Telangana has emerged as a shining example of fiscal strength, ranking first in the country with an impressive Own Tax Revenue (OTR) contribution of 88%, as highlighted in the latest Economic Survey. This southern state has consistently demonstrated robust economic policies, strategic governance, and effective fiscal management, which have been pivotal in achieving this milestone. Let’s explore the key factors contributing to Telangana’s success and its implications for economic development.
Telangana’s Dominance in Own Tax Revenue
Telangana’s remarkable achievement in OTR is a testament to its efficient tax collection mechanisms and dynamic policy framework. The state’s economic strategy focuses on enhancing its internal revenue streams rather than relying heavily on central transfers. By streamlining tax administration, digitizing processes, and encouraging compliance, Telangana has established itself as a model for fiscal discipline.
This milestone is also indicative of the state’s thriving economic sectors, including IT, real estate, agriculture, and industrial development, all of which significantly contribute to tax revenues. With Hyderabad as its economic hub, the state continues to attract investments that fuel its revenue growth.
Services Sector: A Key Driver of Growth
Telangana ranks among the top states where over one-third of the Gross State Value Added (GSVA) originates from the services sector. The state excels in key areas such as real estate, ownership of dwellings, and professional services, which are critical components of its GSVA. Cities like Hyderabad have become epicenters of IT and fintech industries, further boosting the state’s economic footprint.
Real Estate and Urbanization
Hyderabad’s real estate market is a significant contributor to Telangana’s GSVA. The city’s strategic location, infrastructural development, and business-friendly policies have made it a preferred destination for corporate offices and residential investments. This surge in urbanization has also led to a substantial increase in ownership of dwellings and professional services, creating a ripple effect across the economy.
IT and Professional Services
Hyderabad, often referred to as India’s IT capital after Bengaluru, hosts several multinational corporations and IT giants. The robust IT ecosystem generates employment and contributes significantly to professional services, adding to the state’s revenue base. Initiatives like the Telangana Academy for Skill and Knowledge (TASK) ensure a steady supply of skilled professionals to meet industry demands.
Appreciation for Telangana’s MSME Policy and WE Hub
Telangana’s progressive policies for micro, small, and medium enterprises (MSMEs) have garnered nationwide appreciation. The state’s MSME Policy promotes entrepreneurship by simplifying regulations, offering subsidies, and providing financial support to emerging businesses. By leveraging the Open Network for Digital Commerce (ONDC) and the Government e-Marketplace (GeM) portal, Telangana has empowered MSMEs to access new markets and scale operations.
WE Hub: Empowering Women Entrepreneurs
The Women Entrepreneurs Hub (WE Hub) in Telangana stands out as India’s first state-led incubator for women entrepreneurs. Launched to foster women’s entrepreneurship, WE Hub provides technical, financial, and policy support to startups. With initiatives like skill development programs, access to global markets, and financial assistance, WE Hub has incubated over 6,376 startups and SMEs, raising ₹177 crore in funding. This initiative underscores Telangana’s commitment to inclusive economic growth and gender empowerment.
Irrigation Success: Following Punjab and Haryana
Telangana’s focus on agricultural development is evident in its strides toward improving irrigation coverage. Ranking just behind Punjab and Haryana, the state has significantly increased its irrigation intensity, achieving 86% coverage of gross cropped area (GCA). This marks a substantial rise from 49.3% in FY16 to 55% in FY21.
Mission Kakatiya and Other Initiatives
Programs like Mission Kakatiya have been instrumental in rejuvenating irrigation tanks, restoring water bodies, and improving groundwater levels. Additionally, the Kaleshwaram Lift Irrigation Project (KLIP) is considered a game-changer, providing water for irrigation and drinking purposes across the state. These initiatives have transformed Telangana into an agricultural powerhouse.
Urban Geospatial Databases: A Technological Edge
Telangana is leveraging technology to enhance urban infrastructure and planning. Collaborating with ISRO, the state has developed urban geospatial databases under the AMRUT Cities program. These 2D and 3D spatial datasets assist in monitoring urban development, optimizing resources, and ensuring sustainable growth.
The use of Web GIS portals has further streamlined the management of electrical infrastructure and judicial infrastructure, demonstrating Telangana’s commitment to digital innovation.
The Road Ahead for Telangana
Telangana’s achievements in OTR, services GSVA, irrigation, and entrepreneurship underscore its position as a progressive and growth-oriented state. The government’s focus on fostering a business-friendly environment, empowering women entrepreneurs, and leveraging technology for development continues to set new benchmarks for other states.
As Telangana marches ahead, its visionary leadership and strategic initiatives are expected to propel the state to greater economic heights. By balancing industrial growth with agricultural and infrastructural development, Telangana is paving the way for sustainable and inclusive prosperity.