The district, along with Ranga Reddy, accounts for lion’s share of revenue

Ever since the Congress Working Committee and UPA Coordination Committee announced the creation of Telangana State with Hyderabad as common capital for 10 years, a question that has been doing rounds is distribution of revenue earned by the State Capital between the new State and the Andhra Pradesh.

The capital region comprising the districts of Hyderabad and Ranga Reddy accounts for significant portion of State revenue. With Greater Hyderabad becoming a hub of commercial and business establishments, industries, IT companies, the capital region has emerged as the major revenue grosser for the State in the last 10 years.

For instance, while the State revenue during 2012-13 was Rs.69,146.5 crore, the share of Hyderabad and Ranga Reddy was about 50 per cent at Rs.34,100.73 crore while the revenues of Andhra, Rayalaseema and Telangana leaving twin cities account for over Rs.35,000 crore.

The Group of Ministers to be appointed by the Centre would apportion the revenues as well as other resources such as water, energy and government employees as per set formulae. But with Hyderabad emerging as the bone of contention between the two regions, speculation is rife on what basis its revenues will be shared between them for the next 10 years.

Sources say that it could be either on the basis of population in the two states or it would be distributed equally between the two entities.

Special mechanism

A senior official said that a special mechanism or authority would have to be evolved to assess the income from Hyderabad and Ranga Reddy districts from various sources such as Commercial Taxes, excise, transport, stamps and registration, etc., and distribute it as per the agreed formula between the two States.

Sources also said that Hyderabad had become the growth engine of the State over the decades but it might not be so once the State was bifurcated and a new capital identified for the Andhra Pradesh State sans Telangana. The new capital to come up in Andhra may register higher growth rate due to new investments or flight of capital from Hyderabad over the next decade, they say.