HYDERABAD REALESTATE UPDATE
Separation of State. Impact of Telangana Heat. A Hard Look at the
Political Situation (Part A)
This is an independent commentary on the current state of affairs. As
you are aware, political postures change at blink of an eye, which
would in turn make all previous comments on Real Estate meaningless.
Part A looks at whether Division of the State can happen at all and
when. Part B (to be released soon!) will review the possible impact on
Real Estate.
1.0 Technicality of Division
While people are shouting at each other about dividing the State, no
one seem to really know how it can be put into practice! There are 2
ways, to achieve division.
a) By way of Recommendation from SRC which is constitutionally binding
on Union Govt and the State Govt. But this is a very long term
procedure. Almost everybody agrees that once the Telengana matter is
referred to SRC, division may never happen!
b). Union Government drafts a bill for the creation of a separate
state of Telengana and then sends it to AP Govt. which has to Table it
in Assembly and get it approved unanimously or by majority voting. The
Bill then has to be passed by Loksabha and Rajya Sabha and President's
Consent obtained on the Reorganization Act.
At the moment, SRC is not in the picture. If you look at Point b)
above and check the political equation today and what could happen in
the next few years, after the upcoming Assembly Election and the Union
Election, you would know where we stand!
2.0 UP and MP were divided. Why not AP? What is the big issue?
The actual reason for opposition to division of AP is never talked
about, openly, by "Netas"! Well, its common knowledge that the issue
lies with Hyderabad being in Telengana. TRS or for that matter anyone
else looking for a separate state, is NOT going to agree to division,
without getting Hyderabad.
There has been talk of making Hyderabad a Union Territory. But that
will not be acceptable to TRS at all. Why should it agree? Hyderabad
is Geographically in Telengana, and technically no one should be
objecting to Hyderabad being part of Telengana. But there lies the
crux of the problem.
The AP Politics, Industry, Real Estate and Business are teeming with
big guns from Andhra and to some extent, from Rayalaseema. They have
come to Hyderabad and have invested heavily. They have pulled strings
to ensure big ticket investments into Hyderabad. Their personal
investments have grown into thousands of Crores, covering the entire
business spectrum, not just Real Estate. The investments by Public
Sector Companies, Private Sector and Central Govt organizations runs
into Lakhs of Crores. Due the the heavy investment over the last 25 to
30 years, Hyderabad has become a Metro City which generates
substantial income by way of taxes and levies, which help to run the
entire State of AP. Loss of Hyderabad, will defenitely wipe out HUGE
revenue which otherwise would have accrued to Andhra and Rayalaseema.
This is a very important issue and is at the back of everybody's mind.
Neither TDP nor Congress had stopped facilitating further investments
in Hyderabad, fearing separation. If they need to leave Hyderabad to
Telengana, they have to sit down, take deep breath and make strategic
shifts, in future big ticket investments. For example, consider ORR,
Metro Rail etc. Will congress or TDP be keen push these and all other
projects, if they are sure that TRS is going to enjoy all this, while
they are turned into minority, in the new Telengana State?!
Obviously Congress and TDP will try, to the extreme, to scuttle Separation!
3.0 Possibility of Early Divison - Current Political Equations -
Lets look whether there is any chance for State Division before the
upcoming AP and Union Elections.
Union Govt. can not be expected to prepare and table Bill for
Separation, in Parliament, unless there is a strong request from the
State Govt. As all of us would agree, Congress stands to lose by
creating a separate state. Hence there is no chance that Congress
would recommend to the Union Govt. to go ahead and split the state.
At the Center, Congress is at the mercy of the REDS. CPM has
categorically stated that its absolutely against any split and hence
congress can not push through the case in Parliament, till 2009-10
when next Union elections will be held.
Even if Congress loses 2009 Assembly Elections, in AP, in the interim
period till General Elections, Union Govt. can do little.
In effect, we can conclude that whatever happens in April 2009
Assembly election, no division can happen before Next Union Election.
(But can division happen after Union Election?! …….Read on!!)
4.0 The Political Circus
At State Level, we have 5 interest Groups
-Congress
Officially congress is against division. There may be hue and cry from
local leaders in Telengana including Mr. Satyanarayana and others but
at best, these have to be considered as political posturing to garner
votes from Telengana. By showing off, Congress will be able to take
away undecided votes from the region, which will hurt TRS. This is a
better political strategy than just simply saying, "NO" to Telengana.
Even if some committed individuals from Telengana leave Congress, will
they join TRS? Very unlikely.
We all know that Congress is virtually lead by people from Andhra and
the leaders have huge exposure in Real Estate and Industries in
Hyderabad and would fight to protect such business interest.
-TDP
TDP, like Congress is virtually safe den of Senior Politicians from
Andhra and Rayalaseema. Just like Congress, TDP will be looking to
take away votes from TRS by showing great concern for Telengana! We
have already seen posturing by Mr. D Goud and others from the region
and it should work in TDPs favour, by splitting votes!
TDP Netas have equally large stake in Real Estate / Business /
Industries in Hyderabad and around and will have a heart attack, if
they think of Division!
-TRS
Lets assume that TRS is serious about wanting to have separate
Telengana. But can they get sufficient Majority in the State Elections
to pass the Reorganization Bill?????? CPM will not support them
considering its stated political stand. BJP has stated that they
support Telengana but TRS can not openly touch BJP since it has to
protect its Muslim Community Votes. However, there could be internal
understanding between them.
-BJP
At best BJP can create some itches! Standing alone, they are NOTHING
in AP Politics. But the Great Venkayya Naidu Garu has openly extended
support to Telengana . How come such a strong Andhra Leader is seen
advocating Telengana? This again is simple political arithmetic. It
has been long since BJP did anything significant in AP Elections.
They have to get few seats, by whatever means and if Telengana
sentiment helps, why not?! BJP will offer that they would support TRS
at the Center for pushing Telengana.
But where does BJP stand with regard to Telengana? Like Congress and
TDP, BJP will find it very hard to let go of Hyderabad. The first
person to reverse stand will be none other than Venkayya Garu himself.
We can take it for granted that as far as TRS is concerned, history
will repeat! If Congress let it down in 14th Lok Sabha, BJP will let
it down in the 15th, if, BJP comes to power.
-CPM
CPM can help in splitting TRS votes and hence will be useful to
Congress and TDP. So both will try to vow it. But overall the reds
will not have much say.
5.0 Possibility of Division After Assembly Election & Union Election -
Political Equations
The possibility depends on who wins in AP and at Center. The Division
is possible ONLY if at both Hyderabad and at Center, there are
Governments which support Division.
With Congress or TDP in Hyderabad:
Nothing will happen for another 5 years even if TRS is in Union Govt.
In fact ,TRS may find itself in a corner, with BJP dumping the
division propaganda, after elections.
With TRS in Hyderabad:
Obviously TRS on its own can never form Govt. in AP since it can hope
to get seats only in Telengana. Even if it wins all seats in
Telengana, it still require a major partner to support it in the State
assembly. After elections, there is no chance that Congress or TDP
will support it. Even if they support, obviously they will not agree
for Division. They would rather go for President's Rule!
If TRS gets very good Response from Telengana and Congress and TDP
takes a drubbing there, then in State Assembly, TRS would be a force
and they may create unrest in the State. Now will such an unrest force
TDP or Congress to give-in, at that time and recommend Division in the
State Assembly? …Looks unlikely, unless the movement snowballs into a
bloody revolution and that may take ages.
Based on the above scenarios, division looks improbable even during
the term of 15th Parliament, ie at least Till 2015.
6.0 Separation by Consensus
Separation by consensus will happen only if Andhra and Rayalaseema
asks for splitting and forming 3 states together with Telengana,
instead of objecting to split. But under current circumstances with so
much at stake for politicians in Hyderabad, this is most unlikely.
7.0 Why is there so much of Heat and Dust now?! There is so much of
screaming all around!!
What is going on at the moment (including Netas rushing to Delhi), is
definitely an exercise to excite the voters and prepare them for
elections. While TRS could be genuine in their intentions, others are
all fishing in troubles waters! TRS may get sympathy votes once they
pull out their MPs and MLAs, in March. Others have to jump-in and
create confusion, to prevent TRS from taking away, all publicity and
votes!
8.0 Impact on Real Estate
The above analysis, gives the ground realities with regard to Division
and the improbability till at least 2015. While technically, Division
looks a remote event, the Real Estate market is abuzz with rumors and
general sentiment is down. How will the market behave while all this
"tamasha" goes on? Please wait for "Part B", to be released soon!
From: http://www.exclventures.com/News-telengana-separation-Jan08.asp
