What does Naidu’s past experience say about the use of coalition governments in regional politics?

In the recent legislative elections in Andhra Pradesh, Chandrababu Naidu’s Telugu Desam Party (TDP) came to power with an unprecedented majority, in alliance with Pawan Kalyan’s Jana Sena Party (JSP) and the Bharatiya Janata Party (BJP). The TDP’s victory has revived hopes of the long-pending demand for special economic status for Andhra Pradesh. Given King Naidu’s position in the BJP-led National Democratic Alliance (NDA), which has now formed the Union government, this special status is very likely to be secured. Moreover, it is possible that the TDP’s latest election entry in the parliament also has the potential to address Andhra Pradesh’s crisis of losing its capital. Recent speculation suggests that Amaravati may now return as the state capital.

So what possibilities arise in the context of relations between federal coalition governments and allied regional parties?

Naidu’s previous experience of using parliamentary coalitions for regional economic development could be of great help to Andhra Pradesh in the next few years. His gamble with federal coalition governments (1996, 1997 and 1999) brought immense support to his government’s local development planning in Hyderabad till 2004. The considerable political support received for the development of information technology (IT) and financial industry in Hyderabad under Naidu, from the AB Vajpayee government, is proof that coalition politics is beneficial for state governments, but only when the incumbent party is a numerically strong ally in the federal coalition. Therefore, Naidu’s electoral advantage could significantly help his plans for the development of the capital of Andhra Pradesh (AP).

After Naidu came to power in 2014 as AP Prime Minister, his government took on the responsibility of building a new capital after the state lost Hyderabad in the partition. His government has planned a greenfield city – Amaravati – between the cities of Vijayawada and Guntur. However, the city’s fate was mired in controversy after the TDP lost its seat in the 2019 elections.

The capital of AP

During the 2019 elections, the Naidu government grappled with corruption and caste-based (pro-Kamma) favoritism in land sharing for the capital. Jagan Mohan Reddy’s YSR Congress Party (YSRCP) won in 2019 and immediately abandoned its plan to develop Amaravati as the capital. The Jagan government later announced the division of the capital into three cities – Amaravati as legislative, Kurnool as judicial and Visakhapatnam as bureaucratic. The decision remained unpopular with a large section of the public, fueling an anti-incumbency wave that the TDP alliance capitalized on in the 2024 elections. The YSRCP lost all its 2024 Assembly seats in the erstwhile merged constituencies, which bordered the capital’s Amaravati region.

Jagan’s government not only slowed down the development of Amaravati but also demolished important government complexes like (Conference Hall as People’s Grievance Cell) citing building regulations. Thus, speculative land trading in the area came to a crushing halt and several villages around Amaravati, which contributed to land pooling, indefinitely opposed Jagan’s decision to shift the capital elsewhere.

Though he often touted Visakhapatnam as a viable option, Jagan’s plans for the capital city barely materialized. Completing a full term without contributing anything to the development of the capital has been considered one of the biggest failures of his government.

Since TDP’s last victory, land prices in and around Amaravati have increased manifold in anticipation of the Naidu government resuming capital development in Amaravati. Many believe, and Naidu often reminds people in his speeches, that his past experience in laying the foundation for Hyderabad’s economic revival can be extremely useful in developing the AP capital that has world-class ambitions.

A glance at his role in revitalizing the local economy of Hyderabad may shed light on his ability to leverage coalition politics for economic regionalism. What kind of support has the federal government secured for its local urban growth policies in Hyderabad? What lessons can it offer for our democracy?

Naidu’s role in Hyderabad’s economic revival

Naidu played a key role in reviving Hyderabad’s economy by promoting knowledge-based industries such as IT and finance, among others. During this time, he leveraged his electoral support for the 1999 coalition and sought the support of the Vajpayee government several times to further his political ambitions.

For example, Naidu used Delhi’s federal circles to get a face-to-face meeting with Microsoft co-founder Bill Gates in Delhi, which then led to the creation of the company’s largest development center outside the US in Hyderabad. Vajpayee also agreed to Naidu’s demand to allow the establishment of the Insurance Regulatory and Development Authority (IRDA) headquarters in Hyderabad. Both of these institutions ultimately fueled today’s thriving IT and financial districts in Hyderabad. Vajpeyee even attended the inauguration of the Indian School of Business (ISB) on Naidu’s invitation.

Naidu also offered immense support in setting up ISB for local development of techno-managerial human resources. He also managed to secure federal support for infrastructure development plans like Hyderabad International Airport. Naidu’s TDP was then the BJP’s biggest ally in the coalition government and his position made all the federal support possible.

The impact of majority rule

While previous BJP-led coalitions supported urban policies at the local level, the two-term majority government under Prime Minister Narendra Modi meddled in the Telangana state government’s policy plans for Hyderabad, which required federal support.

In 2012, the Congress-led United Progressive Alliance (UPA) II government had an Information Technology Investment Region (ITIR) project in Hyderabad. ITIR is a designated region with special provisions, such as state-led infrastructure development and tax exemptions, with significant support from the federal government. But then the BJP-led majority government came to power and implemented the ITIR project.

In its second term, the BJP majority government went ahead with the ITIR project in Hyderabad, which angered the Telangana government led by the Bharat Rashtra Samithi (BRS), then known as the Telangana Rashtra Samithi (TRS). The denial of federal support for the development of Phase 2 of the Hyderabad Metro is another notable example. Essentially, the BRS was of no consequence to the BJP in terms of forming a federal government, and thus the majority government had no electoral incentive to offer support for subnational policies for Hyderabad.

The reactions of federal governments to the policy plans of successive state governments in AP and later in Telangana to develop the economy of Hyderabad show that regional state governments led by political parties are treated differently from coalition and majority governments.

While emphasizing the influence of the UPA government, the argument is often made that coalition politics is better for . At the same time, it must be emphasized that coalition politics, whether through the NDA or the UPA, has contributed significantly to the state governments starting to claim Union funds for the autonomous promotion of their cities. In simple terms, coalition federal governments have the potential to achieve better results in facilitating urban development under the leadership of the state governments.

Single-party majorities such as those in 2014 and 2019 may not provide as much space for subnational governments within regional parties to negotiate with the federal government and initiate urban policies for local economic growth. Several national urban policies under the Modi government for a decade (2014-2024), such as the Smart Cities Mission proposed by the Union government, were based on a failure to take into account local social realities in the states.

As an ally of the current NDA coalition, Naidu’s TDP has the upper hand to pull the strings of the federal government and secure support for his subnational policies in general and for the development of Amaravati as the new capital of AP in particular. It can be argued that coalitions are generally good for the current allied regional parties in terms of economic policy. However, since contemporary regional economic planning is dominated by neoliberal growth models focused on cities, Naidu’s experience proves that coalition politics are particularly beneficial for administrators with dreams of “world-class” cities.

Goutham Raj Konda is a researcher in urban and social policy. He can be reached at [email protected].