workers migrate from

different parts of country. There is a need for information regarding their socio-economic,

working conditions and its impact on their life, problems they have been facing. There are

many studies done in the past on life of female construction workers. Very few studies are

available for life and working condition of construction workers. This prompted us to undertake

this study on construction workers.

From this study, it is observed that migration compounded by illiteracy, poor working

conditions, lack of infrastructures and security, sanitation, inadequate health service utilization

made these workers a vulnerable population. It may be said that the construction workers are

working in an unorganized sector and special policies need to be initiated to protect this

group. They are not satisfied with their wages and are ignorant about the social welfare

measures available to them. The working conditions along with their health have lots of scope

for improvement. There is a need to enforce the existing laws more stringently. Parents need

to be counselled regarding the importance of education. A more healthy and satisfied workforce

would lead to better productivity. Hence this study recommends a comprehensive, universal

and integrated Social Security System for these unorganized construction workers.

Assistant Professor, Department of Economics, S. V. University, Tirupati.

THEME - VI

PERFORMANCE OF SOCIAL SECURITYPROGRAMMES IN ANDHRA PRADESH

ARTICLE / 40

PUBLIC PRIVATE PARTNERSHIP IN

SCHOOL EDUCATION : ROLE OF THE

AKSHAYA PATRA IN MID DAY MEAL

SCHEME IN VISAKHAPATANAM CITY

K. Manjusree Naidu, M. Sudha & G. Raghavaiah

INTRODUCTION

Public-Private-Partnership (PPP) is a mode of implementing government programmes/

schemes in partnership with the private sector. The term private in PPP encompasses all non-

government agencies such as the corporate sector, voluntary organizations, self-help groups,

partnership firms, individuals and community based organizations.

Public-Private-Partnership (PPP) provides an opportunity for private sector participation

in financing, designing, construction and operation & maintenance of public sector programmes

and projects. A number of welfare programmes especially in primary and upper primary

education are initiated with community participation and through voluntary organizations.

There are many benefits of using PPP model and the primary benefit is to deliver efficient

services to the society. PPP model is used in all the sectors and government identified this

as an effective tool to deliver social sector infrastructure by focusing on reducing government

spending. Among the social sector infrastructure education and health are two important areas

which are given top priority by the government for achieving inclusive growth and sustainable

development.PPP model is highly successful around the world particularly in education and

health sector and created a milestone in transforming the society. In India PPP model is

gaining momentum in education and health sector due to inadequate government funds and

ineffectiveness. The present study made an attempt to analyze the importance of PPP in

education sector.

OBJECTIVES

1. To assess the role of PPP model in school education.

Associate Professor, Gitam Institute of Management, GITAM University, Vishakhapatnam.Assistant Professor, Gitam Institute of Management, GITAM University, Vishakhapatnam.Professor, Gitam Institute of Management, GITAM University, Vishakhapatnam.


2. To evaluate the impact of mid day meal scheme on primary and upper primary

student academic performance and health .

3. To know the opinions of important stake holders feedback on Akshaya Patra Scheme.

4. To analyze the parent profile of students using mid day meal scheme.

LINKAGE BETWEEN HEALTH AND EDUCATION

There is a very effective link between health and education because malnutrition and

under nourishment on one side leads absenteeism and on the other side affect adversely

academic performance. The Existing mid day meal scheme is unable to focus on nutrition

levels and hygiene. Human development index and Sustainable development goals emphasizes

the importance of human resources in the economic growth of a country. To achieve these

goals government should focus on grass root issues such as quality primary education, school

enrolment, malnutrition, poor health conditions, absenteeism and poor academic performance

etc. So there is a need to focus on nutritious food and its influence on education. Education

can significantly improve the quality of life of a family for generations to come. When the

basic needs of a child, such as food are not met, education often becomes the last priority.

REVIEW OF LITERATURE

A research paper by Stephanie Bonds from the University of California, Berkeley,

arrived at an important conclusion that mid day meal scheme was highly useful to children

particularly from the lowest socio-economic backgrounds. The paper highlights that mid day

meal scheme was more prominent among the children whose parents were less educated

parents and belong to lowest economic status.

The report of Planning Commission on performance evaluation of Mid-Day Meal Scheme

observed that most of states did not follow the guidelines of Government of India in delivering

the food grains at the school point by PDS dealer, thereby resulting in the leakage of supply

chain, food grains supplied got adulterated and pilfered. According to 5th Joint Review

mission (2013) study in Uttar Pradesh shows that meal is not cooked regularly in the school

premises because of the disruption in the supply of food items, thereby the nutrient intake of

children was adversely affected.

CURRENT PRACTICES AND ISSUES IN MID DAY MEAL (MDM) SCHEME

“National Programme of Nutritional Support to Primary Education (NP-NSPE)”was

launched on 15th August 1995. The Scheme was extended during 2008-09 to cover children

of upper primary classes and the name of the Scheme was changed as ‘National Programme

of Mid-Day Meal in Schools’. At present all the Government primary and upper primary,

Government-aided Local Body Schools, National Child Labour Projects Schools, the centre

run under Education Guarantee Scheme (EGS)/Alternative & Innovative Education (AIE),

285

Madrasas and Maqtabs supported under SSA are covered under Mid-Day Meal Scheme.

According to MHRD annual report 2013-14 the Mid Day Meal Scheme covered 10.68 crore

elementary class children in 12.12 lakh schools in the country. India’s Mid-Day Meal Scheme

is one of the largest food assistance programs in the world with a 2013-2014 budget. Of

Rs.30 billion ($490 million) managed by the Ministry of Education being linked with nutrition

education and related educational activities. An overview of the outlay for Mid-day meal

scheme is presented in table-1.

Table – 1

Year Wise Outlay under Mid Day Meal Scheme (Rs. In crore)

Financial Year BE RE Releases

2016-17 9700.00 —- 5471.99 56.41

(as on 26-09-2016)

2015-16 9236.40 9236.40 9151.55 99.08

2014-15 13215.00 11050.90 10526.97 95.26

2013-14 13215.00 12189.16 10927.21 89.65

2012-13 11937.00 11500.00 10867.9 94.50

2011-12 10380.00 10239.01 9901.91 96.71

2010-11 9440.00 9440.00 9128.44 96.70

2009-10 8000.00 7359.15 6937.79 94.27

2008-09 8000.00 8000.00 6539.52 81.74

2007-08 7324.00 6678.00 5835.44 87.38

Source: http://mdm.nic.in/

The table-1 shows the government spending on Mid Day Meal Scheme in this decade

almost 95 to 99 percent of the revised estimated budgets allocated was spent on providing

Mid-day to children.

NORMS FOR MID-DAY MEAL SCHEME AS PER THE ANNUAL REPORTS OF

MHRD-2013-14

Table – 2

Calorific Value of mid-day meal at Primary and Upper primary stage children

S.No Item (In Grams) Primary School Upper Primary

Children School Children

1 Food grains (rice/wheat/nutria-rich cereals) 100 150.0

2 Pulses 20 30.0

3 Vegetables 50 75.0

4 Oil/fat 5 7.5

Source : Annual Report MHRD 2013-14

Public Private Partnership in School Education • K. MANJUSREE NAIDU, M. SUDHA & G. RAGHAVAIAH


The items shown in table 2 provide 450 calories of energy and 12grams of protein for

primary school children and 700 calories of energy and 20 grams of protein for upper school

children.

IMPLEMENTATION OF THE MID-DAY MEAL SCHEME

i. The overall responsibility for providing cooked and nutritious mid day meal to the

eligible children lies with the State Governments

ii. School Management should also be encouraged to draw the support of the community

especially mothers’ groups in ensuring efficient cooking, serving and cleaning

operations

iii. Healthy and hygienic practice to be ensured as per the prescribed guidelines

iv. Funds are released in two installments for uninterrupted implementation of the scheme.

NEED FOR PPP MODEL FOR SUCCESSFUL IMPLEMENTATION OF MID DAY

MEAL SCHEME

There is a gap between the norms for implementation of the mid day meal scheme and

the issues in the implementation process. Hence it is high time to see the alternative methods

for the effective implementation of the scheme.PPP is one of the best methods for the

effective utilization of government expenditure and to reach the target beneficiaries.

The primary benefits of using PPP to deliver services include:

i. Government expenditure can be efficiently used for the purpose it is allotted.

Greater efficiency can be achieved due to private partners operational and management

efficiency.

ii. Accountability and transparency of the private partner for the allotted project is

measured through social audit.

iii. Cost-effectiveness is key factor for the success of any project. Private partner focuses

on cost effectiveness in the allotted project .

iv. Higher Productivity is expected within the project because payments is linked to

performance

v. Clear Customer/beneficiary Focus because the selected private partner strives for

attaining high level of customer/beneficiary satisfaction.

AKSHAYA PATRA: THE PRIVATE PARTNER FOR IMPLEMENTING THE MID-

DAY MEAL SCHEME

In 2000, The Akshaya Patra Foundation was founded to address the dual challenges of

hunger and education in India. The organization provided nutrition-rich midday meals to

287

extremely underprivileged children in India with the aim of increasing school enrollment,

reducing drop-out rates, and improving academic performance. The Akshaya Patra program

had a simple vision: “No child in India should be deprived of education because of hunger.”

Because of India’s enormous population, this vision was difficult to realize.

Srila Prabhupada was the inspiration behind starting the Akshaya Patra Foundation in

2000 to open a temporary kitchen in Bangalore, India, to provide mid-day meal for students

at five local schools. Today, the program uses 19 centrally located kitchens to deliver hot

meals to schools across nine states in India. The success of this foundation delivery of quality

mid day meals for school children has resulted in reducing hunger, increased school enrollment,

regular attendance and developing hygienic habits like hand wash before the food intake,

cleaning the plates etc, and addressing chronic malnutrition.

THE AKSHAYA PATRA FOUNDATION: APPLAUDS AND AWARDS :

i. This is a very important and great mission -Dr.A.P.J.Abdul Kalam, Former President

of India

ii. Rajyotsava Award 2003" from Karnataka by the then Chief Minister Sri. S M Krishna.

iii. Government of Rajasthan Independence Day Award 2006 from then Governor – Smt.

Pratibha Devisingh Patil.

iv. CNBC IBL Awards confers “Social Enterprise of the Year 2008” to ‘The Akshaya

Patra Foundation’

v. Gold Shield from ICAI awards for EXCELLENCE in FINANCIAL REPORTING –

MARCH - 2009

vi. Distinguished Alumnus Award 2010, IIT Mumbai

vii. International acclaim: US Congressional Hunger Centre (CHC) awarded the

International Fellow to Akshaya Patra out of 35 social organizations around the

world. World Economic Forum invited Akshaya Patra to share its experiences for

THE PROJECT HUNGER in Africa

viii. National Awards for Innovations in services for Akshaya Patra was awarded by the

Indian Urban Space Foundation as the Best Innovative Project for the Innovations in

Services for Urban Poor.

ix. Reorganization from Limca Book of Records for providing food to one million

children

AKSHAYA PATRA MID-DAY MEAL SCHEME IN VISAKHAPATANAM

AkshayaPatra foundation began its operations as an NGO in Visakhapatnam in October

2008 and currently feeds 16810 students in the schools in the urban areas of Visakhapatnam.

Akshaya Patra Foundation also provides food in 307 Anganwadi centers covering 39320

children.



FINANCIAL IMPLICATIONS OF MID DAY MEAL SCHEME

Table –3

The coverage and expenditure trends for the scheme

Components 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14

Children covered (in cr.) 11.37 11.19 11.36 10.46 10.54 10.68 10.35

Total expenditure (in cr.)** 5835.44 6688.02 6937.79 9128.44 9901.91 10868.00 10805.00

Per child expenditurePer annum (in Rs.) 513.23 597.68 610.72 872.70 939.46 1017.60 1043.96

Expenditure per day per child (in Rs.) 1.41 1.64 1.67 2.39 2.57 2.79 2.86

Primary and Upper Primary combined** includes cost of food grains.

Source: Annual Report MHRD 2013-14

The data in table-3 provides the trends in coverage and expenditure of mid day meal

scheme during the period 2007-2008 to 2013-14. The total beneficiaries of the scheme more

or less remain the same around 10.04 to 11.04 crore per annum during the period under

consideration, but expenditure was doubled from Rs.5835.44 crore to Rs. 10805.00 crore. So

on an average per day expenditure per child increased from Rs 1.41 to Rs 2.86.

Contribution of Government and Akshaya Patra Foundation for mid day meal scheme

during the survey

i. 1st to 5th Class children’s per child per day Govt contribution Rs 4.60.

ii. 1st to 5th Class children’s per child per day Govt. rice contribution 100grams at free

of cost

iii. 6th to 10th Class students per child per day Govt contribution Rs 6.38

iv. 6th to 10th Class students per child per day Govt rice contribution 150grams free of

cost

v. Cooking and Transport cost Rs 9 to Rs 10

vi. The Akshaya Patra Foundation Contribution Rs 3.62.

ANDHRA PRADESH GOVERNMENT ORDER 31 DATE 26/2/2016

Further keeping the increasing costs recently in February 2016 government revised the

mid day meal scheme cost per day to Rs 4.86 for primary school and Rs 6.78 for upper

primary school but to provide better nutritious food it costs more than what government is

currently spending. This can be observed from expenditure made by Akshaya Patra scheme.

The comparative amounts are presented in table-4.

From the expenditure as shown in table-4 for the Mid-Day meal scheme in Visakhapatnam,

the share of the Government expenditure for 6954 primary school children is 55.96%, for 444

upper primary school children share it is 63.80% and for 9412 high school children it is

289

63.80%.The expenditure share of Akshaya Patra from total expenditure for primary school

children is 44.04%, 36.20% for upper primary school children and 36.20% high school

children.

Table – 4

Mid Day Meal Scheme Expenditure by the Government and Akshya Patra Scheme

Description Primary School Upper Primary School High School

Total Number of students (16810) 6954 444 9412

Government Expenditure 31988.4(55.96%) 2832.72(63.80%) 60048.56(63.80%)

Akshaya Patra 25173.48(44.04%) 1607.28(36.20%) 34071.44(36.20%)

Total Expenditure 57161.88(100.00) 4440.00(100.00) 94120.00(100.00)

Source: Akshaya Patra Foundation,Visakhapatnam.

An interesting observation from the above analysis is the expenditure towards Mid-day

meal scheme is shared between the public and private sector in the ratio of 55% to 60 % of

the government and 40% to 45% by Akshaya Patra. Akshaya Patra Foundation was successful

in providing the food as per the calorie value norms of mid day meal scheme without having

any problems. With the PPP model government in this case, could improve the nutritious Mid

Day Meal without any additional financial burden for the government.

DATA ANALYSIS

This section provides a brief understanding on the opinions of the beneficiaries of the

MDM scheme. For this, the opinions of 200 students who were aware about the scheme and

its benefits, 20 teachers and 12 head masters are collected through a structured questionnaire

from various schools covered under the scheme were randomly interesting. The data was

collected 58 percent are boys and 42 percent girls in the category of primary, upper primary

schools and high schools. About 93 percent of the students’ father or both the parents work

as daily wage earner. Following are the findings of the survey pertaining to health, absenteeism

and academic performance.

Table – 5

Attendance of the Students

Responses/Opinions Percentage

Daily 78

Alternate 12

Weekly 10

Total 100



As per the data collected, 78% of the students have attended the classes regularly and

12% of the students attended the school alternate days and 10% of the students were found

attended once in a week due to domestic commitments.

Table – 6

Opinion about the taste of the food served in the school


Satisfactory 77

Not satisfactory 08

Neutral 15

Total 100

The data in table-6 indicates that, 77% of the respondents said that they are satisfied

with the taste of the food served by Akshaya Patra and 8% of the student said they were not

satisfied. About 15% of the students were neutral in their opinion.

Table – 7

Is the mid-day meal scheme motivating you to come to school daily


Yes 81

No 19

Total 100

Table – 8

Academic performance of the students


Excellent 02

Good 73

Average 10

Below Average 15

Total 100

As per the opinions of the Headmaster/teachers there was a significant improvement in

the academic performance of the students of their schools, around 75% of the students shown

an excellent to good academic performance.

FINDINGS

1. Mid-Day Meal Program has been successful in addressing classroom hunger in sample

schools.

291

2. In general, visible shortage of basic infrastructural facilities and manpower, the key

success factors of the Mid-Day Meal scheme, were addressed.

3. Mid-Day Meal Scheme seems to have contributed to an increase in the attendance

in schools across the sample schools.

CONCLUSION

In India PPP model is gaining momentum in education and health sectors because of

inadequate government funds and ineffectiveness of existing schemes. Quality of human

resources depends on health and education, particularly primary education. There is a gap

between the MHRD specified norms for mid day meal scheme and present implementation

practices. In this context the best alternative for the government is to identify the best private

partner to implement the mid day meal scheme through PPP model. The Akshaya Patra

Foundation received applauds in India and across the world for serving quality food to school

children which helped in increasing school enrolment rate and regular attendance.

MDM scheme is not just a feeding program with a Philonthrophical motive, but it is

an important commitment towards proper nourishment of future generations of India and to

improve the enrolments and academic performance at the school level. This model of PPP

with right private partner in Visakhapatnam schools proved to be a beneficial model for both

government and the public in terms of reducing the financial burden of the state and to

improve health of the students. Social Protection Schemes functions as an important mechanism

for improving the health, attendance to schools and academic performance of students

particularly in Elementary and Upper Primary Schools.

REFERENCES

1. Annual Report MHRD 2013-14.

2. Akshaya Patra Foundation,Visakhapatnam.

3. David Upton Christine Ellis Sarah Lucas Amy Yamne ,Harvard Business School,R : Akshaya Patra:

Feeding India’s Schoolchildren, December, 1 7 , 2 0 0 7.

4. Ramachandra Kamath ,Ananthapadhmanaba Achar ,Mr Bharath Shetty,A report on Measuring the

Impact of Mid- Day-Meal on Child Growth,Manipal University, Manipal, India September 2012

5. Saluja N, Bhatngar M, Garg SK, Chopra H, Bajpai SK .Nutritional Status of urban primary school

children in Meerut. The Internet Journal of Epidemiology 2010; 8 (1) .


ARTICLE / 41

MAHATMA GANDHI NATIONAL RURAL

EMPLOYMENT GUARANTEE ACT IN

ANDHRA PRADESH

Shaik Ameer

ABSTRACT

This paper is a modest attempt to evaluate the impact of MGNREGA on employment

generated, wages paid and wages spent by the beneficiaries of the scheme. After providing

the salient features of the scheme, an attempt was made to present the functional details of

MGNREGA in 13 districts of Andhra Pradesh with reference to the year 2015-16. The

discussion in this paper is based on primary data collected from 300 beneficiaries under the

scheme covering 12 mandals in Anantapur, East Godavari and Visakhapatnam districts. The

data were analyzed by preparing tables on awareness about the scheme, duration between the

issues of job cards and provision of employment, no. of days of employment provided and

amount of wages paid. Specifically, an attempt was made to study how the wages received

under the scheme and spent by the sample beneficiaries. It was observed that majority of the

beneficiaries have spent on improving their irrigation works, educating their children, purchase

of medicines and other health related items of expenditure. The author suggests that the

scheme should be implemented in the off-seasons and special attention should be paid to

provide employment to SCs and STs. The author cautions about potential interference, which

dilutes the spirit of the scheme.

Key Words: MGNREGA, Job cards, Employment Generation, Wages Paid and Wage spent

Academic Counsellor, Department of Economics, Centre For Distance Education, Acharya NagarjunaUniversity, Guntur, Andhra Pradesh

ARTICLE / 42

PUBLIC DISTRIBUTION SYSTEM AND

FOOD SECURITY IN ANDHRA PRADESH

G. Savaraiah & M. Kumar Raju

The poverty alleviation and eradication of hunger are two vital objectives of rural

development programmes in India. Among various programmes of poverty alleviation and

hunger mitigation, the public distribution system (PDS) is considered as a means of income

support and social protection in the rural India. The euphoria on the self-sufficiency in food

grains in India is to a large measure misplaced. It India since Independence has been starving

off famines and deaths on account of starvation, there are huge area of near – saturation for

the bulk of the people and gross distributional inequalities. There is the paradox of grains

lying, even rotting, in warehouses and people starving in the outbacks. The World Food

Conference in Rome in mid-seventies arrived at a very poignant conclusion. Nothing more

overwhelms the human spirit or mocks our values than the desperate struggle for sustenance.

No tragedy is more than the look of despair in the eyes of a starving child. The World Food

Conference, convened by the General Assembly of the United Nations, adopted a famous

declaration on the eradication of hunger and malnutrition. The declaration had urged the UN,

the developed countries of the World and developing Third World to undertake a constructive

programme which should be multipronged as well as bold and meaningful. What Ghandhi

said of the role of food in a human being’s life in a 1946 speech at Noakhali, now in

Bangladesh, remains the most powerful expression of the importance of making access to

food a basic human right. Gandhi also wanted that the pathway to ending hunger should

involve opportunities for everyone to earn their daily bread, since the process of ending

hunger should not lead to the erosion of human dignity. Sixty –six years after Gandhi’s

Noakhali speech, India is still home to the largest number of under nourished and malnourished

children, women and men in any country. The number of people going to bed partially hunger

now is more than the entire population of India in 947. This is true even today; the latest

National Sample Survey (NSSO) has exposed the lopsided development of the country. It

points out that about 58 percent of the farmers starve every day. Its findings resent an

appalling picture that the farm sector has become a losing proposition for most farmers.

Professor, Department of Economics, SVU College of Arts, TIrupati.Academic Consultant, Department of Economics, SVU College of Arts, TIrupati.


PER CAPITA CONSUMPTION OF FOOD GRAINS

India’s biggest challenge still remains ensuring food and nutritional security to its

masses. It is the right of every person to have regular access to sufficient and nutritionally

adequate food for an active and healthy life. A country can be said to have achieved complete

food and nutrition security if each and every person in that country is able to consume an

adequate and balanced diet on a regular basis 5. Gross Domestic Product has increased 4.5

times and per capita consumption has increased 3 times. Similarly, food grain production has

increased almost 2 times. However, despite phenomenal industrial and economic growth and

while India produces sufficient food to feed its population, it is unable to provide access to

food to a large number of people, especially women and children 6. Sufficient food production

is not the only criteria to provide food security in a country and eliminate hunger. Nearly 40

per cent of all fruits and vegetables and 20 per cent of food grains that are produced rot due

to inefficient supply chains and never reach to the consumer markets. The household living

below poverty line (BPL) do not have sufficient means to ensure food and nutritional security.

NSSO data reveals that BPL households in rural India are spending as high as 70 per cent

of the consumption expenditure meeting their food requirements and the situation is similar

with APL (above poverty line) which spends 50 per cent on the same. The urban working

class spends nearly 30 per cent.

STATE OF HUNGER IN INDIA

Hunger in India is a common phenomenon. It is widespread and causes are different

across various sections of the society and the States. It is indeed alarming that not a single

State in India is either low or moderate in terms of its index score, most States have a

“serious” hunger problem and one State, Madhya Pradesh, has an extremely alarming hunger

problem. According to latest FAO estimates in the State of Food Insecurity in the World

(2014) 190.7 million people are undernourished in India. By this measure, India is the home

to a quarter of all undernourished population in the World. Also 51 per cent of women

between 15 to 59 years of age are anemic and 44 percent of children under 5 are underweight.

Mal nourished children have a higher risk of death from common childhood illness such as

diarrhea, pneumonia, and malaria. India is also amongst the most undernourished in peer

group nations. The Global Hunger Index ranks India at 63 out of 78 countries on the basis

of three leading indicators- prevalence of underweight children under 5 years, under 5 child

mortality rate, and the proportion of undernourished in the population.

PUBLIC DISTRIBUTION SYSTEM IN ANDHRA PRADESH

India’s public distribution system (PDS) is perhaps the largest of its kind anywhere in

the World. The Public distribution system is among the most important food security

programmes of government of India8. In fact, the PDS in the country to facilitates the supply

of food grains to the poor at a subsidized price 9. The targeted public distribution system was

295

introduced in the state of Andhra Pradesh and elsewhere in the country in 1997 with a view

to eliminate hunger. The PDS supplies essential commodities like rice, kerosene, sugar,

palmolein oil, wheat to the poor at subsidized prices. The Telugu Desam was introduced

cheap rice at Rs.2 per Kg in the state. The fair price shops are the major outlets under public

distribution system. The number of fair price shops are functioning in the state are shown in

table-1.

Table – 1

Number of fair price shops in Andhra Pradesh

Year Urban Rural Total

2007-08 7285 32845 40130

2008-09 6879 35758 42637

2011-12 6747 37832 44579

2012-13 7393 37385 44778

2013-14 4367 24325 28692

Source: GOAP-Socio-Economic Surveys.

Table-1 show that the number of the total fair price shops has increased by 4648 in

2012-13 over 2007-08, registering an increase of 11.58 percent. Thereafter, the number of fair

price shops in A.P has declined to 28692 in 2013-14. The rural fair price shops constituted

84.8 per cent in 2013-14 as against 81.85 percent in 2007-08. During 2013-14, the number

of fair price shops has considerably declined due to political compulsion. On an average, each

shop has 535 cards / families. There is one shop for every 1965 persons in Andhra Pradesh

as against the Government of India norm of one fair price shop for every 2000 persons.

RATIONALIZATION FAIR PRICE SHOPS

Rationalization of existing F.P. Shops has been done to ensure effective functioning of

PDS, and enable card holders have easy access to fair price shops without having to travel

long distances. Rural areas: 400 to 450 BPL and 50 Pink ration cards are attached to each

F.P. shop in rural area. Urban Areas: 500 to 550 BPL and 250 Pink ration cards are attached

to each F.P. shop in urban areas. Municipal Corporations: 600 to 650 BPL and 250 Pink

ration cards are attached to each F.P. shop in Municipal Corporations

DISTRIBUTION OF RATION CARDS

Purchase of subsided commodities from the PDS outlets is contingent on households

possessing a ration card. When the PDS became targeted in 1997 with grater stress on

reaching to the poor with a higher allocation to them, it became important to distinguish

between poor and non-poor. Based upon estimates by the Planning Commission, the population

was divided into BPL and APL categories. At the time of introduction of targeted public

Public Distribution System and Food Security in Andhra Pradesh • G. SAVARAIAH & M. KUMAR RAJU


distribution system, BPL households were entitled to 10 kilogram (kg) of grains at a much

lower price than APL households. Based upon the state-wise poverty level, the Central

Government had to supply to the States their BPL requirement of rice and wheat together with

an additional allocation for the APL households in each State. In April 2000, the size of the

food grain ration to the BPL households was raised further from 10 to 20 kg per month at

a price of 50 per cent of the economic cost of the Food Corporation of India. The price of

APL food grains was raised to the full economic cost, thus completely eliminating the price

subsidy. With effect from April 2002, grain entitlement for both APL and BPL households

was increased to 35 kg per family per month. In December 2000, another category of households

were added under the “Antyodaya Anna Yojana (AAY)” catering to the poorest of the poor

with a much lower price. Under this scheme, poorest of the poor families from amongst the

BPL population covered under targeted public distribution system were identified and provide

food grains at Rs.2 and Rs.3 per kg. For wheat and rice respectively. The costs of distribution

have to be borne by the state governments. With effect from 1 st April 2002, the entitlement

under AAY was increased from 25 to 35 kg per month. There are three kinds of ration cards

distributed by the state government: APL, BPL and AAY10.The district- wise distribution of

ration cards and the distribution of rice are presented in table 2.

The table-2 reveals that the highest number of fair price shops are located in Anantapur

district (10.05 per cent) followed by Chittoor (9.86 per cent), Guntur (9.42 per cent) and East

Godavari (8.91 per cent) districts whereas these shops are low in Vizayanagaram district (4.71

per cent) followed by Y.S.R kadapa (6.01 per cent) S.P.S. Nellore (6.69 per cent), Srikakulam

(6.92 per cent) and Vishakhapatna (6.93 per cent) districts.

Out of the total white cards (10688214), the highest number (13 per cent) of the white

cards are found in East Godavari followed by Krishna (9.97 per cent), West Godavari (9.56

per cent) and Kurnool district (9.30 per cent) whereas the lowest number of white cards are

noticed in Guntur district (1.17 per cent) followed by Vizayanagaram (5.08 per cent), Y.S.R.

Kadapa (6.10 per cent) and Srikakulam (6.37 per cent). The highest number of Pink cards

are available in Vishakhapatnam (20.57 percent) followed by Krishna (16.12 percent), East

Godavari (15.99 per cent) and Guntur district (14.87 per cent). The lowest number of Pink

cards is found in Srikakulam (5.64 per cent) Kurnool (7.13 per cent), Y.S.R Kadapa (7.54 per

cent) and Anantapur (7.97 per cent). The New white cards issued to BPL families in the

Rachabanda Programme. The highest number of new cards issued to the poor Srikakulam

(12.59 per cent). Y.S.R. Kadapa (12.56 per cent), Krishna (9.54 per cent) and West Godavari

(9.33 per cent) district. In A.P, 9.75 lakh Antyodaya Anna Yojana (AAY) cards are in circulation

as on 31-03-2014. Out of this, the highest number of cards are found in Anantapur district

(11.35 per cent) followed by Chittoor (9.31 per cent), Vijayanagaram (9.24 per cent), and East

Godavari (8.89 percent). On the whole, East Godavari and Krishna districts have benefitted

more in getting all types of ration cards.

297

Table – 2

Ration Shops, Ration Cards and Deepam Connections-2013-14

SlNo District Ration Ration Cards AAY Distribution of L.P.G

Shops cards Rice in Mts Connections

(White+ under

Rachabanda+ Deepam

AAY) Scheme

White Pink Rachabanda AAY

1 Srikakulam 1987 681477 58271 111241 52630 11088.234 129964

2 Vizianagaram 1352 543037 0 80469 90111 11038.525 123939

3 Visakapatnam 1989 984671 212459 55152 77517 17399.855 215687

4 East Godavari 2557 1349135 165162 51527 86746 20695.072 261156

5 West Godavari 2092 1022372 111455 82474 73284 15694.352 242571

6 Krishna 2145 1066595 166580 84296 70040 16227.736 255187

7 Guntur 2704 125349 153625 54703 82196 19354.304 258352

8 Prakasam 2096 780563 86060 41937 52133 12609.019 162170

9 S.P.S.Nellore 1921 712900 111299 56939 65929 12602.387 150355

10 Y.S.R Kadapa 1725 652655 77892 110938 62265 11294.263 155823

11 Kurnool 2409 994661 73659 79718 60746 17529.874 159062

12 Anantapuram 2885 896379 82376 43048 110724 17399.664 221748

13 Chittoor 2830 878420 135801 30592 90848 15382.288 245842

Andhra Pradesh 28692 10688214 1032833 883034 975169 198315.573 2581856

Source: GOAP: (2014) Commissioner, Civil Supplies.

The LPG connections under Deepam Scheme are provided to the women members of

the self-help groups (SHGs) in Andhra Pradesh. The highest number of LPG connections is

found in the East Godavari district (10.11 per cent), followed by Guntur district (10.00 per

cent), Krishna (9.88 per cent) and Chittoor district (9.52 per cent) whereas the lowest number

is noticed in Vijayanagaram followed by Srikakulam(5.03 per cent) and Y.S.R Kadapa district

(6.03 per cent). On the balance, Vijayanagaram, Srikakulam and Y.S.R districts have not

received their due share in the allotment of ration cards as well as LPG connections under

Deepam Programme.

DISTRIBUTION OF SUBSIDY RICE

Government of Andhra Pradesh has given top most priority to supply of rice at subsidized

rate to below poverty line families through Targeted Public Distribution System line (TPDS).

Since 1-11-2011, rice is being supplied at Rs. 1 per Kg. to all white cardholders and AAY

cardholders. It is an important constituent of the strategy for the up liftment of below poverty



line (BPL) population. The endeavor of the Government is to implement TPDS effectively,

efficiently and transparently for the best advantage of beneficiaries. Requirement of rice for

eligible card holders (white cards etc) is 1.98 lakh MTs per month. At present 9.75 lakh AAY

families are being supplied 35 Kg rice at Rs. 1 per Kg per family as against the target of 9.08

lakh AAY families. A quantity of 34217 MTs of rice is being supplied under AAY scheme

at Rs. 1 per Kg against the allotment of 31798 MTs per month. A total of 1.98 LMTs of rice

is being supplied to all BPL cardholders every month under PDS. The requirement of rice is

being met out of the allocation of 74493 MTs (i.e. 51131 MTS as regular and 23362 MTs

as additional ad hoc allocation) of BPL rice 31798 MTs of AAY rice, 499 MTs of Annapurna

rice and the remaining quantity from the APL rice of 890.92 MTs per month allotted by the

Government of India and the difference in cost of rice is being borne by the Government as

subsidy. The highest quantity rice (white cards + Rachabanda + AAY cards) is supplied to

the BPL card holders under PDS can be found in East Godavari district (1043 per cent)

followed by Guntur (9.75 per cent), Kurnool (8.83 percent) and Vishakhapatnam (8.77 per

cent). But the backward districts like Srikakulam(5.59 per cent) and Vizianagaram (95.56 per

cent ) districts require the lowest quantity of rice.

KEROSENE

A considerable number of poor families need kerosene for lighting and coking purposes

in the rural areas and urban slums. The power cut frequently occurs during the nights in the

rural areas. Hence, they are badly in need of the kerosene. 22668 KLs. of Kerosene is

allocated per month for distribution to all BPL cardholders.

PALMOLEIN OIL

The Civil Supplies Corporation purchases imported RBD Palmolein oil under Government

of India subsidy scheme at Rs. 15 per Kg or Rs. 13.65 per liter and makes it available for

distribution through PDS to BPL families at subsidized rates. All BPL card holders are being

supplied 1 liter per card at Rs. 40 /- per liter. Presently, the scheme is being run by the state

Government. The average off take per month during this year is 10604 MTs and consumed

by 1.16 Crore cardholder families.

AMMA HASTAM SCHEME

Government of Andhra Pradesh launched a scheme called “Amma Hastam” from 11-

04-2013. Under this scheme nine Essential Commodities Viz. 1 ltr Palmolien Oil 1 Kg Red

gram dhal, ½ Kg Sugar, 1 Kg Wheat, 1 Kg whole meal Atta, Chilly 250 Grams Powder, ½

Kg Tamarind, 100 Grams Turmeric Powder and 1 Kg iodized Salt are being supplied in

packed form at Rs. 185/-

The main objective of the scheme is to provide relief to BPL families from price rise

and to ensure supply of unadulterated quality and correctly weighed commodities in a packed

299

form. The cardholders can get benefit of Rs. 107/- per month against the present open market

price of Rs. 292/ for the essential commodities. In fact, it is a boon to the poor families who

afford at concessional rates.

SOCIAL WELFARE INSTITUTIONS (SWI) & SOCIAL WELFARE HOSTELS (SWH)

Central issue price of rice under SWI/SWH is Rs. 565/- per quintal. i.e.at BPL rate. The

rice is being released to meet the requirement of all Hostels, Ashram Schools, and Residential

Junior Colleges of ST, SC and BC categories and other institutions under the control of social

welfare department. And also to homes, hostels for Physically Handicapped, Residential

Schools for deaf and blind for boys and Girls, Handicapped children, State Home, Service

Home, Children Home, Collegiate girls Hostels, Crech centers (to the children of Agriculture

labour women) Balwadies, Regional Training Centers, Women Welfare Branches, Mobile

Creches, Women and Child Welfare Centre and Vocational Training Centers, which are under

control of Women Development and Child Welfare Departments. Rice is supplied at

Rs. 400/- per Qtl, to the above institutions. The normal monthly allocation made by Government

of India was 5772.260 MTs for Social Welfare Institutions as against the state requirement

of 17474.992 MTs. of rice .

MID-DAY–MEAL SCHEME

Government of India allotted a quantity of 138232 MTs, of rice under the MGNREG

scheme at free of cost for primary and upper primary classes, to meet the requirements under

cooked meal programme for the year 2012-13. Rice is being released to DWCRA women and

Self-help groups and through Fair Price Shops as allotted by the district collectors. In respect

of Hyderabad and Visakhapatnam Metropolitan Cities, rice is being released to Nandi

Foundation, an NGO, directly, for supply of cooked meal to the schools. It has been decided

by the Government, to release the rice stocks from MLS point to school point to Schools

points avoiding F.P. shops point, to ensure proper quality and weighment. In respect of IX

and X classes the state Government meets the expenditure of cost and transport and handling

charges.

CONCLUSION

The Global Hunger Index reveals that nearly 50 percent of Worlds hungry live in India.

The PDS has helped to reduce poverty and it improves food security of the poor. The targeted

public distribution system aimed at providing essential commodities to the poor both in rural

and urban areas at concessional rates. However, very often PDS is being criticized for in

effectiveness and in efficiency in achieving its objectives, the government of Andhra Pradesh

has been reducing the burden of subsidies on one hand and on the other it has drastically

reduced the number of white ration cards during 2013-14. A new study based on NSSO data,

has estimated that 46.7 per cent or 25.9 million metric tonnes of the grain (rice and wheat



released through the PDS, did not reach the intended beneficiaries in 2011-12. The study

further reveals that Andhra Pradesh and Tamil Nadu are among the better performers with

11.1 per cent and 12.2 per cent leakages respectively. The Shanta Kumar Committee

recommendations are completely against the implementation of TPDS and Food Security Act.

It wants to reduce the coverage to 40 per cent of the population as against 67 per cent. The

TPDS is no doubt an instrument which reduces poverty and ensures the food security to the

millions of helpless poor.

REFERENCES

1. Planning commission : Himachal Pradesh development report, Government of India,2012, P.261

2. Declaration on the eradication of Hunger and malnutrition, adopted at Rome by the world food

conference in November 1994, held under the auspices of FAO, the United Nations.

3. M.S. Swaminathan: to the Hungry, god is bread, the Hindu, October1, 2011. P.7

4. Shivaji Sarkar : Hunger pangs of Anno dates’ the Hindu, 17 th February, 2015. P.7

5. Ghumaan, G.K and Dhiman, P.K: Role and effectiveness of Public distribution system in providing

food security in India, Indian Journal of Research, and Vol.3 issue. 5 June 2013. P.25

6. Indian Food Banking Network A food security foundation India initiative, www.india food banking.org/

hunger.

7. Ibid

8. Reetika Khera: Revival of the Public Distribution system: evidence and explanations. EPW, November,

5, 2011.

9. GOl : Tenth Five Year plan 2002-07, Planning Commission, New Delhi, 2001,P.365

10. The Hindu: Daily News paper 23-1-2015.

301

ARTICLE / 43

A COMPARATIVE STUDY OF THE PERFORMANCE

OF MGNREGA IN ANDHRA PRADESH AND

TELANGANA STATES

Putta Madhavi & G Sandhya Rani

INTRODUCTION

MGNREGA is a flagship programme of Govt. of India which forms the second strand

for development of rural areas, the first being the Bharat Nirman Programmes have been

important programme interventions in India and elsewhere in developing countries since

long. These programmes typically provide unskilled workers with short-term employment on

public works. They provide income transfers to poor households during periods when they

suffer on account of absence of opportunities of employment. In areas with high unemployment

rates and under employment, transfer benefits from workfare programmes can prevent poverty

from worsening, especially during lean periods. Durable assets that these programmes create

have the potential to generate second-round employment benefits as requisite infrastructure

is developed. MGNREGA is conceived as a holistic approach to make the growth more

inclusive.

Originally, the NREGA, National Rural Employment Guarantee Act Bill was notified

in 2005 and came into force in 2006 and further modified it as the Mahatma Gandhi National

Rural Employment Guarantee Act (MGNREGA) in 2008. The Mahatma Gandhi National

Rural Employment Guarantee Scheme is an employment scheme for providing 100 days of

unskilled work to all employment seekers above 18 years age and willing to do work.

MGNREGA

Important salient feature of the Act is to improve the quality of life of rural people who

are vulnerable to out-migration in search of daily wage employment by channelizing the wage

workforce towards developmental activities at the village level itself. The scheme was initially

in progress in the first phase districts during its cognitive stage has generated lot of enthusiasm

Assistant Professor, Dept. of Women’s Studies, Sri Padmavati Mahila Visvavidyalayam (Women’sUniversity),Tirupati, A.P.Professor, Dept. of Women’s Studies, Sri Padmavati Mahila Visvavidyalayam (Women’s University),Tirupati,A.P.


among social scientists, and NGOs and led them to initiate several surveys on their own. The

surveys as in the cases of any other scheme are centered on the end results such as targeting

all the needy beneficiaries, and implementation of the Act and the scheme is gigantic in

nature and in the process of implementation and achieving the desired output. There are many

issues which are straddling the implementing agencies right from District to Gram Panchayat.

PRESENT STUDY

The authors have made attempt to study the situation of Andhra Pradesh after bifurcation

into Andhra Pradesh and Telangana States on 2nd June 2014 with an emphasis on the MGNREG

Scheme. The details of households which reached 100 days limit in the State of Andhra

Pradesh and Telangana during the years 2014-15 and 2015-16 is listed in the Table 1 and also

represented in Figure 1. The data shows that there isa less number of households in reaching

complete 100 days in terms of percentage of households. However the number of HHs

completed 100 days of work is bit high in Andhra Pradesh compared to Telangana during

2014-2016. HHs completed 100 days of work in Telangana and Andhra Pradesh is 6.59% and

11.59% respectively in the year 2014-15, where as in the year 2015-16, HHs completed 100

days of work in Telangana and Andhra Pradesh is 16.29% and 16.34% respectively. Average

days of employment provided per household were less than 50% in both the states in 2014-

15 and was same around 55% in 2015-16.

Table – 1

Households reached 100 days Limit in Andhra Pradesh and Telangana

State Andhra Pradesh Telangana

Year 2014-15 2015-16 2014-15 2015-16

Total Households Worked 33,00,000 36,03,000 24,33,000 25,63,000

Average days of employment provided per Household 47.25 55.26 42.42 55.29

Total No of HHs completed 100 Days of Wage Employment 3,82,545 5,88,555 1,60,281 4,17,505

% of Households Reached 100 days limit 11.59 16.34 6.59 16.29

Source: MGNREGA Official Web site

Figure 1: Number of HHs completed 100 days vs Total number of HHs

303

EMPLOYMENT PROVIDED TO WOMEN AND SCS/STS:

The details of total women participated in the MGNREG scheme during 2014-15 and

2015-16 in Andhra Pradesh and Telangana are listed in the Table 2. The data presented

reveals that, majority participants were women workers (more than 57%) in both the states.

The reason could be more awareness about the scheme among the women, and inclination

and interest to improve their economic independence.

Table – 2

Women Persondays in Andhra Pradesh and Telangana


Year 2014-15 2015-16 2014-15 2015-16

Person days Generated [In Lakhs] 1559.04 1991.09 1032.06 1416.7

Women Person days out of Total (%)Person days of

employment provided 58.65 57.78 61.1 60.76

The total person days generated for the years 2014-15 and 2015-16 in the States of

Andhra Pradesh and Telangana and the SC/ST person days percentage data was given in the

Table 3. SC & ST person days percentage of total person days was high in Telangana as

compared to Andhra Pradesh during the period 2014-2016. SC & ST person days percentage

of total person days was more in Telangana as compared to Andhra Pradesh.

Table – 3

SC & ST Person Days in Andhra Pradesh and Telangana


Year 2014-15 2015-16 2014-15 2015-16

Person days Generated [In Lakhs] 1559.04 1991.09 1032.06 1416.7

SC person days % as of total person days 22.77 22.58 24.17 24.2

ST person days % as of total person days 11.92 12.33 18.18 17.05

EMPLOYMENT PROVIDED TO DIFFERENTLY ABLED PERSONS

Percentage of differently abled persons worked is just 1.35% in 2014-15 and 1.26% in

2015-16 in Andhra Pradesh and the situation is same but slightly higher in Telangana and the

same is represented in the Table 4.

Households wage earnings and details of districts, blocks, Gram Panchayats are were

listed in the Table 5 it is noticed that the percentage of Gram Panchayaths with zero expenditure

is more in Telangana (3.44%in 2014-15 and 2.89% in 2015-16) compared to Andhra Pradesh

(2.6%in 2014-15 and 1.22% in 2015-16).Average wage rate per day per person is increased

A Comparative Study of the Performance of MGNREGA • PUTTA MADHAVI & G SANDHYA RANI


by around Rs.13 from 2014-15 to 2015-16 in both the states and the wages are slightly higher

in Andhra Pradesh than Telangana.

Table – 4

Differently abled persons worked in Andhra Pradesh and Telangana


Year 2014-15 2015-16 2014-15 2015-16

Total Individuals Worked[In Lakhs] 55.59 60.56 43.5 45.7

Differently abled persons worked 75130 76488 61743 64089

Percentage 1.35 1.26 1.42 1.40

AN OVERVIEW OF EXPENDITURE AND WAGES

Table – 5

Details of Gram Panchayats and Wages in Andhra Pradesh and Telangana

Details\Name of the State Andhra Pradesh Telangana#

Total No. of Districts 13 9

Total No. of Blocks 661 438

Total No. of GPs 13,084 8,831

Number of GPs with NIL expenditure (2014-15) 340 (2.60%) 304 (3.44%)

Number of GPs with NIL expenditure (2015-16) 160 (1.22%) 255 (2.89%)

Average Wage rate per day per person(Rs.) (2014-15) 116.33 114.92

Average Wage rate per day per person(Rs.) (2015-16) 129.5 127.09

# Hyderabad District is not included

CONCLUSION

The meaning of the poverty is discussed based on the explanations and figures given

by the various organizations. The aim of the study is to find the actual status and impact of

MGNREGS in Andhra Pradesh and Telangana States mainly for the period (2014-2016) after

bifurcation of the combined Andhra Pradesh on 2 nd June 2014. The various findings and

suggestions based on the study are listed.

FINDINGS

The study revealed that, majority participants were women workers (more than 57%)

in both the states.

HHs completed 100 days of work in Telangana and Andhra Pradesh was 6.59% and

11.59% respectively in the year 2014-15.

305

HHs completed 100 days of work in Telangana and Andhra Pradesh was 16.29% and

16.34% respectively in the year 2015-16.

Average days of employment provided per household was less than 50% in both the

states in 2014-15 and is same around 55% in 2015-16.

SCs& STs percentage of employment provided to total person days was more in

Telangana as compared to Andhra Pradesh.

Percentage of differently abled persons worked was just around 1.3 % and 1.4 % in

Andhra Pradesh and Telangana.

Percentage of Gram Panchayaths with zero expenditure was more in Telangana

(3.44%in 2014-15 and 2.89% in 2015-16) compared to Andhra Pradesh (2.6% in

2014-15 and 1.22% in 2015-16).

Average wage rate per day per person has increased by around Rs.13 from 2014-15

to 2015-16 in both the states and the wages were slightly higher in Andhra Pradesh

than Telangana.

SUGGESTIONS

MGNREGS should be diversified into the activities which need technical skill and

ability in order to increase the average person days

Awareness among the rural poor to know about the scheme and to utilize the benefit

of the scheme.

Encouragement for the people who completes 100 days by allotting additional days

of work.

REFERENCES

1. Basu, Arnab K., 2011, Impact of Rural Employment Guarantee Schemes on Seasonal Labor Markets:

Optimum compensation and Workers’ Welfare, ntl Journal of Economic Inequality

2. http://planningcommission.nic.in/plans/planrel/fiveyr/9th/vol2/v2c2-1.htm

3. http://www.effective-states.org

4. http://www.unesco.org/new/en/social-and-human-sciences/themes/international-migration/glossary/

poverty/

5. http://www.worldbank.org/en/news/press-release/2015/10/04/world-bank-forecasts-global-poverty-to-

fall-below-10-for-first-time-major-hurdles-remain-in-goal-to-end-poverty-by-2030

6. Jha, Raghbendra, Sambit Bhattacharyya, RaghavGaiha and Shylashri Shankar, 2009, Capture of Anti-

Poverty Programs: An Analysis of the National Rural Employment Guarantee Program in India,

Journal of Asian Economics 20(4): 456-464.

7. Kalarani Rengasamy and Sasi Kumar B, 2011, State Level Performace of MGNREGA in India: A

Comparative Study, International Multidisciplinary Research Journal, 1(10):36-40.

A Comparative Study of the Performance of MGNREGA • PUTTA MADHAVI & G SANDHYA RANI


8. Khera, Reetika, (ed.), 2011, The Battle for Employment Guarantee, New Delhi: Oxford University

Press.

9. MGNREGA Official Web Site - http://www.nrega.nic.in

10. Shariff, Abusaleh, 2009, Assessment of Outreach and Benefits of National Rural Employment Guarantee

Scheme in India, Indian Journal of Labor Economics 52(2): 243-268.

11. Smelser, N. J. and Baltes, P. B. (eds.) 2001. International Encyclopaedia of the Social and Behavioural

Sciences. Elsevier. Oxford Science Ltd.

307

ARTICLE / 44

FOOD SECURITY–ROLE OF PDS IN

UNDIVIDED ANDHRA PRADESH

G. Venkateswarlu

In providing economic access to food, the PDS and employment generating schemes

play a crucial role. In this paper, we mainly focus on the role of PDS in achieving the food

security at household level. Before looking in to the distribution system we would like to see

at state level, the changing structure of food grain production and availability, in turn its

influence on food consumption at household level.

FOOD GRAIN PRODUCTION IN ANDHRA PRADESH

Andhra Pradesh was among the very few states in the country which heralded green

revolution, especially in respect of rice, during the phase of 1970’s. Productivity has increased

during this phase with introduction of High Yield Variety seeds and Technological innovations.

Decadal growth of Production and Yield have grown more than double, irrespective of a

slower growth in area under total food grains in general and rice in particular. Hence, for

understanding food grain production and availability during different point of time period. We

estimated compound annual growth rate of agriculture production, productivity, and area in

table-1.1.

Table-1.1: Growth Rates of Food Grains (Area, Production, Yield) of Andhra Pradesh per annum

Years Rice Total Coarse Cereals Total Pulses Total Food grains Non-food crops

A P Y A P Y A P Y A P Y A P Y

1960-61 to 1969-70 -0.30 0.4 0.75 -0.54 4.7 1.4 -0.16 -1.8 -1.6 -0.68 -2.28 -1.61 1.9 -0.6 -0.5

1970-71 to 1979-80 -0.16 3.11 3.2 -0.5 3.6 3.7 -0.03 -0.9 -0.8 0.8 2.44 4.38 2.5 -7.4 -0.2

1980-81 to 1989-90 1.74 3.9 2.1 -1.6 -1.2 2.8 1.0 4.2 3.2 -0.91 2.97 3.92 4.2 7.3 -0.76

1990-91 to 1999-2000 -0.6 1.0 1.1 -1.2 1.15 -1.6 0.08 1.5 1.4 -0.83 1.05 1.90 -8.6 5.8 1.5

2000-01 to 2009-10 -1.7 -1.0 1.1 -1.6 0.39 -3.8 -3.9 -3.6 4.9 -1.39 0.27 1.14 -8.8 -4.2 -1.0

2010-11 to 2013-14 -5.7 -5.6 0.63 -3.1 -3.0 -0.04 3.5 3.7 3.9 -2.38 -2.44 -0.5 -3.7 3.6 0.80

Source: Directorate of Economics and Statistics of Andhra Pradesh various reports

Note : 1) Non-food crops-cotton = Tobacco and Sugarcane. 2)A = Area, 3) P = Production and 4).Y = Yield

Research Assistant, School of Economics, University of Hyderabad, Hyderabad


The data presented in Table -1.1 reveals that growth rate of rice in terms of area,

production and yield has shown a mixed result from 1960-61 to 1980-81. Mid 1980s registered

a positive growth for area, production and yield for rice with 1.7 percent, 3.9 percent and 2.1

per cent respectively in those variables. Between 2010-11 and 2013-14 growth rates under

area and production registered negative growth rates; however growth rate under yield continued

to be positive growth. Growth rate of area under coarse cereals was declining continuously;

it declined from -0.54 in 1960-61 to -3.1% in 2013-14.

PRODUCTION INDEX

Production index helps in understanding food grain production and availability across

the districts and regions, higher index value represents better performance in terms of production

availability at each district and region. In present study, data on production is taken from

1994-96 to 2011-13 in Andhra Pradesh.

I = *100

Where,

Ip:

Index of production

Xij:

ith production in the jth district

Ximx:

ith production in the district with highest value

Ximn:

ithproduction in the district with lowest value

The result of the Production Index are presented in Table -1.2. From table (1.2), it can

be observed that, in Telangana region, three districts namely Karimnagar, Nizamabad, and

Adilabad has better performances over the period since 1994-96 to 2011-12. In coastal

Andhra, Vizayanagaram, West Godavari and Krishna had sustainable performance, while

Rayalaseema has low performance in terms of food production as compared to coastal Andhra

region and Telangana region.

Table – 1.2

Production Indices

Districts 1994-1996 1997-1999 2000-2002 2005-2007 2008-2010 2011-2113

Adilabad 4.54 12.33 23.58 21 24 23

Nizamabad 7.78 -0.88 2.51 34 34 24

Karimnagar 15.04 14.26 -3.65 30 36 30

Medak 6.58 9.32 24 27 34 15

Rangareddy 0.64 0.85 34.9 0.89 2. 0.82

Mahabubnagar 3.96 11.14 -10.1 34 11 12

Nalgonda 13.14 9.15 22.62 22 34 19

309

Districts 1994-1996 1997-1999 2000-2002 2005-2007 2008-2010 2011-2113

Warangal 7.17 21.15 2.64 42 22 17

Khammam 8.52 11.62 4.22 24 34 10

Srikakulam 7.76 16.50 49.51 80 23 6

Vizianagaram 3.49 4.85 36.70 15 53 49

Visakhapatnam 2.25 3.55 48.09 39 10 9

East Godavari 27.7 8.68 41.24 28 22 25

West Godavari 39.91 26.44 33.78 54 34 33

Krishna 27.84 42.02 9.56 20. 23 25

Guntur 23.51 29.17 16.42 33 23 30

Prakasham 7.70 21.22 31.18 9 34 11

SPSR.Nellore 11.83 9.61 25.54 44 18. 20

Kadapa 0.56 1.03 25.32 8. 11 10

Kurnool 6.0 2.73 7.26 10 35 13

Ananthapur -0.57 0.85 12.41 9 36 16

Chittoor 1.58 5.72 12.06 5 7 2.3

Source: Computed from Hand Book of Statistics. Directorate of Economics &Statistics A P

Parthasarthy (1984) study found that North coastal Andhra region is highly instability

than south coastal Andhra. In Telangana region has had a unique experience with high growth

rates of production and with low instability, while in Rayalaseema region still remains to be

instability.

Table – 1.3

Net Availability Indices

District 1979 – 1982 1998 - 2001 2010 – 2013

Srikakulam 29 36 38

Vizianagaram 29 37 41

Visakhapatnam 14 23 13

East Godavari 41 60 26

West Godavari 60 90 16

Krishna 49 81 22

Guntur 37 67 22

Prakasam 34 48 37

Nellore 45 56 17

Kurnool 34 34 36

Ananthapur 20 17 10

Cuddapah 24 22 9

Food Security • G. VENKATESWARLU


District 1979 – 1982 1998 - 2001 2010 – 2013

Chittoor 25 14 12

Ranga Reddy 10 8 20

Nizamabad 40 75 16

Medak 38 57 32

Mahaboobnagar 38 27 40

Nalgonda 44 63 21

Warangal 36 53 28

Khammam 34 53 15

Karimnagar 46 87 19

Adilabad 31 40 59

Source: For 1979-82 to 1998-2001 Net availability indices data is taken fromG.

NET AVAILABILITY INDICES

INPij = (Xij/ XiICMR) *100

INPij : Index of food grain availability of the jthdistrict for ith food item

Xij : Per capita availability of ith food grain item per day in the jth district

Xi ICMR: Per capita per day recommended intake of the ith food grain item

In order to understand net availability of food grains across the districts, the net availability

index is calculated. Table. (1.3), gives an idea on regional variation and disparities in terms

of production and net availability of food grains among various districts of Andhra Pradesh.

In Coastal Andhra, Net Availability of Food grains is higher in the district of West Godavari,

subsequently registers a higher food index across the districts of the state. In Telangana

Region, Karimnagar district registers higher food index, indicating higher net availability of

food grains. Amongst all regions, Rayalaseema region registers lower food indices with less

production.

ECONOMIC ACCESS TO FOOD

Food security is attained through adequate purchasing power of the consumer along

with physical access to the required food. Very often, poor sections of the society cannot

afford to obtain the available food due to higher market prices, in such context it becomes

imperative to establish various social protection programmes to ensure adequate access to

food. Economic access to food mainly depends upon the following drivers:

1. Employment

2. Real Wage growth rates

311

3. Per capita consumption expenditure and

4. Poverty

EMPLOYMENT

The sustained creation of employment goes a long way in effectively increasing access

and ensuring right to food. The increase in remunerative employment opportunities especially

for the poor enables them to obtain the purchasing power to increase their food consumption.

The overall growth in employment in the country is thus closely related to the ability to

improve access to food particularly for the poor in both rural and urban India and unemployment

leads to inadequate purchasing power to participate in the market transactions, and it would

further hinder the access to food.

REAL WAGE GROWTH RATES

Real wages effectively determines purchasing power of Individuals as well as households;

elaborately, higher the rate of growth in real wage would imply higher purchasing power.

The available data shows that Andhra region except in the district of East Godavari, all

other districts witnessed a decline in real wage growth rate during 2005-09 in comparison

with 2001-04 growth rates under male category, while there is a decline in real-wage growth

rate for females in all districts of Andhra region. In Rayalaseema region, except Kadapa

district there is deceleration in growth rates of real wages during 2005-09 in both male and

female categories. However, trends in Telangana are better in comparison to Rayalaseema and

Andhra regions. Amongst nine districts, five districts showed progress in growth rate of real

wage for female category and three districts shown progress under male category during

2005-09. Overall trend in real wage growth rates had improved in most of the districts by

2010-13. Such an increase in real wage growth rate is attributed to the introduction of

MGNREGA in rural areas. Expansion of farm income continues to be an effective strategy

for reducing poverty.

PER CAPITA CONSUMPTION EXPENDITURE

An attempt is made to establish the association between consumption expenditure and

food security. Table-1.5 presents changes in Food and Non-Food Expenditure in Rural and

Urban areas of Andhra Pradesh. Over years since 1993-94 to 2011-12, food baskets of

consumer in both urban and rural areas have changed, witnessing a decline in food expenditure

combined with an increase in non-food expenditure. Food expenditure in rural areas which

stood at 59.59 per cent in 1993-94, reduced to 51.4 per cent in 2011-12, while Non-Food

Expenditure increased from 40.4% in 1993-94 to 48.59% by 2011-12, similarly, urban areas

also witnessed a decline in food consumption and an increase in non-food consumption

expenditure, but with a higher magnitude. When compared with All-India MPCE, the magnitude

of change in consumption expenditure in both food and non-food consumption expenditure



is higher for All-India Estimates as compared with Andhra Pradesh estimates. Under Food

Consumption Basket, Cereals shown a drastic decline as compared to other items under food

basket, with a decline of consumption expenditure in rural areas from 24.53% in 1993- 94

to 9.76% by 2011-12. Hence, we observed that, in rural area, major share of food expenditure,

with in that cereals consumption has major share, but later on has also gradually declined,

due to diversified food habits. In urban area during the initial period, non-food consumption

was lower than food consumption, but later on it moved towards non-food consumption that

could be due to investment on education and health etc.

Table – 1.5

Monthly per Capita Consumer Expenditure (MPCE) (In Rupees)

AP 1993-94 2004-05 2009-10 2011-12

Rural Urban Rural Urban Rural Urban Rural Urban

Cereal 70.84(24.53) 73.16 (10.07) 113.60 (19.40) 124.52 (12.22) 168.36 (13.64) 215.32 (9.62) 171.98 (9.76) 204.04 (7.67)

Pulses 11.05(3.82) 13.91 (3.40) 19.25 (3.2) 22.76 (2.23) 43.87 (3.55) 57.69 (2.57) 51.88 (2.95) 59.06 (2.19)

Edible Oil 14.21 (4.92) 18.32 (4.48) 28.0 (4.78) 31.97 (3.13) 38.4 (3.11) 50.57 (2.25) 57.21 (3.26) 65.5 (2.43)

Meat/Egg 13.09 ( 4.53 ) 16.08 (3.93) 25.10 (4.28) 31.51 (3.09) 80.77 (6.54) 102.70 (4.58) 125.0 (8.66) 133.23 (4.96)

Milk Products 15.29 (5.29) 28.22(6.90) 32.34 (5.52) 59.42 (5.83) 66.76 (5.41) 114.34 (6.45) 98.91 (5.63) 145.65 (5.42)

Sugar 5.38 (1.86) 7.01 (1.71) 8.05 (1.37) 9.80 (0.96) 14.69 (1.19) 19.3 (0.86) 16.9 (0.96) 20.57 (0.76)

Total Food 172.05(59.59) 219.95 (53.83) 323.15 (55.18) 423.24 (41.55) 716.52 (58.07) 1002.30 (44.79) 901.58 (51.40) 1135.65 (42.29)

Total Non-Food 116.65(40.40) 188.65 (46.16) 262.40 (44.81) 595.31 (58.44) 517.24 (41.92) 1235.35 (55.20) 852.40 (48.59) 1549.43 (57.70)

Total Expenditure 288.70(100) 408.60 (100) 585.55 (100) 1018.55 (100) 1233.76 (100) 2237.65 (100) 1753.98 (100) 2685.09 (100)

Source: Various NSSO Report No .402, 508, 540 and 555.

POVERTY

Poverty is a state where a person is unable to maintain a minimum socially accepted

level of standard of living. As per the latest estimates of the Planning Commission, released

in March 2012, for the year 2009-10, the poverty ratios for rural and urban areas of Andhra

Pradesh was 22.8% and 17.7% respectively and combined it was 21.1%. The corresponding

figures for all India during the same period were 33.8%, 20.9% for rural and urban areas and

combined was 29.8%. Poverty levels in A.P. have been lower than the national average, and

its pace of reduction is faster than rate of reduction at all India level. Several factors have

contributed for such reduction of poverty over years. One of the reasons for such reduction

is attributed to effective functioning of Public Distribution System (PDS) ensuring access to

food resulting in attaining required calorie norm to be above poverty line.

According to Dev. (2007) poverty declined during pre-post reform period is due to

effective distribution system function, while that of growth rate of staple food grain prices

remain low and inflation is also low. These are the things attributed to reduction of poverty

in Andhra Pradesh. On one hand some policy measures to improve agriculture growth, macro

policy on industrial and rural non-farm sectors in the post period had adverse impact on

313

poverty reduction. On the other hand, it is believed that, it is due to social welfare programmes,

such as focus on providing food and nutritional security, PDS and ICDS which helped in

poverty reduction.

Table – 1.6

Average per Capita Intake of Calories, Proteins and Fat per Day in Andhra Pradesh

Years Calorie (Kcal/day) Protein (grams/day) Fat (grams/day)

Rural Urban Rural Urban Rural Urban

1972 – 73 2103 2143 53.0 51.0 21.0 31.0

1983 2204 2009 56.0 50.0 24.0 32.0

1993 – 94 2052 1992 50.8 49.6 27.2 34.9

1999 – 2000 2021 2052 49.4 50.8 29.5 41.5

2004-05 1995 2000 49.8 50.9 33.5 43.2

2009-2010 2047 1975 50.7 50.8 37.9 43.2

2011-12 2186 2150 53.6 54.2 43.4 49.9

Source: NSS Report No. 540 & 560: Nutritional Intake in India, 2011-12.

Table – 1.7

Poverty Ratios in Andhra Pradesh and for All India

Area Andhra Pradesh Poverty Percentage ChangePer Annum

Head count ratio (HCR)

1993-1994 2004-2005 2009-2010 1993-2004 2004-2010

Rural 48.1 32.3 22.8 -1.44 -1.9

Urban 35.2 23.4 17.7 -1.07 -1.14

All 44.6 29.6 21.1 -1.34 -1.76

All India

Rural 50.1 42 33.8 -0.75 -1.6

Urban 31.8 25.5 20.9 -0.55 -0.96

All 45.3 37.2 29.8 -0.74 -1.48

Source: Approach to the 12th Five Year Plan Andhra Pradesh p 28: Planning Commission

PUBLIC DISTRIBUTION SYSTEM AND FOOD SECURITY IN ANDHRA PRADESH:

It is now well recognized fact that the availability of food grains is not a sufficient

condition to ensure food security to the poor but the necessary condition is that the poor

should have sufficient means to purchase food. Hence, PDS subsidized food grain supply to

poor, is very important in providing food security. In this context, we want to see how far

functioning of PDS is effective, in providing food security to poor household.



For the sustenance of poor sections of households, who are excluded from remunerative

occupations, state intervention in enabling food and nutrition security becomes necessary.

Hence social security measures such as PDS plays an important role in providing access to

food at household level. Through PDS, food grains such as rice and wheat are supplied at

a subsidized price; on an average each household will be receiving 25 kgs of rice. Present

section analyses access to PDS in the state of Andhra Pradesh, which is one of the main

intervention of state to ensure food security with subsidized lending to poor sections of the

society.

The center allocates food grains to states on the basis of the identified BPL population,

the availability of food grains stocks, and the quantity of food grains lifted by states for

distribution under TPDS. Table (1.9), presents allotment and off-take of rice, a major staple

food in Andhra Pradesh during several years. It can be observed that, over years, allotment

of Rice to Andhra Pradesh has been fluctuating.

Table-1.8

Allotment and Off-take of Rice in Andhra Pradesh (in ‘000 tones)

Years Allotment Off take % Off take

1998 - 1999 128 106 83.3

1999 - 2000 137 112 81.5

2000 - 2001 161 79 48.8

2001 - 2002 171 80 47.1

2002 - 2003 359 105 29.1

2003 - 2004 343 133 38.7

2004 - 2005 345 165 47.8

2005 - 2006 400 191 47.7

2006 - 2007 432 211 48.8

2007 - 2008 273 225 82.2

2008 - 2009 241 221 91.5

2009 - 2010 295 210 71.2

2010 - 2011 315 287 91.3

2011 - 2012 315 260 82.7

2012 - 2013 295 226 76.7

2013 - 2014 295 210 71.2

Source: Andhrastat.com

From Table (1.8) it can be observed that, despite availability of rice through allotment

by Centre, state procured a less proportion, which could be witnessed through inverse

relationship between increase in allotment of rice by center and declining trends in percentage

off-take. Such trend may be due to less storage capacity of state, self-sustainable stocks with

315

bumper harvest, higher transportation and storage costs, etc. However, access to PDS could

be substantiated better through consumption of rice accessed through PDS and income gain

analysis.

From table (1.9), it can be observed that, in Andhra Pradesh, the share of consumption

of rice from PDS has increased from 10.03 kg in 2004-05 to 12.57 kg by 2011-12, with a

declining trend of consumption from Open Market Purchase from 28.7 kg to 20.9 kg.

Subsequently, there is a slight increase in consumption from rice produced by own from 4.39

kg in 2004-05 to 4.74 kg by 2011-12. As a whole, overall trend in consumption of rice

witnessed a decline from 43.12 kg in 2004-05 to 38.28 kg by 2011-12. All-India estimates

for the same period shows that there is a progress in access to PDS got increased from 4.1

kg in 2004-05 to 7.67 kg by 2011-12, along with a decline in consumption through open

market purchase from 17.3 kg in 2004-05 to 13.11 kg by 2011-12 and a decline in consumption

of self- produced rice from 9.74 kg in 2004-05 to 6.69 kg by 2011-12.

Table – 1.9

Average Household Consumption of Rice in Andhra Pradesh (in Kg)

NSSO PDS MARKET HOME TOTAL

2004 - 2009 - 2011 - 2004 - 2009 - 2011 - 2004 - 2009 - 2011 - 2004 - 2009 - 2011 -

2005 2010 2012 2005 2010 2012 2005 2010 2012 2005 2010 2012

AP 10.03 12.82 12.57 28.7 23.52 20.97 4.39 3.3 4.74 43.12 39.64 38.28

India 4.1 6.64 7.67 17.3 14.61 13.11 9.74 6.8 6.69 31.13 28.06 27.47

Source: Andaleeb Rahman, 2014: Computed from NSSO 2004-05, 2009-10 and 2011-12

Access to PDS and consumption of rice through PDS in Andhra Pradesh is significantly

higher than the share of all-India consumption of rice through PDS. Simultaneously, Andhra

Pradesh had a positive outcome in realizing the mission of PDS, with a decline in leakages

leading to an increased access to consumption of food grains through PDS. Such a trend, in

comparative assessment with All-India scenario reflects a contradiction to Andhra Pradesh in

terms of leakages of food grains, which shows that leakages of Food Grains at All-India level

have drastically increased, as opposed to observed decline in case of A.P.

From table (1.10), it can be observed that during 1999-2000 to 2011-12, there is a

decline in leakages in food grains. Leakages in Rice, which is the major staple food of

Andhra Pradesh, declined from 15.2 kgs to 11.65 kgs. Leakages in PDS can be curtailed with

higher subsidized lending through fair price shops. Higher subsidized lending through Fair

Price Shops would indicate lower procurement price for food products as compared with

prices in open market.

Empirical evidence shows that leakages can range from 15% to 28% of the subsidy

while 16 % to 26.5 % of the subsidy is eaten up by the inefficiency of the government

procurement and distribution system.



Table – 1.10

Leakages from PDS 1999-2012 (in Kgs)

1999 - 2000 2001 – 2002 2004 - 2005 2006 - 2007

Rice Wheat Food Rice Wheat Food Rice Wheat Food Rice Wheat Food

Grains Grains Grains Grains

A.P 15.2 14.4 15.2 12.3 -210.8 11.2 22.3 93 23.2 16.1 66.9 17

(-24.6) (87.1) (25.4)

India 9.9 48.6 23.9 18.2 66.8 39 41.3 70.3 54 39.6 61.9 46.7

(40.5) (73.1) (54.8)

2007 - 2008 2009 – 2010 2011 - 2012

Rice Wheat Foodgrains Rice Wheat Foodgrain Rice Wheat Foodgrain

A.P 19.2 50.3 19.6 15.9 25.9 16 11.65 53.64 11.13

(16.8) (53.2) (-16.8)

India 37.2 57.7 43.9 45.9 59.7 41.2 36.15 62.88 46.72

(35.9) (42.9) (-42.8)

Source : Ashok Gulati, 2015.

Note : Values in the parenthesis are as calculated by Himanshu and Sen (2011).

The core issue is that, hence allocation of PDS staple food grains did not reach the

actual beneficiary, recently one of the study found that about 40 percent of the food grains

could not reach the actual beneficiaries, (IEO, 2014). Khera (2014) examined that there has

been a positive improvement in terms of leakage of PDS, from 2006-07 to 2007-08 declined

about to 46.7 per cent as compared to 43.9 per cent. And it is also suggested to have uniform

entitlement and common price for PDS items. This could attribute to low leakage and effective

functioning of PDS of the country.

Income gain to the consumer is the difference between the value of the quantity of

goods purchased in PDS when evaluated at market prices and the actual value of PDS

purchases. Income gain includes gains from all purchases of rice, wheat, sugar and kerosene

made in fair price shops. Implicit prices are used to derive income gain.

IG = (Pm - P

f) Q

f

Where IG is income gain,

Pm and P

f are open market prices and price in the PDS of the commodity and

Qf is the quantity purchased from fair price shop.

Income gain through PDS in Andhra Pradesh has been observed to rise over time, since

1986-87 to 2009-10, such increase is witnessed in all income groups. Table-1.12, presents

income gain through PDS in Andhra Pradesh. Above table is classified into poor, non-poor

and all class income grain from PDS, based on the open market price food grains and PDS

price, based on the MPCE. Income gain analysis by Sridevi, et al (2014), found that there is

an enhanced income gain from PDS in both rural and urban area for poor and non-poor

317

household based on the MPCE in Andhra Pradesh, amongst which non-poor households have

larger income gain than poor household. However the increase in income gain is higher for

poor sections, than non-poor households. On the other hand, income gain from PDS in urban

area is higher in poor households than in non-poor households, which indicates higher

dependency of poorer sections on PDS. Hence, more income gain influences by high subsidies

price of food grains through PDS and open market price of food grains can be affordable by

household. Further there is a positive relationship between subsidies of price entitlement of

food grains and income grain from PDS. The lower the ratio of PDS to market price of rice,

the greater was the real income gain (either because the quantity bought was higher or the

same quantity bought translated into higher income gain because of a higher price subsidy)

is negative, implying that the greater the rice price subsidy, the lower was the real income

gain. The extent of price subsidy, in most cases, results in larger real income transfers (Jha,

et al 2011).

Table – 1.11

Income Gain through PDS in Andhra Pradesh (in Rupees)

Income group Rural Urban

1986-87 1999-2000 2009-10 1986-87 1999-2000 2009-10

Poor 5.67 17.28 20.23 7.8 16.0 22.8

Non poor 6.13 17.53 20.24 6.0 14.34 20.3

All classes 6.02 17.1 20.01 6.8 15.2 18.1

Source: Sridevi, et al, 2014

CONCLUSION

Andhra Pradesh State is identified as the “Bejeweled Rice Bowl of India”. In Andhra

Pradesh, Agriculture plays a crucial role in its economy, with the largest segment of the

population being dependent on agricultural sector for employment. Rapid and sustainable

growth in agriculture has been identified not only as a key driver for economic development

but also for achieving self-sufficiency and ensuring food security to the people. Growth rate

of area under coarse cereals was declining continuously from -0.54 in 1960-61 to -3.1% in

2013-14. Coming to the present changes in Food and Non-Food Expenditure in Rural and

Urban areas of Andhra Pradesh, since 1993-94 to 2011-12, food baskets of consumer in both

urban and rural areas have changed, witnessing a decline in food expenditure combined with

an increase in non-food expenditure. Food expenditure in rural areas which stood at 59.59

per cent in 1993-94, reduced to 51.4 per cent in 2011-12, while Non-Food Expenditure

increased from 40.4% in 1993-94 to 48.59% by 2011-12, similarly, urban areas also witnessed

a decline in food consumption and an increase in non-food consumption expenditure, but

with a higher magnitude. There is an enhanced income gain from PDS in both rural and urban



area for poor and non-poor household based on the MPCE in Andhra Pradesh, amongst

which non-poor households have larger income gain than poor household. There is shift from

food crops to non-food crops. PDS in Andhra Pradesh played an important role in providing

the access to food and in reducing the poverty.

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4662.



ARTICLE / 45

IMPACT OF MGNREGS ON UTILISATION OF

LABOUR FORCE IN ANDHRA PRADESH –

WITH SPECIAL REFERENCE TO

ANANTAPUR DISTRICT

Dhakshayani M. Dongre & Dhanjaya K.B.

ABSTRACT

The present paper is an empirical study on the impact of MGNREG scheme in Anantapur

district of Andhra Pradesh. Primary data was collected by a personal interview from 50

marginal, small and larger formers randomly selected in 5 mandals of Anantapur District viz.

Dharmavaram, Penugonda, Kalyanadurga, Gooty and Guntakal. It was observed that, majority

of the sample beneficiaries were literates having the ownership of land holdings about 2.5

acres to 5 acres. The author observed that, the sample beneficiaries could not get fully

employed in MGNREG works in the study area. And majority of them reported that they

could get less than 30 days of employment and only 20 percent of them reported that they

could get 100days of employment. The author employed chi-square test to assess the level

of significance and the results reveal that the sample beneficiaries could not get fully employed

and they could get only 30 days of employment. It was also mentioned that the hypothesis–

MGNREGS was not utilized by the sample beneficiaries in the study area was accepted.

Since the calculated value was 0.111, which was less than the table value of 3.84 at 5% level

of significance. The author calculated the MGNREGS has not utilized by the workers in the

study area due to low level of awareness about the scheme. It was also identified the job cards

in the study area were not provided properly and hypothesis was also accepted as the results

of chi-square test were found significant at 5% level.

The author suggested that the wage rates under the scheme should be made on par with

wage rates prevailing in the market and campaigns should be organized to propagate the

usefulness of the scheme, as even the official of Grama Panchayats were also found ignorant

of the benefits of the scheme.

Keywords: MGNREGS, Employment Generation, Hypothesis, Chi-square Test results.

Assistant Professor in Economics, Sir. M.V.Govt. Arts & Commerce College, Bhadravathi, ShivamoggaDist. Karnataka.Associate Professor, DOS in Economics, Sahyadri Arts & Commerce College, Shivamogga Dist. KarnatakaState.

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