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Chandrababu Naidu 2.0 returns with populist measures

LiveMint logoLiveMint 08-06-2014 Yogendra

Hyderabad: For a leader who favoured investment-driven policies over populist schemes in his previous tenure, the first file N. Chandrababu Naidu of the Telugu Desam Party signed as chief minister of the new Andhra Pradesh state was in regard to a loan waiver scheme for farmers.

Naidu appointed an expert committee to work out the details for implementing a loan waiver scheme for farmers, beneficiaries of the development of women and children in a rural areas programme and handloom workers, a promise made during the state assembly elections campaign that helped him return to power.

He also signed files regarding the monthly pension of `1,000 for old-aged and handicapped people and a drinking water scheme for all villages by providing 25 litres of mineral water for `2, also promises he made at the hustings. He extended the retirement age of state government employees to 60 years and promised to provide avenues for the unemployed in the government and private sectors.

By appointing the expert panel, Naidu could be only buying time, political analyst K. Nageshwar said. The committee might be unable to submit its report in time for the autumn harvest. “It creates a lot of frustration,” Nageshwar said.

While farmers are indebted, the government should instead focus on improving agriculture and irrigation infrastructure.

“Any loan waiver is something which has to be resorted to in an unprecedented situation,” Nageshwar said. “A loan waiver creates a culture of not paying back. It hits at basic banking norms.”

Promising to follow a decentralized model to develop all corners of new Andhra Pradesh, Naidu assumed office as chief minister of the state at an extravagant public ceremony held in Guntur district, 300km from Hyderabad, the metropolis that will remain the joint capital of both the Telugu-speaking states for a 10-year period.

This was the first time a chief minister of a state assumed office away from the state capital.

The new Andhra Pradesh comprising 13 districts was reborn after Telangana was carved out from united Andhra Pradesh on 2 June. Naidu’s ascent as chief minister is likely to spark an intense rivalry between Telangana and Andhra Pradesh to outbid each other in attracting investments.

E.S.L. Narasimhan, governor of both Telangana and Andhra Pradesh, administered the oath of office and secrecy to Naidu and his cabinet of 19 ministers. Like his counterpart from Telangana state, K. Chandrasekhara Rao, Naidu also appointed two deputy chief ministers, K.E. Krishnamurthy and N. Chinna Rajappa.

Naidu chose 7.27pm as the auspicious time to swear in as the chief minister of the bifurcated state that has the onerous task of building its capital within 10 years. The 64-year-old leader, who has been the longest-serving chief minister of Andhra Pradesh, has the credit of attracting investments in information technology in Hyderabad.

Naidu promised to develop the state as a knowledge hub and a “sunrise state” in the country. “Till I build a new capital, I will work as the No. 1 coolie. I need your blessings for that,” Naidu said. Acknowledging that the new state has to grapple with several problems, Naidu said: “Let us use our intelligence and our resources, and toil hard to develop our state.”

Naidu will govern the country’s eighth largest state spread over 160,205 sq. km with a population of 50 million. The state boasts of having the longest coastline (972 km) on the country’s eastern coast, and has the second largest coastline in the country after Gujarat.

Naidu is also the second person to be at the helm of two states—united Andhra Pradesh and new Andhra Pradesh—after N.D. Tiwari, who was chief minister for both Uttar Pradesh and Uttarakhand.

“The bifurcation of Andhra Pradesh into two new states will have significant implications on resource flow, economic development and the levels of publicly provided services for the two new states. Resource allocation, as well as economic activities in the two regions will undergo significant and dynamic changes because of the move,” D.K. Srivastava, chief policy adviser at consulting firm EY, said in a report.

“It is better to cooperate as two separate states than fight in a united state,” Union minister Venkaiah Naidu said. “Everyone should work for the development of Andhra Pradesh.”

The event was a glitzy affair that saw the attendance of 11 Union ministers. Chief ministers of six states also participated in the ceremony.

“I am confident Andhra Pradesh will emerge as a glorious state under the leadership of Chandrababu Naidu,” BJP leader and Union minister Rajnath Singh said. “(Prime Minister) Narendrabhai Modi has asked to convey that the central government will extend maximum cooperation for the development of Andhra Pradesh,” Singh added.

The swearing-in ceremony took place in a 70-acre ground at Nambur village located between Vijayawada and Guntur towns in the heart of the new state, and was attended by 500,000 people. This region is likely to emerge as the capital the new state.

The scale of the event attracted criticism from Y.S. Jagan Mohan Reddy, leader of the main opposition YSR Congress Party, who refused to attend it citing the extravagant costs involved for the swearing-in ceremony of the government of a state that opens its account for 2014-15 with a revenue deficit of `15,691 crore.

“The new Andhra Pradesh may get larger per-capita transfers via the Planning Commission and central ministries, having been accorded the “special category” status for a period of five years,” Srivastava said. “Telangana, on the other hand, stands to gain more, as it may get larger per-capita transfers from both the Planning Commission and the Finance Commission due to its less-developed and low per-capita income districts (other than Hyderabad),” he added.

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