A tale of two states: As hopes fade for Amaravati, Andhra Pradesh scores a self-goal

Moreover, it was predicted that since the new state of Telangana was built on the animosity for the domineering Andhra elite, it would essentially lead to a flight of capital and Telangana would be left without substantial entrepreneurial talent.

Such dire predictions were never made for Andhra Pradesh, except that the loss of Hyderabad would make the state substantially poorer. But there was no doubt then that Andhra would rise, and it was only time before entrepreneurship and commerce joined hands with a rich hinterland to produce a prosperous and sustainable state.

It was said that Telangana was a rich state with poor people and Andhra was a poor state with rich people.

However, it is Andhra Pradesh which now looks and sounds like a failing state, unable to choose a capital, or stick with a capital that has already been chosen. The capital Amaravati is sought to be changed for no great reason.

At the heart of this controversy is the assumption that Telugu Desam leaders and caste groups, which are favourable to the Telugu Desam, might be the long term beneficiaries if the capital were to remain at Amaravati. The allegation is that there were huge benami purchases of land by Telugu Desam leaders and if the capital were to be changed, it would reduce their clout and influence.

Moreover, north coastal Andhra Pradesh and Rayalaseema could benefit by the new three-capital formula, the argument goes. A new state like Andhra Pradesh needs to give a signal of political continuity and stability, but a change of capital would be deeply disruptive. When there are no resources to build a single city, where would there be resources for three capitals?

Author and political commentator Amy Chua in her book titled, Political Tribes: Group Instinct and the Fate of Nations, coined the term ‘market-dominant minorities’ in the sense of some social groups who possess substantive entrepreneurial energies and are likely to turn every opportunity into a money-making venture. Formation of a new state capital too is one such opportunity and to expect such ‘market-oriented minorities’ not to take advantage is being naive. Governments cannot avoid these entrepreneurial communities and hoping to exclude them could cause more administrative headaches than a new state like Andhra Pradesh can handle.

Cities are the new engines of growth in India, and any state which does not have a clear idea on where the capital city is going to be can just walk out of the competition for investments, startups, people and talent. The competition is getting cut throat between Hyderabad, Bangalore and Chennai, and Andhra Pradesh without a capital is not even in the race.

Surprisingly, despite a robust agitation in and around the Amaravati region and perhaps Vijayawada, there is no political unrest elsewhere in the state on the decision of shifting the capital. Jagan Reddy is still in the honeymoon period, and his voters don’t seem to mind it much. It is also perhaps the case that Amaravati had not caught on the imagination of the people despite the high profile propaganda of Chandrababu Naidu.

While Amaravati and Andhra are fading out, Hyderabad seems to be on a path of revival. The expected flight of capital and talent to Andhra has not happened. It is to the credit of the rulers of Hyderabad that the entrepreneurial settlers from Andhra Pradesh are being courted and their fears assuaged. Hyderabad’s gain is Amaravati’s loss. The worst-case scenario for Andhra Pradesh would be a kind of reverse drain of talent and capital back to Hyderabad. It would be a loss hard to recover from. And in the hard-nosed world of investments and commerce, no one likes a loser.