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ISSN: 0378–4568 UGC Care Group1 Journal

A Study on Outcomes of Economic Dynamics with reference to Telangana
Government Initiatives: A Multivariate Analysis

Shravan Boini1 , Dr. D. Rose Mary2, Dr.Ravi Sankar Kummeta3, Dr.Rajkumar Guntuku4
1
Assistant Professor, Guru Nanak Institutions Technical Campus, Hyderabad, India. Mail:
shravanboini@gmail.com
2
Associate Professor, Guru Nanak Institutions Technical Campus, Hyderabad, India. Mail:
rosemary.dara@gmail.com
3
Associate Professor, Guru Nanak Institutions Technical Campus, Hyderabad, India. Mail:
ivar.shankar@gmail.com
4
Head-HR, OneAgorithm IT solutions pvt ltd, Hyderabad. Mail: rajkumar.guntuku@gmail.com

Abstract
This study discovers the economic dynamics of Telangana, focusing on the effects of industrial growth on
key economic indicators, including Gross State Domestic Product (GSDP), employment, and per capita
income. Spanning from 2014-2015 to 2022-2023, our study offers crucial insights into the state's economic
landscape, with a particular emphasis on policy implications. Employing a wide-ranging selection of
statistical tools, including multivariant regression analysis, correlation analysis and scatter plots, we evaluate
the performance of the Telangana government in attracting investments and promoting employment since its
formation in 2014. Our primary objective is to project the trends, patterns, and relationships among variables,
enlightening the impact of government initiatives on investment and employment generation. These findings
suggest that government policies and initiatives aimed to promote industrial growth, increase per capita
income, and improving employment levels are essential for sustaining Telangana’s economic development.
While industrial growth and per capita income have positive impact on GSDP, while the relationship
between total employment and GSDP is noteworthy to say that the total employment negatively impacting
the state economic growth. The key findings underscore a robust model that extraordinarily aligns with the
data, highlighting the state's impressive economic growth. Telangana's proactive efforts in attracting
investments and supporting infrastructure have projected it to the position of the 9th largest state economy in
India.
Through this evaluation, we aim to contribute to a deeper understanding of Telangana's economic growth,
the impact of government incentives and most significantly, provide actionable recommendations for policy
enhancements.
Key words: Investments, Employments, government etc.

Introduction
The state of Telangana, India, has witnessed a transformative journey in recent years marked by significant
industrial growth and ambitious policy initiatives. These developments have been instrumental in shaping the
state's economic trajectory. This study is dedicated to unravelling the intricate relationship between industrial
expansion and key economic indicators, namely Gross State Domestic Product (GSDP), employment, and
per capita income. Industrial growth is a keystone in the economic development of Telangana. Our study is
designed to elucidate how this growth influences essential economic parameters, with a specific focus on
GSDP, employment, and per capita income.
The Telangana Government's enactment of the "Telangana State Industrial Project Approval and Self-
Certification System (TS-iPASS) Act, 2014" (Act No.3 of 2014) reformed the landscape of industrial
development by streamlining the clearance processes and fostering an investor-friendly climate. This
transformation played a pivotal role in catapulting Telangana to the enviable position of being India's top-

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ranked state for "Ease of Doing Business" in 2016, a testament to the government's untiring commitment to
structural reform.
The journey towards Telangana's robust economic foundation began at the state's inception, with a balanced
approach that combines supply-side policies like TS-iPASS, T-PRIDE, TS-IDEA, TS-GlobalLinker, and
more to boost productivity and output, in conjunction with social welfare schemes aimed at addressing
demand-side requirements. These comprehensive measures have not only supported the state's economy but
also improve the living standards of its citizens. Between 2014-15 and 2022-23, Telangana's contribution to
India's nominal GDP increased from 4.1% to 4.9%, reflecting stable growth. Our investigation highlights the
transformative efforts of the Telangana government to attract investments and stimulate employment since
its inception in 2014. A wealth of data, including the number of industrial units established, corresponding
investments, and the total employment generated, serves as the basis for our analysis. Rigorous statistical
methodologies, focusing on multiple regression analysis, correlation analysis and the Scatter plotting,
uncover trends, relationships, and the efficacy of government initiatives.
The study aims to make a meaningful contribution to the debates on government policies and economic
development by leveraging data and statistical tools. It not only provides a better understanding of
Telangana's economic landscape but also provides actionable recommendations for policymakers to further
enhance their strategies and promote sustainable growth. Through an exploration of trends, relationships, and
outcomes in investments and employment generation, we attempt to offer a comprehensive assessment of the
Telangana government's performance. This study is dedicated to enhancing the broader understanding of
effective economic governance and provide valuable insights into the factors shaping the economic future of
Telangana. Telangana ranked first in per capita income in 2022-23, surpassing all other States in the country,
according to the Ministry of Statistics and Programme Implementation (MoSPI).
Hypothesis
Null Hypothesis: We propose that the selected economic indicators, including the "Number of Industries,"
"Total Investments," "Total Employment," and "Per Capita Income at Current Prices," collectively have a
significant impact on Gross State Domestic Product (GSDP) at Current Prices.
Alternative Hypothesis: Our null hypothesis suggests that all coefficients of the independent variables
within our regression model are equal to zero. In contrast, the alternative hypothesis proposes that at least
one of these coefficients is not equal to zero, indicating a significant influence on GSDP.

Objective of the study

To provide insights into the economic dynamics of Telangana state by utilizing multiple regression analysis
and correlation analysis contributing to a deeper understanding of the relationship between economic
variables and GSDP.

Literature Review
Prathap, T. S., (2019) et al has evaluated the social development in Telangana state with the primary
objective to investigate the state's social development landscape and concluded that Social Development
promotes economic growth and leads to better interventions and a higher quality of life.
Kumar, (2019) et al has. conducted an economic analysis of Telangana's development, emphasizing the roles
of IT, Pharmaceuticals, and Biotechnology in the state's sustainable growth. Telangana's dynamic economy,
buoyed by its thriving IT and services sectors, has witnessed a remarkable shift in its growth trajectory. The
government's forward-thinking policies, such as TS-iPASS, have fostered a business-friendly environment
and spurred the services sector, particularly in IT, ITeS, tourism, real estate, education, and healthcare.
Additionally, the pharmaceuticals and life sciences sectors have experienced substantial growth, further
contributing to the state's economic progress."
Ghosh, A., (2019) et al has analysed The Telangana Model, focusing on IT, Pharmaceuticals, and Bio-
technology, has driven substantial economic growth since 2014. Government initiatives, sector-specific
policies, and double-digit annual growth rates offer valuable insights for other states aiming to boost their
GSDP contributions.

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Shah, R. B., (2021) et al has investigated the historical evolution of Andhra Pradesh since 1953 and the
factors leading to the demand for Telangana's separation. It offers a comparative analysis of socio-economic
and infrastructure development in both regions.
Dr.Pullaiah Cheepi., 2018 has discussed the economic growth and sectoral dynamics in Telangana,
highlighting the expansion and relationships among the primary, secondary, and service sectors. The
emphasis on the service sector's role as an employment generator and contributor to foreign exchange
revenue, along with the impact of new policies and schemes on the industrial sector.
Data Collection and Methodology:
The primary data sources for this study are the Telangana State Industrial Project Approval and Self-
Certification System (TS-iPASS) website (https://ipass.telangana.gov.in/) and the Telangana State Data
Portal (www.tsdps.telangana.gov.in). The data obtained include information on the number of industries,
total investments, employment figures, Gross State Domestic Product (GSDP) at current prices, and per
capita income at current prices for the fiscal years 2014-2015 to 2022-2023.
FINANCIA GSDP Current Number of Total Total Per capital Income at
L YEAR Prices Industries Investments Employment Current Prices
2014-2015 505849 174 1805.80 5051 124104
2015-2016 577902 1526 28954.60 94196 140840
2016-2017 658325 1698 33493.52 95068 159395
2017-2018 750050 2790 57672.91 273407 179358
2018-2019 857427 2786 34298.07 599589 209848
2019-2020 950090 3018 40092.30 315147 231326
2020-2021 941435 3402 16060.90 162848 225687
2021-2022 1112456 4063 18175.86 100262 265942
2022-2023 1293469 3155 26358.22 101014 308732
Source (Table 1): Telangana State Development Planning Society and Telangana State Industrial Project Approval
and Self-Certification System (TS- iPASS)

Our investigation employed three main statistical methods such as Scatter plots, multiple regression
analysis and correlation analysis.

Figure No.1 Figure No.2

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Figure No.3 Figure No.4

The Scatter Plot (Figure No.1) shows the relationship between GSDP (Gross State Domestic Product) and
the Number of Industries. Each point represents a year. As the Number of Industries increases, there seems
to be a positive correlation with GSDP. This suggests that a higher number of industries might contribute to
an increase in GSDP.
The Scatter Plot 2 (Figure 2) proves the relationship between GSDP and Total Investments. The data points
show a potential positive correlation, indicating that higher Total Investments are associated with higher
GSDP. It suggests that increased investments may contribute to economic growth (GSDP).
The (Figure 3) Scatter Plot indicates the relationship between GSDP and Total Employment. The data points
show a positive correlation, indicating that higher Total Employment is associated with higher GSDP. It
suggests that increased employment may lead to economic growth (GSDP).
The Scatter Plot (Figure 4) demonstrates the relationship between GSDP and Per Capita Income at Current
Prices. The data points show a positive correlation, indicating that higher Per Capita Income is associated
with higher GSDP. This suggests that an increase in individual income levels may contribute to economic
growth (GSDP).
For a better understanding the relationship between the GSDP at current prices and various independent
variables, including the number of industries, total investments, total employment, and per capita income at
current prices, we conducted a multiple regression analysis. This statistical method permits us to determine
which variables significantly influence GSDP.
The analysis was performed using Microsoft Excel, with the dependent variable (GSDP) and independent
variables as input. The results include coefficients, p-values and R-squared values that indicate the strength
and significance of the relationships.

SUMMARY OUTPUT
Regression Statistics

Multiple R 0.999867558

R Square 0.999735134

Adjusted R Square 0.999470268

Standard Error 5885.882445

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Observations 9

ANOVA
Significance
df SS MS F
F
2.10425E-
Regression 4 5.23048E+11 1.30762E+11 3774.493832
07
Residual 4 138574448.6 34643612.16

Total 8 5.23187E+11

Standard Upper
Coefficients t Stat P-value Lower 95% Upper 95% Lower 95.0%
Error 95.0%

-
Intercept 9512.888077 -1.822686426 0.142431942 -43751.02351 9072.999565 -43751.02351 9072.999565
17339.01197

Number of
3.847334792 3.762764134 1.022475674 0.364359702 -6.59977327 14.29444286 -6.59977327 14.29444286
Industries

Total
0.157388312 0.164232073 0.958328718 0.39216623 -0.298593023 0.613369646 -0.298593023 0.613369646
Investments

Total -
0.014056516 -2.850090636 0.046391551 -0.079089489 -0.0010352 -0.079089489 -0.0010352
Employment 0.040062344
Per capital
Income at
4.19762684 0.06929893 60.57275074 4.44891E-07 4.005222164 4.390031516 4.005222164 4.390031516
Current
Prices

RESIDUAL OUTPUT
Observation Predicted GSDP Current Prices Residuals

1 504354.5625 1494.437483

2 580509.188 -2607.18805

3 659737.3342 -1412.334238
4 744396.7234 5653.276641

5 855620.4341 1806.565872

6 958977.0025 -8887.002518

7 939103.1549 2331.84515

8 1113461.923 -1005.923456
9 1290842.677 2626.323118

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The multiple regression analysis demonstrates a strong model fit, as indicated by the exceptionally high R-
squared value of 0.999735134. Which means approximately 99.97% of the variation in GSDP can be
enlightened by the selected independent variables, by highlighting the model's effectiveness in explaining the
variations in Gross State Domestic Product. Additionally, the F-statistic, with a significant value of
3774.493832 and an associated p-value of 2.10425E-07, indicating the overall significance of the model.
These results support the robustness of the analysis and its ability to capture the relationships between the
variables.
The coefficients of the independent variables representing the valuable insights into their respective
influences on GSDP. The coefficient of 3.847334792 with a p-value of 0.364359702 suggests a modest
positive impact on GSDP. However, the result is not statistically significant at the 0.05 significance level.
Total Investments with a coefficient of 0.157388312 and a p-value of 0.39216623, this variable shows a
limited effect on GSDP and is not statistically significant.
The coefficient of -0.040062344 with a p-value of 0.046391551 represents a negative relationship between
total employment and GSDP. This relationship is statistically significant, suggesting that a decrease in total
employment is associated with higher GSDP. Per Capita Income at Current Prices, the coefficient of
4.19762684 and an extremely low p-value of 4.44891E-07 proved a highly significant positive influence of
per capita income on GSDP. This is suggesting that an improvement in per capital income has a substantial
positive impact on GSDP.
Along with Multiple regression analysis we conducted correlation analysis to evaluate the relationships
between the economic variables in our dataset. It provides correlation coefficients that shows the strength
and direction of associations.
Correlation analysis was created to represent the correlations between economic variables. This analysis
helps to quickly identify patterns and relationships.

Correlation of Economic Variables

Per capital
GSDP Number of Total Total
Variables Income at
Current Prices Industries Investments Employment
Current Prices
GSDP Current
1
Prices
Number of
0.840530839 1
Industries
Total
0.049087255 0.300056014 1
Investments
Total
0.134819089 0.342888328 0.529681712 1
Employment
Per capital
Income at 0.999591094 0.839134206 0.049485621 0.153516925 1
Current Prices

The correlation matrix provides insights regarding the relationships between various economic variables in
the dataset. There is a strong positive correlation of 0.840530839 between GSDP Current Prices and the
Number of Industries. It shows that as the number of industries increases, GSDP tends to rise, indicating a
positive economic impact.
The correlation between GSDP Current Prices and Total Investments is relatively weak, with a coefficient of
0.049087255. This suggesting that GSDP may not be highly influenced by over-all investments. There is a
moderate positive correlation of 0.134819089 between GSDP of current prices and total employment. This

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indicates that an upward movement in GSDP at current prices is associated with a slight increase in total
employment.
GSDP at Current Prices and Per capita Income at Current Prices have a very strong positive correlation of
0.999591094. It is suggesting that as GSDP increases, per capita income also increases significantly.
The correlation between the Number of Industries and Total Investments is positive but relatively weak
(0.300056014). This indicates a moderate relationship between the two variables. The Number of Industries
and Total Employment have a positive correlation of 0.342888328, suggesting that an increase in the number
of industries is associated with higher total employment.
There is a strong positive correlation 0.839134206 between the Number of Industries and Per capita Income
at Current Prices, it represents that a higher number of industries is associated with higher per capita income.
Total Investments and Total Employment show a moderate positive correlation, with a coefficient of
0.529681712. This suggesting that as investments increase, there tends to be an equivalent increase in total
employment. highlighting the relationship between higher investments and elevated employment levels.
The correlation between Total Investments and Per capita Income at Current Prices is weak 0.049485621,
suggesting a limited impact of investments on per capita income. Total Employment and Per capita Income
at Current Prices have a moderately positive correlation of 0.153516925, indicating that higher total
employment is associated with slightly higher per capita income. The strong positive correlation between the
number of industries and GSDP highlights the importance of continuous efforts to promote industrial growth
in Telangana. Policymakers can consider providing incentives and support to attract more industries to the
state, thereby further boosting economic output.
The study highlights the significant positive impact of per capita income on GSDP. Policymakers should
prioritize policies that increase individual income levels, as this can lead to higher overall economic growth.
Education and skills development programs can play an important role in achieving this goal. While total
investment has exhibited a limited impact on GSDP in the current analysis, it's essential to continuously
evaluate assess and optimize investment strategies. Policymakers should explore ways to attract high-value
investments that contribute significantly to economic growth.
Despite a limited impact on GSDP, employment remains an important socio-economic factor. Policymakers
should consider strategies to promote employment generation in line with the state's development goals.
Ensuring a balanced focus between employment and industrial growth. To mitigate economic risks and
enhance resilience, policymakers can consider diversifying the types of industries existed in Telangana. This
diversification can be guided by an understanding of which industries have the most significant impact on
GSDP.

Findings of the study

The study highlights the remarkable economic growth of Telangana from 2014 to 2023. During this period,
the state's Gross State Domestic Product (GSDP) has consistently shown a positive trend, making Telangana
a 9th largest state economy in India. This growth underscores the state's significant economic development.
Government Initiatives Driving Growth: The transformative policies initiated by the Telangana government,
especially the "Telangana State Industrial Project Approval and Self-Certification System (TS-iPASS) Act,
2014," played a pivotal role in shaping the state's economic landscape. These policies have streamlined
industrial licensing and created an investor-friendly environment, resulting in Telangana being recognized as
the top-ranked state for "Ease of Doing Business" in 2016.
The correlation analysis between economic variables and GSDP revealed key relationships. The positive
correlation coefficient of 0.840530839 between GSDP and the Number of Industries demonstrates the
significant impact of industrial growth on GSDP. As the number of industries increased, so did GSDP,
thereby reinforcing the state's emphasis on industrial expansion.
The study found a storng positive correlation (0.999591094) between GSDP and Per Capita Income at
Current Prices. This indicates that as GSDP increases, per capita income also increases. Telangana's growth
has not only improved its economy but also improved the living standards of its citizens.

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The study identified a positive correlation 0.134819089 between GSDP and Total Employment, suggesting
that GSDP growth is associated with increased employment. However, the regression analysis shows a more
nuanced relationship, with a negative coefficient, indicating a possible reduction in GSDP when employment
decreases.
The multiple regression analysis, with an exceptionally high R-squared value of 0.999735134, demonstrates
that nearly 99.97% of the variation in GSDP can be explained by the selected independent variables. The F-
statistic highlights the overall significance of the model, with a p-value of 2.10425E-07, indicating an
extremely strong model fit. These findings suggest that government policies and initiatives aimed to promote
industrial growth, increase per capita income, and improving employment levels are essential for sustaining
Telangana's economic development. While industrial growth and per capita income have positive impact on
GSDP, policymakers should also address the potential negative impact of reduced employment on GSDP.

Conclusion
In the dynamic landscape of Telangana's economic journey, this study delves into the complex web of factors
that shape its growth and prosperity. Over the years, Telangana has emerged as a remarkable success story,
ranking 9th among largest state in India, with a projected GSDP of ₹14 Lakh Crore for the fiscal year 2023-
24. The state's Per Capita Net State Domestic Product reached an impressive ₹3.08 Lakh in the fiscal year
2022-23, reflecting an improved standard of living for its citizens. The comprehensive analysis, using
statistical tools such as multiple regression and correlation analysis, highlights the important role of industry
volume and per capita income in divining growth of GSDP. Telangana's economic policies and proactive
measures have resulted in strong industrial growth, attracting investments, and generating employment
opportunities. However, it should be noted that although total investment has a limited influence on GSDP,
the relationship between total employment and GSDP is noteworthy, with total employment negatively
impacting the state's economic growth. While our study provides valuable insights into Telangana's
economic dynamics, it is essential to recognize its limitations, which stem from available data and
assumptions made. The complexity of the actual real-world economic environment may involve unaccounted
for variables that may affect the outcomes differently.
Despite these limitations, the findings of this research can serve as a valuable source of information for
policymakers, businesses and stakeholders in Telangana. They emphasized the success of government
initiatives and the need for a balanced approach to industrial and economic development. As the state
continues to grow and develop, this information will provide a roadmap for policy enhancements to ensure
the sustainable economic growth of the state.

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