Capital gain or loss?

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Capital gain or loss?

Wednesday, 22 January 2020 | Pioneer

Capital gain or loss?

Jagan Mohan Reddy may want to develop Andhra uniformly with 3 capitals but the human cost might impact his politics

Andhra Pradesh Chief Minister YS Jagan Mohan Reddy should remember his father YSR Reddy’s overarching nature of politics, one that was about social welfarism and uplifting backwards and one that gave him a bankable legacy. So he should stop over-obsessing about setting up three capitals in a now truncated State, focus on its cash-strapped economy and optimise its resources rather than engaging in a competitive one-upmanship with his predecessor and Telugu Desam Party (TDP) chief Chandrababu Naidu. True, the latter had built his persona by creating futuristic cities as a measure of good governance, be it by redeveloping Hyderabad and giving it a new moniker called Cyberabad or, after losing that to Telangana, attempting a Singapore-style new capital at Amaravati. But considering that much work had progressed on the new capital and was largely acceptable to the gentry for whom it wasn’t too far out of Hyderabad, Reddy might have to pay a political price for stalling the project. For there is a constituency he cannot ignore, that of farmers. The Naidu Government had cracked a land deal with them, whereby they pooled 34,000 acres of farmland in return for stakeholdership of developed land. Now with global investors out of the city, its status reduced to just a legislative capital and unfinished towers turning it into a ghost town, the human cost would bear heavy on Reddy. As it is the crashing prices have meant that farmers have lost out on the land value. They can’t reclaim their old land which has become fallow ever since they were acquired in 2016. Promised doles like annuity for crop loss, they feel cheated although the Reddy Government has increased the pension amount from the existing `2,500 to `5,000. With protesters at his doorstep and his intransigence, Reddy has a man-made crisis that he can ill-afford. His plan of devolving power across the State by developing Amaravati as the legislative, Visakhapatnam as the executive and Kurnool as the judicial capitals may be well-intentioned and help him assuage all his constituencies, particularly catapulting the cosmopolitan Visakhapatnam as a top-tier city, but is ridden with challenges. With the functions of the executive, legislature and judiciary being interconnected, requiring swift approvals and quick transfer of files, governance is bound to suffer a time lag while efficiencies will be compromised. The exchequer, too, will be under additional fiscal stress owing to logistical expenses. The infrastructural costs of building new spaces will make a further dent in the State Budget, though Reddy insists that firming up Amaravati would have been much more expensive. Most importantly, the movement of staff for allied or overlapping issues could end up disturbing the bureaucracy. Then there is the larger issue of a loss of face among investors, both global and domestic. Allegations of malpractices that the Reddy regime has been levelling against Naidu’s contracts have scared prospective investors. The repudiation of past contracts has raised doubts about their sanctity in the State, which would henceforth be dependent on regime change and new governance priorities. This has already spooked most business houses. At the moment, Andhra Pradesh has topped the official ease of doing business index, relegating Telangana to the second spot. But given the decentralisation move, it may not be able to hold on to this advantage for long.

Decentralising capitals, though new to India, has been experimented in 15 countries across the world. In South Africa, for example, Pretoria is the administrative capital, Cape Town is the legislative capital and Bloemfontein is the judicial capital. In Sri Lanka, too, while Sri Jayawardenepura Kotte is its official capital and seat of national legislature, Colombo is the de facto seat of national executive and judicial bodies. Moreover, India, too, is not alien to having twin capitals because of seasonal reasons in Maharashtra, Himachal Pradesh and the former State of Jammu & Kashmir. The constitutionality of having diversity of governance within the States through just distribution of powers, thus, stands the test. So long as it is kept within the realm of pragmatism than political sabre-rattling. Reddy’s test will now be in the Upper House where his party does not have absolute majority and where the TDP is a thorn in the flesh. All the more reason for him to act in a prudent manner, so that his moniker of Bhramaravati (illusionary city) for Amaravati doesn’t end up being used against him. The BJP, with Pawan Kalyan, is waiting for him to make a mistake.

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