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Telangana Economy

Telangana was under the Nizam’s rule until its integration into the Indian Union on 17th September 1948.

  • Andhra state, comprising Coastal Andhra and Rayalaseema, separated from Madras Presidency in 1953.
  • Despite the States Reorganization Commission’s recommendations in 1955, Telangana and Andhra were merged to form Andhra Pradesh on 1st November 1956, largely due to the linguistic similarity (Telugu).

Development in Hyderabad State under Nizam’s Rule

  • The development in Hyderabad state is categorized into three major economic aspects: agriculture, industries, and services, with specific attention to the period under Salar Jung’s reforms (1853-1883).

Demographic Features

  • Population growth in Hyderabad state was higher than the all-India average from 1881 to 1951.
  • The workforce shifted significantly towards agricultural labor by 1941 but reverted somewhat by 1951 due to land reforms and the state’s merger with the Indian Union.

Salar Jung Reforms

  • Abolition of Jagirs: Defined farmers’ rights, land revenue, and powers of taluqdars; customs duties were reformed to increase government revenue.
  • Establishment of Departments: Various departments were established to manage different aspects of the state’s economy, such as irrigation, mining, and accounts.
  • Economic Development: Hyderabad state’s development is divided into two phases:

Phase I (1724-1857): Primarily agrarian with minimal industrial development.

Phase II (1857-1948): Industrial foundations were laid, with land reforms, Ryotwari system, and other administrative changes.

Agricultural Development

  • Salar Jung’s reforms transitioned agriculture from subsistence to market-oriented production.
  • Despite initial neglect, irrigation development was undertaken in the early 20th century, leading to a significant increase in irrigated areas and commercial crops.

Industrial Development

First Phase (1870-1919):

  • Early industrial development with railway expansion, mining (Singareni Collieries), and establishment of agro-based industries.

Second Phase (1919-1939):

Continued industrialization with government support through the Commerce and Industries Department (CID) and the Industrial Trust Fund (ITF), which financed large-scale and cottage industries.

  • Demonstration Weaving Factory (1920): Established to provide technological knowledge in weaving.
  • Cottage Industries Institute (CII, 1930): Provided skills and training for handicrafts and cottage industries, like silk, wool garments, bidriware, toy manufacture, and leather products.
  • Industrial Cooperatives (1920): Formed to support the marketing of industrial products, including setting up a permanent industrial exhibition in Hyderabad city.
  • Industrial Laboratory (1917): Conducted experiments to produce goods from local materials, supporting technical advancements in manufacturing.
  • Industrial Engineering Section (1926): Provided technical support for engineering products under the government sector.

Financial Support:

  • The Nizam’s government made significant efforts to provide financial aid to stimulate industrial development, including the introduction of a new fiscal system in 1922 to strengthen tax revenue and increase public expenditure.
  • The government refrained from imposing customs duties on industrial raw materials and export duties on manufactured goods, following an Export-Import (Exim) policy during the Great Depression to encourage exports, particularly oil seeds

Infrastructural Facilities:

  • Nizam State Railway Company (NSRC): Developed the railway network within the state.
  • Road Mechanical Transport Service (RMTS, 1932): Became the first state-owned road transport undertaking in India.
  • Civil Aviation: Also started under NSRC.

Hydroelectricity Production: Began from the Nizam Sagar canal in the 1930s.

  • The number of large industrial establishments grew significantly, with a notable increase in oil, rice, and flour mills, small-scale motor and engineering workshops, button factories, match factories, and tanneries.

Third Phase (1939-1949)

Development of Non-Agricultural Sector:

The demand generated during World War II spurred the expansion of machine tools, chemical industries, paper mills, and forest produce-based industries, leading to a shift towards non-agricultural sector industries.

  • The Nizam state made substantial investments in establishing large industrial units, often with high installed capacities, reflecting a structural change towards capital concentration.

Industrial Development Through Plans:

  • The idea of state-planned economic development emerged during this phase, with the implementation of strategies for industrialization becoming more prominent.
  • Godavari Industrial and Agricultural Development Plan (GIADP): An ambitious plan prepared during the last year of World War II aimed to establish an industrial township on the south bank of the Godavari River in Karimnagar district, with a projected cost of Rs. 240 crores to set up various industries like chemical, glass, cement, and rayon.

Despite these efforts, post-World War II conditions, including a decline in external demand and the socio-political disturbances, hampered the pace of industrialization in Hyderabad state

Q. Explain how the economic policies and initiatives implemented during the Asaf Jahi’s rule in the Erstwhile Hyderabad state led to industrial growth and development in the region?

Introduction In the Asaf Jahi period, after Salar Jung’s reforms, the industrial policy formulated could help the industrial development in the Nizam state.
Body Key economic policies and initiatives were:

·         Industrial Promotion: The government established the Industrial Promotion Board to encourage the establishment of industries in Hyderabad state. It provided various incentives, subsidies, and tax benefits to attract industrial investments.

·         Infrastructure Development: The government focused on developing infrastructure to support industrial growth. It invested in the construction of roads, railways, ports, and communication networks, which facilitated the transportation of goods and raw materials. Eg: the Hyderabad-Solapur road.

·         Investment in Key Sectors: The government identified and invested in key sectors such as textiles, sugar, cement, mining, and engineering. It provided financial assistance, technical support, and infrastructure facilities to promote the growth of these industries. E.g Nizam sugar factory, VST factory etc.

·         Land Reforms: The Hyderabad state government implemented land reforms to address issues related to land ownership and tenancy. These reforms aimed to provide security to landholders and encourage investment in agriculture and related industries.

·         Support for Small and Medium Enterprises (SMEs): The government recognized the importance of SMEs in driving economic growth and provided support in the form of financial aid, technical assistance, and training programs to promote the development of small-scale industries.

·         Industrial Training Institutes: The government established industrial training institutes to provide skilled manpower to industries. These institutes offered vocational training programs to enhance the employability of individuals and fulfil the industry’s demand for skilled workers.

·         Encouragement of Public-Private Partnerships (PPPs): The government encouraged collaborations between the public and private sectors to promote industrial growth. It facilitated joint ventures, provided land grants, and offered other incentives to attract private investment in infrastructure development and industrial projects.

·         Export Promotion: The Hyderabad state government took initiatives to boost exports by establishing export promotion councils, organizing trade fairs and exhibitions, and providing export incentives and subsidies to industries engaged in export-oriented activities.

·         Labour Welfare: The government implemented policies to ensure the welfare of industrial workers. It introduced measures related to minimum wages, working conditions, social security, and employee benefits to protect the rights and well-being of the workforce.

During the Hyderabad state period, the initiatives implemented by the government of Hyderabad state to promote industrial growth and development had a positive impact, albeit relatively smaller compared to some other regions in India.
Conclusion The initiatives implemented by the government of Hyderabad state to promote industrial growth and development had a positive impact, albeit relatively smaller compared to some other regions in India.
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