August 26, 2013

Central institutions in Hyderabad & the "presidential order"

I am interrupting my blog series on river waters, irrigation & agriculture to investigate the link between the presidential order and central institutions in Hyderabad.


Satya, a prominent commenter at Nalamotu Chakravarthy's blog, and I had exchanged a few points about the development of Hyderabad. One of these relates to the role the presidential order had on the development of Hyderabad.

The relevant excerpts are produced below:

satya says:
August 24, 2013 at 7:38 am

Hyderabad getting attention is not only  based on logical model, it is even attested by Presidential order

Jai Gottimukkala says:
August 24, 2013 at 8:12 am

I will be surprised if presidential order reference to Hyderabad can be demonstrated

satya says:
August 24, 2013 at 3:51 pm

Presidential Order
Programme in the State Plan to develop  the infrastructure of the State will benefit the capital city. Other schemes intended specifically for urban development, housing, water supply, expansion of educational and medical facilities etc., also from part of the State Plan. The formula contemplates that special assistance from the Centre to supplement these programmes would also be available. As the formula emphasised the importance of the planned development of the capital city,  Government may also consider the constitution of a suitable Capital Development Authority.”
As per the guidelines of PO, HUDA is formed on 2nd oct 1975”

(Emphasis original: Jai)


The sequence of events leading to the anti-Mulki (aka Jai Andhra agitation) is briefly outlined below:

·         The supreme court case Director Of Industries v. V. Venkata Reddy & Ors was decided on October 3, 1972. Chief Justice Sarv Mittra Sikri delivered a unanimous decision on behalf of the six member full bench of the apex court.
·         The honorable court held Mulki rules continued to be valid not withstanding the striking down of section 3 of Public Employment (Requirement as to Residence) Act, 1957 (Act 44 of 1957).
·         Interpreting the legislative intent behind the 1957 Act, the learned judge held if section 3 was struck down, so would section 2. Justice Sikri wrote: "In, our view it is clear that Parliament would not have enacted S. 2 without s.3 as far as Telangana is concerned".
·         The net effect was the reinstatement of the Mulki rules with retrospective effect
·         As Telangana was ruled to be out of the ambit of the 1957 Act, the judgment also effectively abolished the fifteen year time limit set in the Act.

This judgment provoked a widespread agitation in the Andhra & Rayalaseema districts. The political leadership of the two regions, with a few rare exceptions, threw their hats in the ring and led the agitation from the front. While a full discussion of the agitation is unwarranted at this time, it is sufficient to acknowledge the violence unleashed by the agitation wreaked great havoc.

The central government imposed president's rule on January 10, 1973. Indira Gandhi initiated measures to restore law and order and simultaneously tried to broker a solution to the vexed problem. The president's rule was lifted on December 10, 1973 after eleven months of strife.

The "solution" as worked out took the following route:

·         A so called six point formula (SPF) enunciated by Congressmen across the regions through a statement on September 21, 1973
·         Clarifications issued by Congressmen across the regions through a statement on October 22, 1973
·         Passing of the Constitution (Thirty-Second Amendment) Act, 1973
·         Insertion of new articles 371 D and 371 E as enabled by the thirty second amendment
·         Issuance of the Andhra Pradesh Public Employment, (Organization of Local Cadres and Regulation of Direct Recruitment) Order, 1975 (aka G.S.R. 524 (E)) on October 18, 1975 as enabled by article 371 D.
·         Establishment of Hyderabad Central University (HCU) as enabled by article 371 E


The statement of September 21, 1973 outlines the six principles (points) agreed upon:

·         Point 1 stresses accelerated development of the backward areas and planned development of the capital with specific resources earmarked for these purposes. The point inter alia calls for association of backward area representatives and suitable experts in formulating & monitoring backward area development. The point does not mention any such mechanism for the development of the capital.
·         Point 2 relates to the establishment of HCU and preference to local candidates in educational institutions
·         Point 3 relates to preference to local candidates in direct recruitment of state government employees other than specifically stated exemptions
·         Point 4 calls for the constitution of a high power administrative tribunal to deal with the grievances of services regarding appointments, seniority, promotion and other allied matters
·         Point 5 calls for a constitution amendment to ensure the above principles can be implemented without giving rise to unnecessary litigation
·         Point 6 is quoted in full: "The above approach would render the continuance of Mulki Rules and Regional Committee unnecessary"

The statement concludes with the remark: "We are convinced that the accelerated development of the backward areas and planned development of the State capital are the major factors which will help in successfully implementing the above principles, We would, therefore, urge upon the Central Government to take a generous view in the matter of financial assistance to the State for the development of these areas".

SPF clarifications

The statement of October 22, 1973 provides further clarifications on the six point formula. This statement has eleven paragraphs:

·         Paragraph 1 highlights the basic approach of SPF: "The formula was intended to indicate the basic approach to promote the accelerated development of backward areas, a balanced development of the State as a whole and to provide equitable opportunities to different areas of State in the matter of education, employment and career prospects in public services, with a view achieve a fuller emotional integration of the people of Andhra Pradesh".
·         Paragraph 2 emphasizes the accelerated development of backward areas. The statement leaves the task of identifying the backward areas to the popular government
·         Paragraphs 3, 4 & 6 delves into the modalities of the development of backward areas
·         Paragraph 5 is quoted in full: "Programme in the State Plan to develop the infrastructure of the State will benefit the capital city. Other schemes intended specifically for urban development, housing, water supply, expansion of educational and medical facilities etc., also from part of the State Plan. The formula contemplates that special assistance from the Centre to supplement these programmes would also be available. As the formula emphasised the importance of the planned development of the capital city, Government may also consider the constitution of a suitable Capital Development Authority".
·         Paragraphs 7 through 10 delve at some length into the definition of local candidate, preference mechanisms and related mechanisms.
·         Paragraph 11 reiterated: "We are satisfied that the six-point formula provide all the necessary policy directives for comprehensive detailed schemes to be drawn up and implemented in due course. The association of the Central Government in the implementation of the six-point formula will make available to the State Government the necessary expertise and national guidance. As soon as a popular Government is restored in Andhra Pradesh the stage would be set for the State and the Centre to take upon themselves without any delay the implementation of the formula".

Thirty Second Amendment

The statement of objects & reasons traces the history leading to the SPF evolution. It inter alia reads: "This  Bill  has  been brought forward to  provide  the  necessary constitutional authority for giving effect to the Six-Point Formula in so  far as it relates to the provision of equitable opportunities  for people  of different areas of the State in the matter of admission  to educational  institutions and public employment and constitution of an Administrative  Tribunal  with  jurisdiction  to  deal  with    certain disputes  and  grievances relating to public services.  The Bill  also seeks  to  empower Parliament to legislate for establishing a  Central University  in the State and contains provisions of an incidental  and consequential  nature  including the provision for the  validation  of certain  appointments  made  in the past.  As  the   Six-Point  Formula provides  for the discontinuance of the Regional Committee constituted under  clause  (1) of article 371 of the Constitution, the  Bill  also provides for the repeal of that clause".

It is pertinent to note development of the capital is not mentioned anywhere in the statement of objects & reasons. The fact that this matter is not covered in the amendment therefore comes as no surprise.

Presidential order

The order has 7 sections.

·         Sections 1 & 2 relate to title, commencement & definitions
·         Section 3 requires the state government to organize local cadres
·         Sections 4 & 5 relates to the allocation of individual employees to the local cadres and the associated transfers
·         Section 6 delves into local areas
·         Section 7 goes into a good amount of detail on local candidates

The presidential order is authorized by article 371 D that in turn was inserted by the thirty second amendment. The order therefore is as silent about the capital development as the amendment, its source of authority.

Initial reaction

The following conclusions may be drawn based on the above:

·         SPF # 1 related to the accelerated development of backward areas as well as planned development of the capital.
·         Paragraphs 1 through 4 of the October 1973 clarification statement relate to the first leg of SPF # 1 i.e. accelerated development of backward areas
·         Paragraph 5 of clarification statement relates to the second leg i.e. planned development of the capital
·         None of the other five SPF points or the clarification statement paragraphs relate to the development of either backward areas or the capital

Satya in effect quotes paragraph 5 of the October 1973, not the presidential order. Dismissing his contention on this technical ground is, however, unreasonable and frivolous.

Further examination

It is clear SPF # 1 did not receive any legislative support unlike the other five points that were acted upon. This may be because it was believed this principle could be established through executive action.

I am also unable to find any evidence of mechanisms to implement SPF # 1. Schemes as well as Capital Development Authority referred by clarification # 5 do not appear to have taken off. This may however not be a deterrent if executive action is adequate to implement the principle.

As SPF 2-6 are outside the present debate, I decided to ignore the following questions:

·         Were SPF 2-5 effectively implemented?
·         If yes, did they achieve the intended objective?
·         Do the results justify the scrapping of Mulki rules & regional committees as per SPF 6?
·         Will Telangana formation invalidate article 371 D in so far as it pertains to the new state?
·         If it does, are Mulki rules reinstated as on the appointed date?

I am also not concerned about the benefit if any received through SPF # 1. It is probable that the first (and arguably more important) leg of SPF # 1 was never implemented earnestly. I limit myself to the implementation, if any, of the second leg i.e. development of the capital.

I spent time looking up the central institutions located in and around Hyderabad. The results sorted by the starting date (or the date of shifting to Hyderabad) are as follows:

·         Praga Tools (1943)
·         NPA (1956)
·         NIN (1958)
·         DLRL (1961)
·         DRDL (1962)
·         BHEL (1963)
·         DMRL (1963)
·         HMT (1965)
·         HAL (1965)
·         ECIL (1967)
·         IDPL (1967)
·         NFC (1971)
·         Dundigul AFA (1971)
·         HCL (1972)
·         NRSC (1974)
·         CCMB (1977)
·         CMC (1982)
·         RCI (1985)
·         BEL (1986)


The presidential ordinance is dated 1975. However as our frame of reference is the statement of September 21, 1973, it is a good idea to treat 1974 as the cut-off date.

The first 14 institutions were started on or before 1972. They are therefore related to SPF # 1.

The next three (HCL, NRSC & CCMB) look to be based on SPF # 1.

I am not too sure about CMC (1982). Computers were still a novelty back then. CMC has since been privatized.

I strongly suspect RCI was setup as a logical consequence to the establishment of three other DRDO laboratories. The same may apply to the BEL vs. ECIL situation. In any case, the license-quota raj was slowly coming to an end.

I did not include HCU (1974) above as it clearly falls under SPF # 2. I also excluded Ordnance Factory (1984) as I deem it to be a result of Indira Gandhi's Medak election promises.

What do the results show? Three (or perhaps four if you include CMC) of the central establishments in and around Hyderabad can be linked to the SPF # 1. The others constituting the vast majority are clearly unrelated.

Did the others come to Hyderabad because it was the capital? I do not believe so. In any case, these are outside the scope of this post.

Did I miss any others? Please let me know if I did and I will gladly reassess.


  1. What is your source for the start date

    1. This comment has been removed by the author.

    2. All my sources are in the public domain. Two sources are "unreliable". The first 14 (pre-SPF) are all from reliable sources.

      Please let me know if you can't find any particular date. I will fill the gap if required.

    3. iict -1944 , recently celebrated diamond jublee

    4. Anon, thanks a lot for the info. Yes, you are correct. In fact, this is pre-independence.

  2. As far as I know reasons for these central govt establishments in hyderabad are:

    1. Hyderabad is strategically located: far from coasts and far from neighboring country boarders. considered to be safe.

    2. During Nizam's time nizam kept lot of lands surrounding Hyderabad with govt as surfekas lands. After Nizam these lands came under Hyderabad state govt and later Andhra Pradesh govt. These lands were readily available for establishing these institutes.

    There is no relation between these institutes and hyderabad being capital of AP. Even if Hyderabad is capital of Telangana state for all these days these institutes would have been here. Even if Andhra remained separate, karnool or any other cities would not get these institutes as they are much smaller cities and not strategically located.

    1. @Viswaroop: There are more reasons but I agree to the two you mention. This is what led to my debate with Satya.

      I took the stand that Hyderabad attracted investments due to several natural advantages. On top of this, the prevailing security environment (with four wars) meant defense/heavy engineering facilities should be "beyond enemy reach". Satya then pulled out the "presidential order" argument.

      As it turns out, the impact of SPF on Hyderabad's central institutions landscape is not high.

  3. isi hyd - 1974 iict -1944 ngri-1954

    1. ISI was started in 1974, thanks for the info.

      I will add it to the SPF beneficiary list.

      "What do the results show? *Four* (or perhaps *five* if you include CMC) of the central establishments in and around Hyderabad can be linked to the SPF # 1. The others constituting the vast majority are clearly unrelated.

      NGRI was started in 1961, not 1954. In any case, it is much before anti-Mulki agitation.

  4. Hi Mr.Jai,

    It is interesting analysis with point of reference being 1974 and trying to prove that Capital development has got nothing to do with SPF1. In my opinion, a major factor in the development of Hyderabad in terms of Government / PSU / Private sector / Educational institutions .. (almost all exclusively setup in & around Hyderabad), is due to another factor, which is, 'Middle / upper class mentality' of settling down in a city atmosphere rather than a remote area! Since the Bureaucrats (who are responsible for driving down the decision(s) to establish these facilities), are typically from this class, Hyderabad has gained.

    A very recent example to support the above point: Out of 8 recent IITs that were setup in the country, only IIT Hyderabad & Gandhinagar have near normal number of faculty members .. others are still in pitiable state of affairs in this aspect.

    I strongly feel that, lack of 'planned' all-round and wholistic development across the state is one of the main cause of the current situation.

    1. I agree this is one more point in favor of large cities like Hyderabad. Most city dwellers (e.g. IIT teachers) don't want to move to smaller towns. This is quite natural.

      I disagree with you when you say Hyderabad has "gained". Rather it is those who moved to Hyderabad that have gained.

      Arguing for "all round" development is like fighting with nature.

      People say Babu developed Hyderabad by inviting software giants. Would he have "succeeded" if he had pitched for Kakinada instead? The answer is clearly no.

      The same goes for central establishments. There was no way any of these would have gone to tier 2 cities & smaller towns. Hyderabad would have got some or most of these even if the state did not lobby with the central government.

      Remember Vizag got the ship yard, ENC, BHPV etc. There are strong natural reasons why these came to the city.

      Holistic development: fully agree. This is possible only if an area's intrinsic advantages are built into the plan.

  5. Agree that, those who moved to Hyderabad have gained .. so is Hyderabad! Dr. A.S. Rao, could have influenced to start ECIL in Vizag / Kakinada or in Warangal. But he preferred Hyderabad over these places.

    Who knows, IT could have developed in Kakinada .. may be somewhat similar to that of Pune, if not of Hyderabad scale.

    Holistic development is possible, but our leaders did not strive for it! We can take example from Tamil Nadu ..

    My point is that, the lopsided planning (and execution) by AP leaders, resulted in concentration of these institutions in and around Hyderabad, resulting in current logjam. In my opinion, it will be extremely challenging to find amicable solution to overcome the same.

    1. I disagree regarding Mr. AS Rao. An eminent leader like him would not be motivated by narrow considerations like "my town", "my state", "my language" etc. I think he preferred Hyderabad considering the best interests of the country.

      Even if AS Rao suggested Kakinada as some people claim, would the central government agree? No chance.

      Remember ECIL is an offshoot of BARC and a part of DAE.

      I disagree Hyderabad grew because of political leadership. Hyderabad would have grown with or without the politicians. Hyderabad was always competing with Bangalore & Pune, not Kakinada, Vijayawada Guntur etc.

      I will revert later on the TN link.

    2. I went through the slick TN presentation. At a first glance, this is not too different from AP's pitch to investors. I am unable to comprehend any major differences.

  6. I said, Dr. A.S. Rao could have influenced. I know that he was not parochial.

    I had given the link of TN presentation, to highlight the diversification of industrial base in that state (Chennai, Salem, Madurai, Coiambatore, Tripur, Kanchipuram etc); same is the case with Maharashtra.. where as, we can see the contrast in AP. Only Hyderabad (and partly Vizag), have such a base!


    I strongly feel that our leadership is responsible for this lopsided planning and the consequent challenge(s) we are facing.

    Sorry about extending this discussion (this will be my last response)

    1. No need to say sorry. I welcome your comments.

      I agree TN has a well distributed industrial base. However, this is because of historic reasons, not because of the state's planning.

      Coimbatore & Madurai were well developed even before 1953. Coimbatore in particular has leveraged its access to Kerala & Karnataka as well as its unique multi-cultural (Tamil, Malayalam & Telugu) environment.

      Kanchi has the advantage of being very close to Madras. Salem, Erode & the Sriperambadur belt are strategically located between Madras & Bangalore. Anantapur, Chittoor, Nellore & Tirupati could not leverage on the same because of the Tamil/Kannada culture of these towns collapsed after 1956.

      Karur, Tirupur (or Sivakasi for that matter) have peculiar reasons unrelated to the Govt.

    2. Coimbatore developed because of migrated Kammas, not because of others.

    3. Coimbatore developed due to historical reasons, not due to state planning or lack thereof. I guess you are saying the same thing.

    4. You didn't lie but you hide the truth or half truth coz you don't want to give credit to Kammas.

      Samething with Hyderabad. It was developed by Andhras not Marwaris, Gujjus, marathas or Bengalis. It was Andhras who changed the destiny of Hyderabad from a sleepy, lazy, conservative city to a Vibrant Global Hitech city, Medical/Healthcare city and Pharma and entertainment city. If you don't agree then please talk to Owaisi,

    5. Anon:

      Your bigoted stereotyping & arrogance aside, your comment also violates my commenting policy.

      "All other comments should be relevant to the subject of the post".

    6. Anon above, some prominent kammas who developed Hyd

      GVK Reddy, Subbarami Reddy, Anji Reddy, BVR Mohan Reddy
      Nagarjuna Raju, Satyam Raju
      Pennar Rao

      U guys suffering from yellow fever LOL.

    7. No caste wars on my blog please.

      If you guys want to flaunt your bigotry, please do so elsewhere.



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