of a populist backlash against his predecessor Naidu, who was
widely seen as overly focused on industrial development to the
exclusion of Andhra Pradesh's vast, and struggling, rural
economy. In the course of the 2004 campaign Reddy made many
promises most notably that farmers would get free power to
operate their irrigation pumps. He has pleased rural voters by
making good on his 2004 promises (ref B), as well as by
instituting welfare programs far beyond what he staked out in
his 2004 campaign.
¶8. (SBU) Interlocutors from a government management institute
told us that Reddy and the Congress government are very popular
because "the programs are really helping people out." One said
"YSR (Reddy) has the pulse of the people," and added that he was
"not a Congressman" but he had to admit that programs like the
government's new health care insurance are actually delivering
tangible benefits to poor citizens. The Arogyashree insurance
program allows poor people to undergo major medical procedures,
such as coronary bypass surgery, at private medical hospitals
with the state government picking up the bill.
¶9. (SBU) A visit to one of Hyderabad's slums confirmed the
reach of the government welfare programs. The slum, located in
an area known as Uppal, consisted of crudely constructed shacks
on a vacant lot abutting a main thoroughfare. Several residents
told us that had either used Arogyashree to obtain treatment for
themselves, or knew of someone who did. One resident said with
pride that she had gone to the Apollo Hospital for treatment
that was paid by Arogyashree. (NOTE: Apollo Hospitals is
India's most prestigious private, for-profit hospital chain.
END NOTE) The residents also told us that they had been offered
homes under Reddy's Indiramma housing initiative but that they
had declined the opportunity due to the fact that the new houses
were in a location far from Uppal.
¶10. (SBU) Political observers repeatedly cited Arogyashree,
along with Reddy's irrigation and housing programs, as key
factors in the upcoming elections. Journalist Lalitha Iyer told
post that "Congress has delivered" on the sops, adding that even
if only 50% of the money is making it to the people, "they are
happy." She said "YSR will promise the world and when he's
delivered it, he'll go and promise the people the stars in the
sky." The editor of Saakshi, a newspaper established by Reddy's
son to combat the perceived pro-TDP bias of Andhra Pradesh's
major Telugu language paper, said that "85% of the poor people
in Andhra Pradesh have been touched by one of the Chief
Minister's sops. He has made it impossible for anyone else to
come and promise more."
¶11. (SBU) Naidu's TDP has responded by trying to do just that
-- outbid the Congress by promising even more to the voters.
Naidu says he will expand on the free power to farmers and
health insurance initiated by the Congress government. His
HYDERABAD 00000040 004.2 OF 007
campaign platform copies the promise of a free color television
to every family in the state that was widely credited with
helping bring the DMK party to power in Tamil Nadu in 2006. But
Naidu has made the biggest splash with a cash transfer scheme
that promises direct payments of $20 - $40 per month to the
state's families depending on income level. Naidu has refuted
criticism of the proposal by citing the success of conditional
cash transfer programs such as Mexico's "Opportunidades" program
in reducing poverty. The question remains whether voters trust
Naidu, who was disdainful of these sorts of programs when he was
Chief Minister, to actually make good on his promise. Iyer told
us that people were skeptical at first, but "they are starting
to believe" that he will implement the program if he comes to
power. Srinivas Reddy, Hyderabad Editor of The Hindu, agreed
that the cash transfer proposal may be winning the TDP votes.
But he noted no one is examining where the money will come from
to pay for the programs.
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