Andhra Pradesh: Who is poised for lift off?

Part 2

In my previous post, I have analysed the geography, history, electoral history and political leaders of Andhra Pradesh .  Let us now look at the demographics of the state.

Demographics

Andhra Pradesh is predominantly Hindu as chart below shows.¹

A caste-based breakdown of the Hindu population reveals the following:

Scheduled Tribes make up around 5.3% of the population². Almost all ST seats are in Uttarandhra, where STs are predominant. The Konda Dhoras, Kondis, Gadaba, Savara, Jatapu, and Bagata tribes dominate numerically here.  In other parts of Andhra Pradesh, the ST population is dispersed and different in composition. To explain, the Kondareddi and Koya castes predominate in former East and West Godavari districts, while coastal Andhra and Rayalaseema have Koya, Lambada, Yerukula, and Yennadi as main ST castes.

Scheduled Castes make up 17.2% of the population³. Malas and Madigas dominate, and account for almost 90% of the SC population. Dom and Relli are other significant SC castes in Uttarandhra.

Backward castes constitute around 35% of the state’s population. Yadav/Kuruba are estimated to make around 6-7% of the state's population. Apart from Yadavs, there are numerous backward castes but they are not dominant either regionally or numerically to influence electoral outcomes. 

General castes constitute almost a third of the Hindu population. The dominant castes within this category are the Kapus (~10-15% of total population), Kammas and Reddys (each about 8% of state population).  Most Chief ministers of Andhra Pradesh have been from either the Reddy or Kamma community till date.  The rise of JanaSena is primarily driven by a desire to consolidate the Kapu vote. Traditionally, Kammas have supported the TDP (NTR was a Kamma). Reddys are believed to be historically supportive of the INC.  The alliance between the JanaSena and the TDP is therefore driven by the desire to leverage the votes of about 20% of the population.

Within the Kapu caste umbrella, several sub-castes like Kapu Naidu, Telaga, Balija Naidu, Munnuru Kapu and Turupu Kapu are seen.  Turupu Kapu, Munnuru Kapu are classified as OBC while others come under general category.

Religious minorities (mainly Muslims and Christians) make up 9% of the state’s population. While the Muslim population is concentrated in urban pockets of coastal Andhra and in the Rayalseema, the Christian population is found in semi-urban and urban pockets of coastal Andhra.  The minorities have historically been supporters of the INC and later the YSRCP.

The accuracy of minority population data in official statistics is questionable, especially since it seems to point to Christian population decreasing despite contrarian evidence. The linked article offers an analytical perspective on real population of Christians especially in coastal Andhra

Having understood the demographics, let us now turn our attention to the state’s public finances.

Public Finances

The following aspects of the state finances are politically significant:

Persistent revenue deficit:

Andhra Pradesh has had a history of revenue deficits. In the last 2 years, revenue expenditure has risen sharply to almost 115% of revenue receipts. This implies that the state is either forced to divert funds (either borrowings or capital receipts) to fund its revenue expenditure.  Over the last 5 years, I observe that capital expenditure has been only at around 50% of budgeted levels.  At an overall level, total expenditure has been about 15-20% above total receipts which implies that the overall debt level is steadily increasing.

Large debt burden

The state is among India's top 10 most indebted with a debt to GDP ratio of around 33%. When debt of state PSU and cost of restructuring state discom are included, the overall debt stands at around 46% of state GDP.  This necessitates revenue diversification and strong tax revenue growth, which has not been forthcoming. To exacerbate matters, the state also reverted to the Old Pension scheme in 2019 which is expected to cost around 2% of state GDP by 2031.

Agricultural dominance

Agriculture's share of the state's economy has grown from 31% a decade ago to 36% now. Agricultural growth has desirable impact on employment/ rural income, however it does not contribute much to state finances.   

I already mentioned in my previous post that almost two-thirds of the population is dependent on agriculture. However, to fund its deficits on both revenue and fiscal accounts, the state needs to augment revenue. Therefore, agricultural improvement and increasing revenue streams dominate political discourse as we will see next.

Salient Election Issues

Special category status

Both major parties have promised that they will persuade the centre to declare AP as a special category status state (see box below). However, this looks like an emotive rather than substantive issue since the Union Government has already declared that the era of special category status state is over. However, this will still be used by each party to accuse the other of colluding with the centre in denying special status for AP.

Special Category status was a term coined by the Fifth finance commission in 1969 to cover states that were hilly, had strategic borders or were economically backward. Such states enjoy tax concessions and also get 90% funding for central government schemes (against 60-75% for other states)

Polavaram Project

The Polavaram Project is a critical project for expansion of irrigation and flood control  in AP. The project has been beset by multiple hurdles, including cost escalation, environmental clearances, inter-state disputes etc.  The lack of clear progress on this is likely to be used by the TDP to corner the state government, which in turn is likely to blame the centre.

The Polavaram project is a multi-stage irrigation project on the Godavari. It is located about 40 km upstream of the historic Sir Arthur Cotton barrage. This has been accorded national project status by GoI. (implying 90% of funds come from centre). It entails diversion of water from the Godavari basin to the Krishna basin.

Welfarism

The YSRCP is likely to bank heavily on its numerous welfare schemes to retain power. Specifically, it is likely to highlights improvements in education (Jagananna Amma Vodi scheme, which provides Rs. 15,000 per annum educational support from class 1 to class XII) and healthcare (YSR Arogyasri scheme, that provides upto Rs. 5 lakhs medical insurance to all BPL card holders). Further, the implementation of several schemes (like YSR Kapu Nestham scheme that promises Rs. 15,000 per annum for 5 years to poor Kapu women) specifically targeted at the Kapu community is an attempt by the YSRCP to break the hold of the JanaSena party on this caste. 

Corruption

Both parties are likely to blame the other for corruption with neither party getting any decisive advantage on this account.  While the TDP has accused Jagan of massive corruption on various counts, the YSRCP has sought to spotlight the involvement of CBN in cases like Amaravati land scam, AP skill development corruption case etc. to counter the same.   

Pending Issues with Telangana

There are several issues that are still yet to be resolved between Telangana and AP. The bifurcation of assets (that are mostly located in Hyderabad), power dues and sharing of river water are all unresolved even nearly after a decade.   The Union Cabinet in October 2023, approved the new terms of reference for the Krishna water dispute tribunal, opposing which AP has approached the Supreme Court. The ugly incidents at the Nagarjuna Sagar Dam on November 2023 seem as a grim reminder on how issues that led to the state bifurcation like water sharing still remain emotive politically.

Capital controversy

The YSRCP has publicly accused CBN of illegally profiting from the Amaravathi project by acquiring lands in the area on benami basis.  The TDP on the other hand has been trying to pin down the YSRCP for vacillating on the decision regarding the capital, even 10 years after Telangana was created.  I believe that the TDP may gain some traction on this issue in the areas surrounding Amaravathi.

In the last and concluding post next week, I will share my projections for the state and answer some key questions that will be crucial for the upcoming elections.

1. Source: 2011 census

2. Source: 2011 census

3. Source: 2011 census