Telangana’s economy grew by 11.2% in real terms in 2021-22, higher than the national national average of 8.9%, as estimated by the National Statistics Office in the second advance estimate of national income for the last financial year. In nominal terms, the gross state domestic product (GSDP) expanded by 19.1%.
To sustain the growth momentum, the state government is taking a host of initiatives, the core objective of which is to make the state more investor-friendly.
“The state economy was resilient to the challenges imposed by the Covid-19 pandemic,” according to Telangana Socio Economic Outlook (TSEC), 2022.
A seamless system of approvals via Telangana State Industrial Project Approval and Self-Certification System (TS-iPASS) ensured investment approvals of more than Rs 7,000 crore in 2021-22 for close to 3,200 projects.
TS-iPASS was enacted in 2014 for speedy processing of applications for issue of clearances required for setting up industries at a single point, based on self-certification.
Industrial parks being developed at different locations in the state are expected to give a fillip to growth. Apart from Hyderabad’s key slot on India’s software industry landscape, manufacturing-sector units in sectors such as automobiles and auto components, mines and minerals, textiles and apparels and pharmaceuticals are boosting the economy, besides being job creators.
Telangana stands out as one of the few states that have successfully managed multiple challenges presented by the pandemic, says the TSEC 2022. According to the outlook, with a nominal per capita income of Rs 2.79 lakh, which was 1.86 times the country’s average of Rs 1.50 lakh in 2021- 22, Telangana is on a healthy growth trajectory that meets the aspirations of its residents.
Based on the compound annual growth rate (CAGR) of per capita income at current prices between 2014- 15 and 2021-22 at the state and national levels, TSEC has stated that the time period in which an average citizen of the state can expect his income to double is 5-6 years compared to 8-9 years for the country as a whole.
While the industrial sector in Telangana experienced a decline in gross value added (growth rate of -1.73%) at current prices in 2020-21, the sector grew by 20.23% in 2021-22. The services sector witnessed a significant growth rate of 18.32% in its GVA at current prices in 2021-22, against a growth of 0.91% in 2020-21.
The agriculture and allied sectors in Telangana remained strong throughout the pandemic and after, achieving, in current prices, GVA of 12.24% and 9.09% in 2020-21 and 2021- 22, respectively.
“Telangana’s agriculture and allied sector has been on an upward growth path for the past seven years, with its growth rate increasing by 9.75 percentage points between 2014-15 and 2021- 22,” TSEC said.
However, TSEC said that over the past few years, there has been increasing uncertainty, both in the manner and timing of fiscal transfers from the Government of India. “While such trends do add to the fiscal stress, Telangana is better insulated from this due to a considerable share of ‘own tax revenue’ in the total revenue receipts,” it stated.
The TSEC has stated that economic growth has been achieved through the facilitation of overall economic growth, and specific initiatives such as strengthening of the commercial taxes department, leveraging technology and analytics to enumerate various liabilities of taxpayers, and tracking the progress of work by the tax authorities.