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DE RUEHCG #0028/01 0251047
ZNR UUUUU ZZH
R 251047Z JAN 08
FM AMCONSUL CHENNAI
TO RUEHC/SECSTATE WASHDC 1434
INFO RUEHCG/ALL SOUTH AND CENTRAL ASIA COLLECTIVE

UNCLAS CHENNAI 000028 
 
SIPDIS 
 
SENSITIVE 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: PGOV KDEM ECON PREL IN
SUBJECT: SEPARATIST SENTIMENT PUTS ANDHRA PRADESH'S MAJOR PARTIES ON 
DEFENSIVE 
 
 
¶1. (SBU) SUMMARY:  Demands for separate statehood for Andhra 
Pradesh's Telangana region have set the state's politics on edge 
again.  The historically underdeveloped region has long harbored 
separatist demands, which in 2001 led to a split in the state's 
major regional political player, the Telugu Desam Party (TDP). 
After joining with the TDP spin-off in the 2004 election by 
promising to consider separate statehood for Telangana, the ruling 
Congress party is now mishandling the issue.  At the same time, TDP 
is facing dissension in the ranks on the Telangana question.  Though 
it is uncertain which group will ultimately benefit, the issue of 
Telangana statehood will no doubt be an important factor in the 2009 
state and national elections in Andhra Pradesh.  END SUMMARY. 
 
TELANGANA'S HISTORY OF DISAPPOINTMENT 
------------------------------------- 
 
¶2. (U) The Telangana region is composed of the ten northern 
districts of Andhra Pradesh, including the capital Hyderabad. 
Merged into the state of Andhra Pradesh in 1956, Telangana has long 
harbored demands for separate statehood (with Hyderabad as its 
capital).  These demands, in large part based on the fact that the 
region lags behind the rest of the state in terms of economic 
development, have long been a major factor in Andhra Pradesh 
politics.  In the 1990s, the Bharatiya Janata Party (BJP) promised 
separate statehood to Telangana but was unable to deliver due to 
opposition by the BJP's coalition partner Telugu Desam Party (TDP). 
In 2001, angry that his party blocked separate statehood, K. 
Chandrashekhar Rao quit the TDP to form the Telangana Rashtra 
Samithi (TRS) with the aim of achieving separate statehood for the 
region.  The TRS joined the Congress-led United Progressive Alliance 
(UPA) in the 2004 elections and in return the UPA's Common Minimum 
Program committed the government to "consider the demand for 
formation of a Telangana state at an appropriate time after due 
consultations and consensus."  But the TRS withdrew from the UPA in 
2006 in frustration with the government's lack of progress towards 
independent statehood for Telangana. 
 
CONGRESS STUMBLES 
----------------- 
 
¶3. (U) The leadership of Andhra Pradesh's ruling Congress party has 
recently struggled with the Telangana issue.  On January 9 Veerappa 
Moily, General Secretary of the All India Congress Committee who 
also bears responsibility for Andhra Pradesh, said that the central 
government was "seriously considering" constituting a second States 
Reorganization Committee ("SRC") to address the demand for a 
separate Telangana.  Congress leaders from the Telangana region, who 
support separate statehood, were dismayed.   They worry that 
referral of the issue to a second SRC would be seen as dooming a 
separate Telangana to death by committee, thus giving an edge to the 
TRS. 
 
¶4. (U) The turmoil in the Andhra Pradesh Congress went all the way 
to the top.  Chief Minister Y.S.R. Reddy, who hails from the Andhra 
region and is believed to be unsympathetic to Telangana statehood, 
has given mixed signals.  Returning from a meeting with Congress 
party leader Sonia Gandhi, Reddy reportedly instructed Congress 
members to refrain from airing their opinions on Telangana and the 
second SRC.  Days later Reddy gave an interview in which he was 
quoted as saying Congress could not take action on separate 
statehood for Telangana in the absence of an absolute majority in 
India's Parliament, thus implying that the issue would be held in 
abeyance until after the 2009 elections.  The Chief Minister's 
comments upset pro-Telangana Congress leaders.  G. Venkataswamy, a 
senior Congress leader elected from Telangana, called on the people 
of Telangana to agitate for separate statehood now that Reddy "had 
exposed his true feelings" against statehood.  Telangana Congress 
leaders even warned industry against purchasing land around 
Hyderabad, saying that a post-separation government would review 
such transactions. 
 
OPPOSITION TDP ALSO STRUGLES 
----------------------------- 
 
¶4. (SBU) Andhra Pradesh's chief opposition party also is struggling 
with Telangana.  The TDP, led by former Chief Minister Chandrababu 
Naidu, consistently has stood against a separate Telangana.  But 
while Congress was wracked with internal dissension, TDP also saw 
cracks develop in its once firm position.  On January 13 T. Devender 
Goud, a former Andhra Pradesh Home Minister and Naidu confidant who 
is from Telangana, publicly urged the party to reconsider its stance 
against Telangana statehood.  Goud reportedly said that the people 
had rejected the TDP's call for a united Andhra Pradesh in the last 
elections and added "it is time the party reviewed" its stance on 
the matter.  With the media focus shifting from the Congress 
infighting to the TDP dissension, Naidu quickly moved to downplay 
the matter.  After a very public meeting with Goud, Naidu told the 
press that "an appropriate action would be taken at the appropriate 
time."   Former Industries Minister Vidhyadhar Rao told us that the 
TDP still stood for a "united Andhra."  But Rao added that the TDP, 
 
as a regional party, would have "no choice" if India's central 
government chose separate statehood. 
 
CONFUSION REIGNS 
----------------- 
 
¶5. (SBU) Media contacts tell us that the reemergence of the 
Telangana has both Congress and TDP on edge.  Congress is caught 
between the differing priorities of the national and state parties. 
Our contacts say that YSR Reddy, from the coastal Andhra region of 
the state, has achieved his "lifetime ambition" of being Chief 
Minister and "does not want to go down in history" as the leader who 
permitted the division of Andhra Pradesh.  Reddy's position is 
strong:  he is the only Congress leader in the state with the 
stature to take on TDP.  The remaining state Congress leaders are 
either octogenarians like Venkataswamy (who confronted Reddy on 
Telangana) or youngsters, all of whom lack the profile to compete 
with Naidu. 
 
¶6. (SBU) The national Congress party may be more favorably disposed 
towards granting separate statehood because they feel they could 
pick up more seats in a grateful Telangana state than they would 
lose in what would remain of Andhra Pradesh.  Our media contacts 
there say that with the state's elections in 2009 there is plenty of 
time for Congress to work through the Telangana issue.  Ultimately, 
"it will depend on how desperate Sonia Gandhi is" to pick up more 
seats in Parliament.  A Congress Member of the Legislative Assembly 
told us that if the party does not offer separate statehood, it will 
at least "offer a package" of special incentives to Telangana before 
the next election. 
 
¶7. (SBU) TRS is, of course, quite pleased to have its cornerstone 
issue squarely in the public's mind.  But the party is opposed to 
referring the issue to a second SRC for fear that a second SRC will 
only result in further delays.  TRS founder K. Chandrashekhar Rao 
has threatened that his party members will resign from the state and 
national legislatures en masse if there is no decision on separate 
statehood by March 6.  But our media contacts say with only five 
Members of Parliament at the center and sixteen Members of the 
Andhra Pradesh Legislative Assembly, TRS has no leverage.  Naidu and 
the TDP are the worst off since they are unequivocally opposed to 
Telangana statehood.  TDP's biggest priority is quelling the 
concerns of its Telangana-based officials like Goud, who some have 
suggested might split away from the TDP. 
 
¶8.  (SBU) COMMENT:  Andhra Pradesh sends the fifth largest number of 
members to the Indian Parliament, with UPA partners and the TRS 
currently controlling 36 of the Andhra Pradesh's 42 seats in the 
lower house.  The UPA will likely need to keep hold of a substantial 
number of the Andhra Pradesh seats to remain in power in Delhi, a 
tall order for a government that is an incumbent in both the state 
and the center.  It would be doubly difficult to remain competitive 
if the Congress does not carefully manage the question of Telangana 
statehood and the TRS, which will no doubt continue to try to exert 
pressure.  Recent intra-Congress squabbling about Telangana does not 
bode well for the party's chances.  Congress's saving grace is that 
its main opposition in the state -- the TDP -- is even worse off on 
Telangana.  END COMMENT. 
 
¶9.  (U) This message was coordinated with Embassy New Delhi. 
 
HOPPER