 "Naidu 2.0: From software to everywhere")
"We have so many advantages: we are going to build a new capital, (it will be) one of the most beautiful places with the Krishna river on both sides. The city will have a 25-km waterfront and the water is not like Ganga water, no purification is necessary," Andhra Pradesh Chief Minister N Chandrababu Naidu told a group of Cisco employees at the networking giant's campus in Bengaluru last month, tongue firmly in cheek. His speech evoked applause and laughter, as did his comments later at a road show organised by Confederation of Indian Industry, where around 300 businessmen had gathered to listen to Naidu. "We had very good competition between me and (former Karnataka chief minister) S M Krishna at that time - I was very happy to compete with him at that time," Naidu had said, with a smile.
He may have been smiling but nobody there had any doubts that Naidu, in his avatar as chief minister of a brand new state, meant business when it came to attracting new investments, even if it involves taking them right from under the noses of neighbouring states like Karnataka and Tamil Nadu. His biggest coup so far has been to convince Hero Motor Corp to set up its next two-wheeler plant in Chittoor in Andhra, an investment of Rs 3,500 crore. The state government has allotted 600 acres to the company for the plant.
The decision was a blow to Karnataka because Dharwad in the northern part of the state was supposed to have been the frontrunner for the mega two-wheeler investment, which is expected to create around 20,000 jobs. In fact, in early August, a committee headed by Karnataka Chief Minister Siddaramaiah had given its nod to various tax breaks for the plant. Leaders from Dharwad, like former chief minister Jagadish Shettar, had reportedly leaned on Siddaramaiah to speed things up because by then it was well-known that Naidu was vying for the project. Later, once the announcement of the plant came through, Siddaramaiah told journalists that the state had lost out because Andhra was offering free land on a 99-year lease which Karnataka could not offer because other companies would demand the same perk. He said he had raised the issue of incentives with Prime Minister Narendra Modi. "That is what I told Narendra Modi; it creates unhealthy competition; please don't do this. And please withdraw whatever concessions you are going to give," he told reporters. Hero Motor Corp could not be contacted for comment on its decision.
Since assuming office as chief minister of Andhra Pradesh in May this year, when his Telugu Desam Party won 106 of 175 seats, Naidu has been pulling out all stops to get big-ticket investments to the state. In the first 100 days since assuming power, the state has attracted investments to the tune of Rs 83,000 crore, according to Parakala Prabhakar, communications advisor in the government. Of this, around Rs 30,000 crore will be by NTPC for a thermal power plant and Rs 40,000 crore from the defence ministry though he declined to divulge details of the latter.
Naidu is also keen to revive his image as an industry-friendly leader. During his visit to Bengaluru, Naidu announced that clearances for companies would be given in 30 days, instead of the 60 days earlier promised by the state. He added that if land was allotted for a project, all the other requisite permissions would be deemed to have been granted, and urged industry leaders to approach him directly if they faced problems. The state is also promising a single-desk clearance where it would be the duty of the official to ensure that the entrepreneur gets all the clearances, while every major project would be allotted an escort officer. Prabhakar also said that the state has a million acres of land to be allocated for industry, which would be doubled in the next year. Regular power supply and water are other advantages with which the state is wooing investments.
In September, a similar road show was held in Chennai to woo IT companies in that city, presided over by minister for information technology Palle Rathanutha Reddy. A government release says the road show attracted over 250 companies which expressed interest in setting up operations in the state. Later that month, a CEO conclave was held and a sunrise startups incubation centre inaugurated by the chief minister, during which agreements were signed with Wipro and Tech Mahindra , among others, for investments of Rs 150 crore and Rs 250 crore, respectively.
And that's just within the country. Naidu has not wasted time in wooing foreign investors either. Last month, he led a 10-member delegation to Singapore, his first trip abroad since taking charge. This was followed by a five-day visit to Japan, where he met Japanese Prime Minister Shinzo Abe and a host of industrialists and signed six major agreements. Both Japan and Singapore are reported to have committed help in building the new capital, which would come up in the Vijayawada-Guntur region. Isuzu Motors will be building a pick-up truck manufacturing plant at Sri City, while Soft Bank expressed interest in financing solar power generation plants. Singapore's commerce and trade minister is expected to visit the state next week, when more agreements would be signed.
Naidu reportedly stated that he wanted Andhra Pradesh to be the state to get the most investment from Japan, a comment that is unlikely to have gone down well with Karnataka and Tamil Nadu. Karnataka hosts close to 300 Japanese companies in the state, including big names like Toyota, Honda and Fujitsu. The Japanese government is reported to be conducting a feasibility study for a Japanese industrial zone in the state while Siddaramaiah has mentioned that a Japanese township in Tumkur is also under consideration. Across the border, Tamil Nadu Minister for Industries P Thangamani told the assembly in July that 523 Japanese companies have invested in the state, a number that has doubled in the last three years, while Karnataka had 299 and Andhra 229. The minister also pooh-poohed the rival states' attempts to woo investors, especially Naidu's offer of cheap land in Tada, which is just 70 km from Chennai, saying that Tamil Nadu's law and order situation and qualified workforce trumped that advantage.
A concerned competition
Though no minister would admit to being rattled, Naidu's competitiveness is hard to ignore. On the day he was in Bengaluru, Karnataka moved fast to mollify Infosys, which threatened to pull out of Devanahalli IT Park near the airport because of lack of infrastructure. "There is no question of the IT major pulling out from its project at Devanahalli IT Park. We will fulfil all its needs, which include round-the-clock water supply and building a four-lane road to the project site," Infotech and Miotechnology Minister S R Patil had told reporters.
Industry leaders were unwilling to comment on the competition among Andhra, Karnataka and Tamil Nadu but Biocon Chairman Kiran Mazumdar-Shaw says she believes industry would go to the state that offers it the best ecosystem. "Industrial houses in Karnataka feel that the government is probably not doing enough to improve the ease of doing business and the investment climate in the state. Having said that I would like to add that Biocon continues to invest in expansion in Karnataka despite the challenging environment," she says
Shaw adds that Karnataka needs an independent industry minister, a view that has been echoed by others. At present, the chief minister holds charge of the department. "Karnataka needs big, bold ideas to rejuvenate its attractiveness among industrialists. Reviving the momentum in industry would lead to growth and development and prevent serious players from pulling out of the state," Shaw says.
While mentioning the opportunities the new state of Andhra offers investors, such as a coastline of nearly 1000 km, plans to develop 14 ports and three international airports, Prabhakar acknowledges that there are challenges as well, such as a Rs 16,000-crore deficit. The special status and incentives for industry promised by the Centre are also yet to come through. "But it was a promise made on the floor of the House; we are confident it will happen," he says.
Naidu, too, is gung-ho about taking on other states when it comes to bagging investments. Speaking at the World Economic Forum meeting in New Delhi last month, he had said, "States have to compete with each other, and also market. I used to compete with the Karnataka government for IT, and it will continue. We will complement where necessary, and compete where necessary."
He may have been smiling but nobody there had any doubts that Naidu, in his avatar as chief minister of a brand new state, meant business when it came to attracting new investments, even if it involves taking them right from under the noses of neighbouring states like Karnataka and Tamil Nadu. His biggest coup so far has been to convince Hero Motor Corp to set up its next two-wheeler plant in Chittoor in Andhra, an investment of Rs 3,500 crore. The state government has allotted 600 acres to the company for the plant.
The decision was a blow to Karnataka because Dharwad in the northern part of the state was supposed to have been the frontrunner for the mega two-wheeler investment, which is expected to create around 20,000 jobs. In fact, in early August, a committee headed by Karnataka Chief Minister Siddaramaiah had given its nod to various tax breaks for the plant. Leaders from Dharwad, like former chief minister Jagadish Shettar, had reportedly leaned on Siddaramaiah to speed things up because by then it was well-known that Naidu was vying for the project. Later, once the announcement of the plant came through, Siddaramaiah told journalists that the state had lost out because Andhra was offering free land on a 99-year lease which Karnataka could not offer because other companies would demand the same perk. He said he had raised the issue of incentives with Prime Minister Narendra Modi. "That is what I told Narendra Modi; it creates unhealthy competition; please don't do this. And please withdraw whatever concessions you are going to give," he told reporters. Hero Motor Corp could not be contacted for comment on its decision.
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Eye on industry
Since assuming office as chief minister of Andhra Pradesh in May this year, when his Telugu Desam Party won 106 of 175 seats, Naidu has been pulling out all stops to get big-ticket investments to the state. In the first 100 days since assuming power, the state has attracted investments to the tune of Rs 83,000 crore, according to Parakala Prabhakar, communications advisor in the government. Of this, around Rs 30,000 crore will be by NTPC for a thermal power plant and Rs 40,000 crore from the defence ministry though he declined to divulge details of the latter.
Naidu is also keen to revive his image as an industry-friendly leader. During his visit to Bengaluru, Naidu announced that clearances for companies would be given in 30 days, instead of the 60 days earlier promised by the state. He added that if land was allotted for a project, all the other requisite permissions would be deemed to have been granted, and urged industry leaders to approach him directly if they faced problems. The state is also promising a single-desk clearance where it would be the duty of the official to ensure that the entrepreneur gets all the clearances, while every major project would be allotted an escort officer. Prabhakar also said that the state has a million acres of land to be allocated for industry, which would be doubled in the next year. Regular power supply and water are other advantages with which the state is wooing investments.
In September, a similar road show was held in Chennai to woo IT companies in that city, presided over by minister for information technology Palle Rathanutha Reddy. A government release says the road show attracted over 250 companies which expressed interest in setting up operations in the state. Later that month, a CEO conclave was held and a sunrise startups incubation centre inaugurated by the chief minister, during which agreements were signed with Wipro and Tech Mahindra , among others, for investments of Rs 150 crore and Rs 250 crore, respectively.
And that's just within the country. Naidu has not wasted time in wooing foreign investors either. Last month, he led a 10-member delegation to Singapore, his first trip abroad since taking charge. This was followed by a five-day visit to Japan, where he met Japanese Prime Minister Shinzo Abe and a host of industrialists and signed six major agreements. Both Japan and Singapore are reported to have committed help in building the new capital, which would come up in the Vijayawada-Guntur region. Isuzu Motors will be building a pick-up truck manufacturing plant at Sri City, while Soft Bank expressed interest in financing solar power generation plants. Singapore's commerce and trade minister is expected to visit the state next week, when more agreements would be signed.
Naidu reportedly stated that he wanted Andhra Pradesh to be the state to get the most investment from Japan, a comment that is unlikely to have gone down well with Karnataka and Tamil Nadu. Karnataka hosts close to 300 Japanese companies in the state, including big names like Toyota, Honda and Fujitsu. The Japanese government is reported to be conducting a feasibility study for a Japanese industrial zone in the state while Siddaramaiah has mentioned that a Japanese township in Tumkur is also under consideration. Across the border, Tamil Nadu Minister for Industries P Thangamani told the assembly in July that 523 Japanese companies have invested in the state, a number that has doubled in the last three years, while Karnataka had 299 and Andhra 229. The minister also pooh-poohed the rival states' attempts to woo investors, especially Naidu's offer of cheap land in Tada, which is just 70 km from Chennai, saying that Tamil Nadu's law and order situation and qualified workforce trumped that advantage.
A concerned competition
Though no minister would admit to being rattled, Naidu's competitiveness is hard to ignore. On the day he was in Bengaluru, Karnataka moved fast to mollify Infosys, which threatened to pull out of Devanahalli IT Park near the airport because of lack of infrastructure. "There is no question of the IT major pulling out from its project at Devanahalli IT Park. We will fulfil all its needs, which include round-the-clock water supply and building a four-lane road to the project site," Infotech and Miotechnology Minister S R Patil had told reporters.
Industry leaders were unwilling to comment on the competition among Andhra, Karnataka and Tamil Nadu but Biocon Chairman Kiran Mazumdar-Shaw says she believes industry would go to the state that offers it the best ecosystem. "Industrial houses in Karnataka feel that the government is probably not doing enough to improve the ease of doing business and the investment climate in the state. Having said that I would like to add that Biocon continues to invest in expansion in Karnataka despite the challenging environment," she says
Shaw adds that Karnataka needs an independent industry minister, a view that has been echoed by others. At present, the chief minister holds charge of the department. "Karnataka needs big, bold ideas to rejuvenate its attractiveness among industrialists. Reviving the momentum in industry would lead to growth and development and prevent serious players from pulling out of the state," Shaw says.
While mentioning the opportunities the new state of Andhra offers investors, such as a coastline of nearly 1000 km, plans to develop 14 ports and three international airports, Prabhakar acknowledges that there are challenges as well, such as a Rs 16,000-crore deficit. The special status and incentives for industry promised by the Centre are also yet to come through. "But it was a promise made on the floor of the House; we are confident it will happen," he says.
Naidu, too, is gung-ho about taking on other states when it comes to bagging investments. Speaking at the World Economic Forum meeting in New Delhi last month, he had said, "States have to compete with each other, and also market. I used to compete with the Karnataka government for IT, and it will continue. We will complement where necessary, and compete where necessary."