700 Hyd Firms Shift To AP, Puncturing Anti-Telangana Propaganda About Tax Revenue

Media reports quote that at least 700 small and medium businesses owned by people from Seemandhra have shifted their registered offices from Hyderabad to truncated Andhra Pradesh state over the last few months. Also, around 118 new companies have been registered in residuary AP while only 12 have been registered in Telangana. It is said that some of the companies that shifted have all their manufacturing and production facilities located in residuary AP and therefore find no reason to continue their registered offices in Hyderabad, away from them.

These developments only vindicated what Telangana intellectuals have long been arguing – that the budgetary surplus of Telangana is exaggerated without considering the mandatory shifting of registered offices for PSUs and the possible shifting, like those mentioned above, that would drain the tax collections.  The propaganda before creation of Telangana State stood on the lie that AP would lose enormously in taxes by losing Hyderabad. Once the PSUs are bifurcated, the tax collections would be evenly distributed as mentioned even in the Sri Krishna Report. It is based on this propaganda that AP has been demanding a special category status as well to rescue it’s fiscal situation. Union Minister Venkaiah Naidu peddled these propaganda right in Rajya Sabha, which was objected right then by experts. Some even said Hyderabad will consistently get 70% revenue and that Telangana would keep benefitting in future. Whereas Telangana protagonists have maintained while Hyderabad does give additional revenue, the figures were bloated and don’t reflect taxes collected through PSUs and many firms which have production and operations entirely in Coastal Andhra and Rayalaseema. In fact, knowing these facts all too well, Telangana State has wasted no time in hitting the ground running to attract new investments and generate new revenue and keep Hyderabad’s growth engine revving. In the first 20 days of  it’s governance, Telangana Government realized almost a 1000 Cr investment in manufacturing. That should reassure even as some companies move like this, as expected.

It will get more clear on the revenue front in the day to come and it would be equally difficult for AP to sustain the propaganda about ‘huge deficit’ budget.