AP should practice art of luring investors

Back on July 15, 2014, American real estate major Tishman Speyer opened new massive office building of its Waverock IT SEZ at Nanakramguda in the heart of Hyderabad's IT hub.

Telangana was officially created just one-and-a-half months before this date on June 1 and Kalvakuntla Chandrashekhar Rao, as an elated first Chief Minister of the newly created State, came to inaugurate the Tishman Speyer's new premises.

It was his first presence at a corporate event after assuming charge as CM. After doing the honours, he went around the building and came back to say that he didn't feel like he was in Hyderabad.

For him, Waverock IT SEZ and the area surrounding it appeared like a part of a developed country. Like me, many others at the inaugural event did not expect this kind of comment from KCR who always highlighted lack of development in Telangana during the agitation for separate statehood.

As an astute politician who, with just two MPs, forced Congress president Sonia Gandhi to dismantle Andhra Pradesh, the State that propped up her party's government at the Centre twice in 2004 and 2009 and carve out Telangana, KCR knows very well that politics are different from the development and his anger against Andhra people should remain in political domain.

He also knows that mixing politics with development will ruin the country's youngest State. That's what he exhibited at the event and thereafter. At the same meeting, he also sent positive signals and message to the investors by revealing contours of Telangana's first industrial policy which later took a shape in the form of TS-iPass.

The policy which celebrated its fifth anniversary recently brought investments to the tune of Rs 1.73 lakh crore into Telangana till date. Besides, the KCR government effectively tapped IT sector ecosystem nurtured in Hyderabad by the previous governments.

Many warned during the statehood agitation that investments into Hyderabad and the rest of Telangana would dry up post the bifurcation.

But going by the phenomenal rise in IT exports and large-scale investments under TS-iPass in the last five years, that prophesy turned out to be false. That means Telangana perfected the art of luring investors by now.

Cut to December 5, 2019. I was at 'Grand Opening Ceremony' of Kia Motors' $1.1-billion car plant near Erramanchi village in backward Anantapur district of Andhra Pradesh.

AP Chief Minister YS Jagan Mohan Reddy, who stormed to power with an astounding majority in this year's elections, was chief guest at the event that marked the completion of the South Korean automaker's 15th car plant globally.

Incidentally, it was Jagan's first appearance at a major corporate event after he took charge as CM on May 30 this year.

It's no exaggeration to say that many decisions initiated by the Jagan government rattled investors in India and abroad. Foremost among them is its decision to review power purchase agreements (PPAs) that the previous government signed with renewable energy companies and others.

Dubai-based Lulu Group said it would never invest in Andhra Pradesh after the AP government cancelled land allotted to it by the previous government for the development of mega convention centre in Visakhapatnam, citing transparency and environmental issues.

Such an adverse statement by a $6.5-billion diversified conglomerate will have far-reaching implications for AP. Singapore Consortium pulled out of Amaravati project while World Bank cancelled loan to the Greenfield capital.

In this backdrop, the national media which came to cover Kia's event in Anantapur district expected Jagan to use the platform and send some positive signals to the investors. But he hardly spoke for four minutes and his speech contained nothing that would please the investors.

The Chief Minister has so many media advisors, but they seem to be busy with more important tasks! Are investments least priority for the Jagan government? It looks like so.

In the last five years, YS Jagan fought very hard for special category status (SCS) promised by the Union Government to the truncated State during the bifurcation process.

His main contention was that AP would not receive investments unless Centre grants the SCS and announces incentives. But the investment climate in Andhra Pradesh now is such that leave alone the new investors, the existing investors will move out of the State.

The damage has already been done and it's not going to be easy for the AP government to repair it unless it acts fast.

The fact of the matter is that industrialists go to those States which have the attractive industrial policies, provide hassle-free environment and trouble-free existence.

A homebuyer distills, filters and dissects tens of real estate projects before purchasing a house even if it's worth Rs 50 lakh. That means he or she is aiming at choosing best possible option.

An Indian woman checks tens of sarees at 10 different stores before buying one for her because she looks for the best product in her budget and she wants to look the best.

Industrialists and investors are more astute than a homebuyer and saree-buying Indian woman. Otherwise, they would not have reached to a position where they are now. The Jagan govt should understand this.

A couple of months back, I asked a seasoned IT company owner to comment on the investment climate in Andhra Pradesh. "Please excuse me. I don't and I can't" was his refrain. This is a clear signal as to how industrialists fear talking about AP.

Industrialists and investors see profits, not politics. More so are pure investors. They would love to remain apolitical. In the same breath, they hate losses - loss in capital deployed and losses in business operations.

And they are the ones who understand best the idiom of 'there are no free lunches in this world'. More importantly, they despise to be caught in political crosshairs. So, pushing investors and industrialists into political crossfire will take Andhra Pradesh nowhere.

Till now, the Jagan government seems to be practicing the art of scaring investors. It should change the course forthwith. Henceforth, it should practice the art of luring investors.

Otherwise, investors will shun the State. That will be a big loss for Andhra Pradesh and its government which has taken up innovative welfare measures.

Last word: KCR has an able and reliable lieutenant in his son KTR to take care of the investors and tap the investment potential of Telangana and its crown jewel Hyderabad.

Nara Chandrababu Naidu, as AP CM between 2014-19, did that for Andhra Pradesh post the bifurcation. CM Jagan needs to find a clever and astute confidante who can do a KTR for Andhra Pradesh and put the State on a long path to industrial growth.