The Telugu Desam Government did not focus on enhancing the productivity capacity of  Telangana people.

• It had never given adequate importance to redistribution and capacity enhancing processes, Instead it relied heavily on populist welfare schemes.
• It launched a populous rice e distribution programme through a public distribution system. It was known as “two rupees a KG rice scheme’.
• On the face of it this scheme looks very laudable but it very badly affected the cropping and consumption patterns of rain fed agriculture areas.
• Area under the Irrigated- Dry (ID) food crops like Jowar, Ragi, Bajra, Sorghum etc came drastically crashing.
• The PDS system never took into consideration the variety of staple food and thus no procurement price was ever fixed for these crops.
• Rice cultivation and procurement Wac given topmost priority with assuring minimum support price.
• This adversely affected the food security and food consumption patterns of non delta regions. This scheme benefited the rice producing areas and made the rice millers richer and richer.
• The subsidy which was Rs. 78 crores in 1983-84 reached Rs 523 crores in 1992-93. This is the seamy side of the scheme. The same Telugu Desam government popularized liquor consumption officially from 1983-84.It allowed sale of liquor through sachets across the state. In 1983 the government earned Rs.235 Crores and by 1991-92 it raised to Rs.839
• Whatever little the poor people saved probably might have been successfully extracted through Amck sales. The government extracted almost double the amount spent on subsidy to rice through sale of arrack. This paved the way for the anti-arrack struggle in the early 1990s.
• The Party which promised alternatives to the congress party and its politics failed to focus on distribution and enhancing the productive capacities of the people in reality evolved more as a party representing dominant sections of coastal region. This perception was shared by many in the 1990’s.