Exploring Telangana’s Economic Landscape

Amidst the ongoing buzz of the 2024 general elections in India, let us look into the economic landscape of Telangana, the country’s youngest state, established in June 2014. Telangana is set to vote for all 17 Lok Sabha seats in a single phase on May 13, marking the fourth phase of the national polls.

Telangana is one of the rising stars in India economically. Boasting a growth rate exceeding the national average, Telangana’s Gross State Domestic Product (GSDP) reached an estimated ₹14.0 lakh crore in 2023-24 BE. The state’s GSDP grew at a CAGR of 10.23% between 2018-19 and 2023-24BE.

Industrial Growth

The services sector is the major contributor to the state’s GSDP. The primary sectors in the state are IT and ITeS, pharmaceuticals, and agriculture, followed by aerospace, automobiles and textiles. Hyderabad, the capital city, is a prominent centre for both the IT and pharmaceutical industries. It secured the second position in JLL’s City Momentum Index (CMI) 2019 among the top 20 global cities.

As of April 2023, Telangana boasted a total installed power capacity of 18,065.95 MW, with contributions from state, private, and central utilities. Thermal power led with 10,331.92 MW, followed by renewable energy, hydropower, and nuclear power.

According to the Airports Authority of India’s report, Hyderabad airport witnessed freight traffic of 61,058 MT in FY23 (until August 2022).

Foreign Investments

According to the Department for Promotion of Industry and Internal Trade (DPIIT), Telangana state received a cumulative FDI inflow of US$20.2 billion from April 2000 to March 2021. Between October 2019 and March 2023, the FDI inflow reached US$4,745 million. In 2020, the state recorded 57 investment intentions, proposing investments worth ₹7,392 crore (US$996.5 million).

Telangana’s favourable policies, skilled labour pool, and robust infrastructure are attracting global firms, especially in the IT and pharmaceutical sectors.

Export Trends 

Telangana is a significant export contributor in India, recording exports worth US$4,637.73 million in FY 2022-23 (up to August 2022). Key exports include Drug Formulations, Biologicals, Residual Chemicals and Allied Products, Bulk Drugs, and Drug Intermediates.

Ranked 6th in export readiness (2nd among landlocked states) by NITI Aayog’s Export Performance Index Report 2020, Telangana is enhancing its export potential. The state initiated the ‘One District, One Product’ scheme with an aim to identify and promote products with high market potential for export and import substitution.

Conclusion

As Telangana continues its rapid growth with remarkable economic achievements and substantial developments, it paves the way for an exciting future trajectory. With a thriving industrial landscape, robust infrastructure, and a conducive business environment, Telangana is poised for further transformation and innovation. Witnessing its ongoing transformation in the coming years will be intriguing.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.