Difficult Times in Andhra Pradesh

Andhra Pradesh was once seen as a state with good governance by Indian standards. In recent years, the problems seen with Satyam, attempts to harass Nimesh Kampani, etc. have led many to question the quality of governance in Andhra Pradesh. Today, John Elliott has an important article in the Financial Times on the difficulties of Andhra Pradesh.

I took a look at the CMIE data on investment projects outstanding to measure the share in the investment projects at hand in India. I found that the action was strongest in state-wise data for projects which were `Announced’ (and not `under implementation’). The two states with the biggest decline in the share in India were West Bengal and Andhra Pradesh:

Andhra Pradesh West Bengal
Jun ‘08 7.46 8.00
Sep ‘08 6.43 7.31
Dec ‘08 7.15 8.19
Mar ‘09 6.20 6.48
Jun ‘09 6.29 5.71
Sep ‘09 5.43 5.56

For Andhra Pradesh, the decline over this period was 2.03 percentage points and for West Bengal, the decline was 2.44 percentage points. These are the two biggest declines across all the states in this period.

All these values are a far cry from the biggest share of Andhra Pradesh ever seen — which was 18.53% in December 2001, when Chandrababu Naidu was chief minister. For a comparison, the peak share seen for West Bengal was 8.25%, which was in March 2008, when the CPI(M) was still a part of the UPA; we can vividly see the decline from that point to 5.56% in the latest data. The full time-series for all states are here.

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