The state bifurcation process is almost complete and the after effects of the division are being estimated or calculated. Experts on both sides are vying the pros and cons in the division. Experts feel that the Special status issued to Residual Andhra Pradesh may spell doom to Telangana. Due to the tax incentives and other allowances given in the region, the manufacturing costs will decrease and goods will become cheaper in Seemandhra region. As a result, Smuggling becomes rampant in Telangana to evade taxes. This will lead to decrease in revenue income in Telangana state.
For example, a Television set costing 10000 will have 1200-1400 Excise Tax and remaining central taxes will add up to 2000 Rupees. Due to the tax exemption, the TV set will cost 8000 in Seemandhra and 10000 in Telangana. People will go across the border and buy to save the extra bucks resulting in a loss to Telangana state. And what is more dreadful is dealers of Telangana will bribe the Police and smuggle these goods to Telangana and evade taxes here. This will result in a huge loss.
Also the tax benefits will encourage existing industries to move to Seemandhra. Even the new industries will have more convenience in Seemandhra than Telangana due to surplus power and water. As industries move, people coming to Telangana from Seemandhra will also decrease and slowly it will bring down the real estate prices in Telangana.
