The Economic Survey on Telangana and AP

My analysis:

https://www.telugu360.com/what-the-survey-tells-about-ap-and-telangana/

AP crosses Rs.25000 crores Income Tax collections, so what?

Recently, the AP Income Tax Department (AP Circle) has celebrated a milestone in Income Taxes collected from the state of Andhra Pradesh. Rs.25000 crores is the total sum of income tax collections which include, inter alia, everything from corporate income taxes, individual taxes, companies paying Minimum Alternative Tax, Dividend Income, Capital Gains, Income from Business/Profession as well as a good chunk of Salary and Pension Incomes. From the viewpoint of various sources of income tax, the department may not have fully deciphered the potential.
But lets understand the reasons for this elation before we flesh out details of whether we need to pat ourselves or feel there's room for higher mobilisations: AP has become the 3rd state after Maharashthra and Tamil Nadu to cross Rs.25000 crores. clocking a 24.8 per cent growth against a national average of 23 per cent in tax collections over the previous year. While the numbers for Maharasthtra and Tamil Nadu are not known,  Rs.25000 crores is impressive considering that the total Income Tax Collections for the previous year as per the latest Economic Survey 2011-12 is pegged at Rs.5,25,000 crores. From that viewpoint, that is almost 4.76 per cent of the national collection. Sounds impressive but look closer, you will find the segments of collection may leave a lot to be desired - atleast for the IT officials from a state which was growing at above 9 per cent during the golden years of 1995-2005 but is now slipping below. We have already seen the latest India Today's survey of the arrogant South underperforming in Economic Growth Rates compared to the diligent North catching up. But thats another point which can be debated later.
Of the total Rs.525000 crores., more than 68.5% is from corporate income tax. Only Rs.165000 odd crores is the contribution from Individual Income Taxes.  Hyderabad, despite having over 700  listed companies out of the 8500 odd stocks on NSE/BSE doesn't have a noteable presence that can pull the weight on the Indices like Sensex/Nifty (only one company or so in the bellweather indices). Except one or two companies, there is hardly a presence that can make the tax tally anywhere close to the tally of companies based in Mumbai Circle or Chennai Circle or even Kolkata or Bengaluru. We are not even talking about the circles in National Capital Region. Point is, even if you add up all the taxes paid by the listed companies in AP whether as Advance/Income Tax, it will not be close to the tax paid by a company like, say, ITC. Also, it is likely that most of the top corporates in listed and unlisted space are headquartered in Mumbai - which is where, taxes  eventually get paid afterall. AP is not leading the country in other parameters which can make it get counted for its past glories. We score a diminishing picture of our past self in a range of parameters like Gross Capital Formation, Per Capital Income,  Literacy Rate, School Dropout rates  (which determine the employability rates), etc.
To make matters worse, most of the leading companies of national fame except Pharmaceutical industry are either outside AP or re-locating their hubs to other national and international locations. You cant win the Income Tax sweepstakes with just a huge base of employees.
There are other quallitative factors which will determine, inter alia, whether the cake of Income Tax collections is going to go up largely in the coming years. You can guage this by asking some simple questions: Are we creating the right Investment climate for New Entrepreneurs to start industry in AP? Are most of the state Industrialists increasing their footprint in the state of AP or are they showing inclination to invest outside AP and maybe outside India itself? Is there a concentration of just one city instead of several top cities in AP and also simultaneous and harmonious development of tier-2 towns? (You don't have to read Sri Krishna Report to answer this question - we know how many cities are there to count as having arrived in AP besides Hyderabad).Is there a good skill migration happening in the state for more and more people escaping the poverty trap and moving into the semi-skilled and skilled and urban modes of employment or is there a disturbing tendency of farmers staying put in farming activities? (which means the  base will never go up and this may be because of free and guaranteed entitlements from the state government keeping farmers anchored to agriculture-related activities). Is the State attracting new talent in Industry and Service sectors? How is the FDI related Equity Inflows into the state? Are they showing an increasing trend or a decreasing trend? For example, between 2008-2011, AP received a mere five percent of the total inflows in terms of FDI in US Dollars compared with 19 per cent for Delhi and NCR Region and 35 per cent for Maharashtra region. Even states like Gujarat and Karnataka have received a tad more FDI commitments compared with AP.
What is the whole point of this excursion in statistics? Do not get misled by sweeping statements or tall claims of IT collections. They do not mean anything or signify a quantum jump in qualitative improvements in overall health/infrastructure/employment/investment/Economic Growth parameters of AP. AP Income Tax circle must be commended for driving the figures but they will be better off assessing  the segments of income tax in detailto guage if there ar e any outlandish collections or seasonal benefits or sheer luck in getting to a figure that still doesn't appear  too flattering. It could be mostly comprising of a few companies here and there, or a a handful of politicians getting the urge to come clean on their assets and liabilities, or  on the back of lagged investment cycle of corporates who are slowly re-locating/reducing footprint to  elsewhere- like Microsoft, Satyam Mahindra, Infosys. One has to also see whether a lot of money is moving out of the country into tax havens or extractive  industries outside India. If taxes are as certain as death, how can the tax man be celebratory at a mere milestone? He or She has miles to go before we sleep?                                                                                                                 

Makara Sankranti and its Significance in India

Happy Makara Sankranti to all my Telugu friends, Happy Pongal to my Tamil friends. May you all have the best of the harvest in the coming year - of meeting your personal and family goals, and successes and joys. Even though all in my family get our status and livelihood from service economy activities - Sankranti is one festival we treasure coming together. There is something of this agricultura...l festival thats pure joy and bliss to us - something thats closer to our family roots and rich heritage and culture. Love the Rangoli, the kites, the sonorous sounds of Haridasu, the salutation to the only God who goes "live" - Sun God - for a bountiful year of crops, the assortment of dishes for Sankranti, the sweet dishes, the Bommala Koluvu, the Kanuma and the Bhogi festivals, the usage of cowdung with both hands as an anti-pollutant, the reverberations on top of the terraces with mike boxes and latest songs amidst "Kaate" and "other sirens", the new clothes, the exhibition or fairs and site seeing with the biggest gang of cousins and elders and brothers-in-law, the new movies, the works... Except for the last two generations, my family has always been agrarian in its pursuit of economic activities - but Sankranti is an annual reminder of where we come from and where we finally belong to. We may be a remittance economy and a tertiary superpower, but Sankranti is a pure lifestyle-charging festival thats a package of many worlds in three days. No wonder, Andhra Pradesh which comes alphabetically first in every listing - never mind the boos for the time being- sees a bird-migration of sorts where folks everywhere go back to their villages for 3 days. In Hyderabad alone, it is rare to see a "bird migration" of almost a crore. I hope and pray nothing in the world can take away the pleasures of celebrating this unique lifestyle festival with a God that we see everyday - Sun. And to top it all with the movies. The Sun transits every month into a new Zodiac sign but its transit into the Northern hemisphere is always an auspicious beginning and a special moment in a year - a sign of things waiting to get into momentum mode, to get serious, to wake up and smell the coffee. I hope the same momentum is gathered and seen by everybody who believes in this festival and even by those who do not believe in this festival.

Congress-I and Customer Service

The concept of customer service (moments of truth) has never existed for Congress-I and its lieutenants. Look at the way they are treating their biggest bastion in South - AP and India's second Presidential Capital Hyderabad. Even with 40 plus MPs - we have no minister of reckoning who will award projects here or retain investments. Investments are flowing out of the city, commercial space i...s g...oing abegging, some 30,000 units are threatening closure, companies like ICICI Bank and Infosys have reduced their footprint here to other places (which was not the original plan) like Pune, Landmark Bookshop closed its Warehouse in Hyderabad, many prominent groups have shifted out of Hyderabad, students are not coming to study in Hyd anymore especially Inter/Degree/PG level students which is the backbone of student population, MICE events have taken the severest knock last few years, IT Parks are shifting their R&D to other centres in India and abroad. Congress-I never treated the Hyd city or the state of AP with the respect and support - issues pile up and burial is the solution. This is nothing but a heist comparable in scale to what the British plundered in pre-independence era. The state is ignored in getting Railways footprint, projects, industrial corridors, everything and they manage to keepo the state folks perenially in illiteracy and disempowerment with doles for the poor. Today, the poor of AP are going out of the state for work; a few years back states like Bihar saw outlflow of people because of de-growth in Bihar - now Bihari workers in AP are moving back to Bihar because there are better prospects there. Does that mean we are becoming worse than Bihar?In the triangular contest happening between TDP, Jagan and Telangana demands - the Cong-I has precipitated CBI enquiries which are going nowhere but threatening to cast a shadow on every businessman in the city. I just hope that the next election will teach a lesson on customer service to Congress-I by decimating their base built on crooked plans, divisive politics and devious policies based on faultlines developed by them alone. Who will cry for you, Andhra Pradesh?