Financial Plunder | Telangana Library

Telangana contributed the majority of Andhra Pradesh's revenues for over five decades. It received a fraction back in development expenditure. This was not an accident or an administrative oversight. It was documented, confirmed by government-appointed committees, and visible in the official records of the state's own finance ministry. It was, plainly, plunder.

The financial exploitation of Telangana in the integrated state of Andhra Pradesh is not a matter of interpretation or political argument. It is a matter of official record, confirmed by committees appointed by the Government of India, acknowledged in statements made on the floor of the Andhra Pradesh Legislative Assembly by the state's own Finance Minister, and documented in the annual statistical publications of the state's own Directorate of Economics and Statistics. The numbers are not in dispute. Only their significance has been ignored, denied and misrepresented for decades.

The core facts are these. From the very first day of Andhra Pradesh's existence in 1956, Telangana contributed more to the state's revenues than it received in development expenditure. This pattern, which the Gentlemen's Agreement had specifically prohibited, continued uninterrupted for over fifty years. Telangana, which held 40.69% of the state's population and 41.67% of its geographical area, consistently contributed 61% to 76% of the state's total revenues, while receiving far less than its proportional share of spending.

76%

Maximum share of AP's total revenues contributed by Telangana, confirmed by Finance Minister Rosaiah's own assembly data, 2007

41.07%

Of Telangana's revenues diverted to Andhra in the very first year of the merged state, 1956 to 57, confirmed by the Lalit Committee

12.43%

Average annual diversion of Telangana's revenues to Andhra over the first 12 years, 1956 to 1968, confirmed by two government committees

The Evidence the State Could Not Hide: Rosaiah's Statement

In March 2007, five members of the Andhra Pradesh Legislative Assembly asked Finance Minister K. Rosaiah to provide region-wise details of revenue income and expenditure for the previous three years. Rosaiah had no choice but to answer formally on the floor of the house. What he placed on the table confirmed, from the state government's own official figures, the systematic financial disparity that Telangana had been documenting for decades.

Even in Rosaiah's presentation, which attempted to minimise the disparity by artificially separating Hyderabad headquarters revenues from Telangana's regional revenues, the numbers told an unambiguous story.

Revenue Contribution by Region, Excluding Hyderabad Headquarters (Rosaiah Data, AP Assembly March 2007)

Telangana

52–61%

Contributed more than Andhra and Rayalaseema combined, with only 40.69% of population

Andhra

31–38%

With 41.58% of population

Rayalaseema

8–10%

With 17.73% of population

When Hyderabad headquarters revenues were correctly attributed to Telangana, as mandated by the Finance Secretary's own letter of 3 February 1969, Telangana's true contribution to AP's revenues ranged from 74% to 77% across all four years examined. Andhra and Rayalaseema together contributed just 23% to 25%.

Revenue Contribution Including Hyderabad Headquarters (Correctly Attributed per Finance Secretary Circular, 1969)

Telangana with HQ

74–77%

Nearly three-quarters of all AP revenues

Andhra + Rayalaseema

23–25%

Barely one quarter of total revenues

The Rosaiah Data in Full

Region-wise Revenue Income of Andhra Pradesh (Rs. in Crores)

Region	2003–04	2004–05	2005–06	2006–07
Andhra	2,796	3,494	3,702	3,690
Rayalaseema	730	867	1,004	987
Telangana (excl. HQ)	5,565	4,725	5,935	6,093
Headquarters (Hyderabad)	5,095	8,311	9,708	9,319
Grand Total	17,406	20,680	24,404	25,069

Source: LAQ No. 7406 (Starred), AP Legislative Assembly Session 9. The Finance Secretary's circular of 3 February 1969 mandates that headquarters revenues be credited to Telangana, making Telangana's true contribution 74 to 77% of the state total.

Region-wise Plan Expenditure of Andhra Pradesh (Rs. in Crores)

Region	2003–04	2004–05	2005–06	2006–07
Andhra	3,848	3,799	4,532	3,489
Rayalaseema	2,150	2,411	2,684	2,881
Telangana	5,158	5,546	711	5,987
Headquarters	706	893	976	682
Total	11,862	12,649	15,303	13,039

Andhra and Rayalaseema's plan expenditure far exceeded their own revenue income. Telangana's expenditure was billions below its own income. The difference was transferred elsewhere.

Sales Tax and Excise: 75% From Telangana

Sales tax and excise collections together constitute approximately 80% of the state's own tax revenues. The data from the state's own Directorate of Economics and Statistics confirms Telangana's dominance in both streams, consistently, across every year for which data is available.

Region-wise Sales Tax Collections

Year	Andhra + Rayalaseema	Share	Telangana	Share
2000–01	Rs 1,39,843 lakhs	24.38%	Rs 4,33,796 lakhs	75.62%
2003–04	Rs 1,79,212 lakhs	23.48%	Rs 5,83,902 lakhs	76.52%
2005–06	Rs 2,06,984 lakhs	24.26%	Rs 6,46,371 lakhs	75.74%

Source: Directorate of Economics and Statistics, Government of AP, Statistical Abstracts.

Excise Collections: Telangana vs State Total (Rs. in Crores)

Year	Total AP	Telangana	Telangana Share
2005–06	3,436.63	2,460.63	71.6%
2007–08	4,056.86	2,966.13	73.11%
2008–09	5,753.43	4,077.45	70.86%

Source: Office of the Commissioner of Prohibition and Excise, Government of AP.

The First Twelve Years: What the Lalit Committee Found

The exploitation did not begin in the 2000s. It began on 1 November 1956, the very first day. The Lalit Committee, constituted by the Comptroller and Auditor General of India, examined the period from 1 November 1956 to 31 March 1968 and confirmed systematic diversion of Telangana's surplus revenues to Andhra every single year.

Transfer of Telangana's Surplus Revenue to Andhra, 1956 to 1968 (Rs. in Lakhs)

Year	Telangana Revenue	Expenditure	Transferred to Andhra	% Transferred
1956–57	1,093.88	644.58	449.30	41.07%
1957–58	2,244.79	1,896.67	348.12	15.51%
1958–59	2,667.18	2,242.69	424.49	15.92%
1959–60	3,451.10	2,598.16	852.94	24.72%
1960–61	3,352.36	3,000.34	352.02	10.50%
1961–62	3,810.83	3,381.37	429.46	11.27%
1962–63	4,506.55	3,837.69	668.86	14.84%
1963–64	5,091.79	4,228.95	862.84	16.95%
1964–65	5,375.91	4,764.70	611.21	11.37%
1965–66	6,087.29	5,555.39	531.90	8.74%
1966–67	7,044.00	6,376.45	667.55	9.48%
1967–68	6,720.47	6,526.31	194.16	2.89%
Total	51,446.15	45,053.30	6,392.85	12.43% avg

Source: Report on the Quantum of Telangana Surpluses, Kumar Lalit Report, Government of AP, 1969. Independently confirmed by the Bhargava Committee under a sitting Supreme Court judge.

If the amounts of surplus found which remained unspent in any year had actually been spent in that very year or in the year succeeding, the amount of development which could have been brought about could have been much larger. If these amounts had been spent in those very years when they were available for development, the prompt execution of the works of development would have given its own return and that return would have further accelerated the pace of development.

Report of the Bhargava Committee, Supreme Court Judge's Committee on Telangana Surpluses

The net result is that the Telangana region is contributing more revenues to the State's exchequer than the other regions, and in turn getting far less than what it is entitled to in the realm of expenditure. It has been going on for more than half a century, causing immeasurable damage to the economy and people of the region. To epitomize it in one phrase, the region has been plundered.

On Telangana's financial position in the integrated Andhra Pradesh