Telangana’s 12-year growth story faces headwinds

Immediately after the formation of separate Telangana, the State faced one of the worst spells of drought in recent memory. The area under cultivation dipped, the foodgrain and cereal production fell to a low. The agriculture and allied sector recorded a negative growth of -1.1%. Agriculture crops recorded a negative growth of -13/3%. In 2014, the average rainfall was 68.2 cm, in 2015 it was 68.9 cm as against the normal of 90.5 cm.

It was after these two challenging years that Telangana has soared like the mythical phoenix to create a success story that is ongoing but is also facing headwinds. 

A dozen years is a very short time to judge the progress of a State. But when the creation of the state was in the works for decades and was born on June 2, 2014, then the evaluation is much in order. In these 12 years, data culled from various sources shows how Telangana has leapfrogged in economic and infrastructure indices but is facing challenges in the social and health sector.

From the drought year of 2014-15 where foodgrain production was 10.69 lakh metric tonnes to 236.87 lakh metric tonnes is just one aspect of it. The irrigated area too has gone up from 62.46 lakh acres to  74.51 lakh acres. 

However, the Telangana growth story has been powered by services sector and not by agriculture sector whose contribution has dropped to 18% of Gross State Value Added (GSVA) which measures the value of goods and services in the State. Services sector contributed 61.3%.  At the time of the formation of the State, 26.6% were employed in the services sector. Now the number is 33%.

This services sector growth has led to a jump in per capita income of the State, albeit with huge disparities between districts closer to the capital and those away from it.  The most dramatic growth is in the per capita income which has jumped 171% from ₹ 1,24,104 in 2014 to ₹3,36,898 in 2025. But this has not translated into higher investment in education. The result, the total number of government schools have gone up marginally from 29,427 to 30,057. This, at a time when the total number of students has gone up 13.4% from 65,73,100 to 74,57,851.

The maternal mortality rate has dropped from 88 in 2014-15 to 43 in 2025, and the infant mortality has dropped from 34 in 2014-15 to 18 in 2025. This comes on the back of an increase in healthcare spending from ₹4519.56 crore in 2015 to ₹12,393 crore in 2025.

This growth story from the lean years of drought to one of the highest foodgrain producing State has not been easy. From a mostly agricultural State to a services sector power State the change is ongoing. But the growth story of Telangana is likely to face headwinds as AI is embraced by businesses across the board, which may impact the services sector. And then, the same old bugaboo of Indian monsoon that is lurking around the corner again: El Nino.