Historically the development of modern Andhra in terms of growth started with advent of major irrigation in Krishna and Godavari areas during the mid nineteenth century. The construction of major irrigation dams on the Krishna and Godavari rivers had greatly influenced the socio-economic conditions of coastal Andhra region. Particularly, agriculture became remunerative for peasant castes. They began intensive cultivation of rice and cash crops like cotton, sugarcane and tobacco for growing market. The rise in agricultural production transformed the stagnant economy into market economy. At the societal level, this growth process in agriculture led to emergence of the middle class from upper castes.
The benefits of the growth process in agriculture did not reach the poor. But the numbers of agricultural labourers expanded, with no improvements in their living conditions. A comparison of wage rates prior to irrigation development with post irrigation indicates an increase in money wage that got neutralised by an increase in the prices of food grains. As G. N. Rao points out, during the years 1850 to 1890, the agricultural growth and absence of any improvement in the condition of the agricultural labourers had gone hand in hand.
Since there was limitation for profit earning in agriculture, the most populous cultivating and landowning castes entered into the agro – based industries like rice mills, tobacco grading and sugar mills. Thus by the early 20th century a new stratum of rich peasants had emerged in the deltas that rapidly developed into an entrepreneurial commercial farmer – capitalist class. This class consists of Kamma, Reddy and Kapu castes of the coastal region. In addition to agricultural growth, there were other changes in the late 19th and early 20th centuries that contributed to the development of this class. These are the rural- urban migration, the spread of education and the development of caste consciousness. This is evident from the social and political reforms in the pre-colonial Andhra, which were dominated by the dominant castes.
This class, which got early education and benefited from agricultural growth, also sought to organise itself against feudal lords. The active participation came from the affluent districts of Krishna and Godavari belts. The peasant castes that consolidated their position on fertile land had the surplus and necessary leisure to participate in politics. The formation of the state of Andhra Pradesh also is the result of the demand for Visaalandhra mainly from the rich peasantry of coastal Andhra region and from the Communist Party of a backward region, Telangana.