How far the Modi Government could go, if at all, to help TDP, a ruling ally in AP, for capital construction cannot be assessed yet, given a token provision in the Union Budget as assistance to the state. Also, its responses are vague so far on grant of 'special status' promised by the Congress-led UPA Government, outside the AP Reorganisation Act it rushed through Parliament, in a clumsy pre-poll ploy, which misfired for the party.

With all his penchant for abusive language and fulminations against the media, the Telengana Chief Minister Mr K Chandrasekhara Rao (KCR) runs the new State he got on a platter with Hyderabad as its capital, like a fiefdom, and all the big plans for the future and welfare schemes for the present he has been announcing over the last 120 days have no fiscal backing. He wants to develop Telengana and its infrastructure on the model of Singapore he had rushed to visit for a study.

But Mr Rao is still struggling to present his government's maiden budget for 2014/15 for his 'Golden Telengana' and is toying with an ordinance for authorisation of spending for another two to three months. Current authorisation expires on September 30, the first six months from April 2014, covered in the previous Congress Government's interim budget. Mr Rao's task forces to frame a Telengana-centric budget have so far failed to come up with proposals that would find Mr Rao's acceptance. An Assembly session is held in suspense.

Both Mr Rao and Mr Chandrababu Naidu have also not been able to honour thus far their electoral commitments of waiver of farmers' loans including gold loans. RBI firmly rejected such write-offs of debt owed to banks and also any restructuring of crop loans. While Mr Naidu is exploring ways of raising limited resources, making an initial payment to indebted farmers and issuing bonds for the remaining crop loan dues, Telengana is still groping for a solution.

Both states have sought to bring down the debt for waiver by removing gold loans from write-offs and by this, the reduced commitments would be approximately Rs. 35,000 crores in AP and some Rs. 16,000 crores in Telengana. AP Ministers said the loan waiver would be implemented in toto. Opposition parties in Telengana, the Congress and BJP, have flayed the Rao Government for flouting its poll promises, including three acres of land to each landless dalit family.

A 'Hate Campaign', as is now characterised, is perceived in several KCR moves directed against 'Andhrites' in Hyderabad and the Telengana districts, the removal from school text books of all references to Andhra history and culture, and efforts to rename well-known institutions so as to honour Telengana-born poets and scholars. Indeed, the intense state-wide house-hold survey conducted on August 19, as directed by Mr Rao, was regarded as an attempt to isolate Telugus not born in Telengana thus enforcing a rule of 'nativity'.

Though Mr Rao stoutly rejected any discrimination underlying the survey, which he claimed was a 'super-hit' and a model for the rest of India, it did cause concern at the highest levels of Central Government. Weeks later, at his meeting with Prime Minister, Mr Modi advised Mr Rao to ensure 'Telugu brotherhood' and said it should be his responsibility to ensure peace and harmony in Hyderabad, the joint capital for the two bifurcated states for ten years.

With coffers virtually empty, both the Chief Ministers have taken refuge in the fiscal dispensation for 2015-20 that the 14th Finance Commission would recommend, and have made forceful presentations of their respective plights before the Commission headed by Dr Y Venugopala Reddy, former Governor of RBI. Telengana CM has urged raising of states' share in the devolution of central taxes and duties to 40 per cent while Mr Naidu wants it enhanced to 50 per cent.

The Commission has reportedly said it would recommend for the states a package which would ultimately be 'desirable, feasible and realistic'. Citing their demand for 'special status', Telengana pleaded for higher grants-in-aid of the order of Rs. 234,745 crores for five years, waiver of the new state's share of outstanding debt of pre-partition AP, special development packages for Telengana schemes and exclusion of petroleum and liquor in the proposed GST to be left to states.

Mr Naidu harped on the 'forced and unscientific' decision of AP by UPA and sought the Commission support for new capital to be built, having been deprived of the benefits of 14 lakh crore of investments made by Centre, State and Private Sector together over the years for the development of Hyderabad. He put the estimate of funding support needed for the project at Rs. 100,213 crores over a five year period. Mr Naidu also made out a case for Centre sharing with states a part of all its non-tax revenues through sales/auctions of natural resources like spectrum etc and disinvestment proceeds.

Governance has overall taken a beating in the two states over the last four months, more in particular in Telengana, where Mr Chandrasekhara Rao's own tall promises of the state becoming a 'model state' with hassle-free entry for industry, irrigation for 75 lakh acres, zero corruption and a wide range of welfare schemes within five years have lacked credibility with most sections. So much so that Mr Rao himself confessed that he could not claim any achievements in the 100 and odd days but that from now on, implementation would be the focus.

He characteristically told a public rally recently that if he did not keep word on his (electoral) promises, 'I would chop off my head'. Irrespective of his record and rhetoric so far, Mr Rao's TRS (Telengana Rashtra Samiti) is drawing more adherents from other parties. Strong criticism of his style of exercise of authority and utterances also came from former Congress Union Minister Mr Jaipal Reddy who said Mr Rao was 'destroying centuries-old cosmopolitan and cultural image of Hyderabad”. Mr KCR's outbursts against the media evoked a series of denunciations from newspaper organizations, one of which said they would resist any attempt to 'intimidate or harass publications.”

In AP, having settled for Vijayawada region as the central place for locating the capital, Chief Minister Chandrababu Naidu has also plans for creating three mega cities and 14 smart cities to bring about a great deal of decentralised development. His Government would also opt for land pooling system which is being worked out by a Cabinet committee on land acquisition. Mr Naidu’s plans include development of international airports, Vizag-Chennai industrial corridor and major manufacturing zones for steel, cement and other mineral-related industries.

While Telengana and AP have to sort out many major issues related to division of infrastructure enterprises including power utilities, road undertakings and irrigation projects, Mr Naidu is credited with being both investor-friendly and tech-savvy with his record in the evolution of Hyderabad as hi-tech city. AP is also relatively better placed in power generation and both the Centre and AP are working together on 24 x 7 power supply to domestic, commercial and industrial consumers. Mr Naidu hopes to fulfil his promise of 'power for all' within three years. Both states have begun attracting new industries, a Hero Motors manufacturing plant in Chittoor district (AP) and three smaller manufacturing units in Mahbubnagar (Telengana). (IPA Service)