The bifurcation of the Telugu states has come at a cost. The 13-years agitation resulted in the loss of 2,000 lives, Rs 10,000 cr loss to public sector including RTC, Railways, Collieries, Utilities Entities and as per rough estimates, the private sector loss was Rs 30,000 cr.

As Telangana is celebrating its formation day on this June 2nd, it is relevant to note how after 11 years of the bifurcation Telangana and Andhra Pradesh states are faring in economic development. 

The pre-bifurcated AP State had GDP of Rs. 4.20 lakh crores in year 2013. The GSDP growth rate was 7%. The per capita GSDP was Rs. 42,186. The combined state had 8.4 crs population with 1.1% growth rate. The unemployment rate was about 5%. The state had crime rate of about 2.5%. The annual budget was Rs. 1,60,000 crs in 2013-14 with a fiscal deficit of 3.2%. Overall, in development ranks, pre-bifurcated AP stood 8th in India.

As at 2024-25, post bifurcated Andhra Pradesh state’s GDP is Rs. 16,41,000 crs. The GSDP growth rate is 12.5%. The per capita GSDP is Rs. 2,68,653. Population is 5.4 crs with 0.9% growth rate. Unemployment is about 7%. The crime rate is 2.5%. The State’s annual budget is Rs. 2,94,427 with a fiscal deficit of 4.2%. In development ranks, the State stood 7th.

As at 2024-25, Telangana state’s GDP is Rs. 16,12,578 crs. The GSDP growth rate is 12%. The per capita GSDP is Rs. 3,08,732. Population is 4 crs with growth rate of 1.2%. Unemployment is 6%. The crime rate is 2.5%. The State’s annual budget is Rs. 3,04,965 crs with a fiscal deficit of 3%. In development ranks, the State stood 6th.

Overall, in parameters such as population growth, and overall development rank both Telangana and Andhra Pradesh maintained the pre-bifurcation trend. However, post bifurcation the per capita GSDP increased in both states. These developments hint that it is beneficial to bifurcate larger states into smaller states on logical grounds and requirements.

Famous economist Dr. Montek Singh Ahluwalia has been recommending to split larger states into smaller states as he opines that urbanization will have better distribution with development of more cities. He explains that smaller states mean decentralization and will improve infrastructure, investments, and overall development of multiple regions avoiding concentration risks and perils.  

Regarding Telangana and Andhra Pradesh, both states have benefitted from the bifurcation and saw huge overall development and in particular accelerated growth in IT, Pharma, Agriculture, and Infrastructure surpassing national growth rates.

However, on governance, crime rate, unemployment rate, and fiscal deficit parameters, both States almost remained where the pre-bifurcated state was and requires improvement. This warrants attention of the policy makers of the both the states.

Dr. Kishore Nuthalapati is an economist and a corporate finance professional. He is serving as the CFO of BEKEM Infra Projects Pvt Ltd, Hyderabad, India.