Chandrababu Naidu's hunger for investment ensured Andhra Pradesh topped ease of doing business index

The moment automobile major Kia Motors evinced interest in moving out of Tamil Nadu and exploring Andhra Pradesh as an option in December 2016, Chandrababu Naidu had decided he won’t let the Korean company drive past his state without setting up a base. A facilitator of Revenue Divisional Officer rank was appointed to help locate a suitable land parcel in Anantapur district. Three months later, when the file was ready, it was perused and cleared by the Planning Board overnight. A week later, the deal with the auto ancillary units was signed. The following month, the MoU with Kia Motors was inked. Burning the midnight oil was fruitful. Kia will be the first automobile unit that will start production within 18 months of setting up a base, with the first car set to roll out in January 2019.

“Post-bifurcation, Andhra Pradesh was known predominantly as an agricultural state, barring some PSUs in Visakhapatnam. Today, one in every mobile handset produced in India is a Made in Andhra product, manufactured in three different industrial clusters in the state. Bagging the number one rank in Ease of Doing Business means the Who’s who of national and international investors will be attracted to Andhra,” says C Kutumba Rao, Vice Chairman of the Andhra Pradesh Planning Board.

This zeal is what has ensured Andhra Pradesh retain the top spot in the Ease of Doing Business rankings for the second time in a row. What is credible is that neighbour Telangana shares podium space once again, losing out on the number one rank by a decimal point. The two Telugu states had tied at the top spot the last time. This year, Telangana scored 98.33 percent to Andhra’s 98.42 percent. One of the USPs of both Andhra and Telangana is that they have promised time-bound clearance for projects and even penalise officers if it is not done. Industrialist Harish Chandra Prasad credits chief minister Naidu for much of the zeal that Andhra displays. [caption id=“attachment_4420809” align=“alignleft” width=“380”]  File Image of N Chandrababu Naidu. Getty images[/caption] “The man at the top is hungry for investment. He knows Andhra cannot grow without it, and so he has focused on putting the systems in place. Even in the attitude of the bureaucracy, there has been a positive change. Now I get calls from local officers at the mandal and panchayat-level pushing for projects in their areas, showcasing what they have got. The mood has changed. Earlier they were not so forthcoming,” says Prasad. But Telangana is not sulking over losing out by a whisker. It is focusing on two aspects that were not captured this time around - The Cost and Quality of Doing Business. The biggest problem information technology (IT) majors like Infosys, Wipro, TCS faced when they recruited talent from Telangana was that they were not ready to plug in and start working. They had to be trained over the next seven months to mould them for their requirements. This meant that these employees did not generate any revenue for that period as they could not be deployed on any live projects. “We found out from these big recruiters the kind of software and applications the new recruits would work on when they joined and introduced that in the fourth year syllabus. As a result, the seven months has now been reduced to just 15 days of orientation, bringing down the cost factor significantly for these companies,” says Jayesh Ranjan, Industries Secretary of Telangana. The numbers are impressive, given that there was apprehension that both Telugu states would lose out in terms of competitive edge, after bifurcation in 2014. Andhra Pradesh has signed MoUs for projects worth Rs 16 lakh crores, promising employment to 34 lakh people. Of this, 1,500 projects with investments worth Rs 6 lakh crore giving 9 lakh jobs are either up and running or at an advanced stage of completion. Telangana has brought in investments worth Rs 6.5 lakh crores, employing 5 lakh people. In order to underline transparency, Naidu has instructed companies to put up the names and details of its employees in the public domain so that the employment figures are out in the open. Andhra Pradesh’s grouse is that while Telangana has the advantage of readymade infrastructure and Hyderabad as a magnet to attract investors, it has had to start from scratch. Its neighbour does not quite agree pointing out that much of the investment in Andhra is coming into Sri City and Anantapur district and both of them gain from their proximity to Chennai and Bengaluru respectively. Sri City is just 65 km north of Chennai and 25 percent of the units working in the SEZ have their registered offices in Chennai. Likewise, expensive land in Bengaluru makes Anantapur an attractive option to set up a base. Andhra’s worry is that it is embroiled in a political maze, Naidu having withdrawn support to the NDA government this March. Kutumba Rao points out that a month after the Telugu Desam pulled out, a Korean investor asked him if there is any political risk involved in continuing to stay invested in Andhra. “The feedback score, which had 20 percent weightage in the final ranking, was taken between February and April. Our score of 86.5 percent shows that investors were confident to stand by Andhra, despite their concerns,” says Rao. Of the 372 parameters on which the states were judged, feedback was taken on 78 parameters. The Department of Industrial Policy and Promotion in the Union ministry of Commerce and Industry plans to make the weightage of feedback 100 percent from next year, to ensure that investor satisfaction is what will finally count. But despite the Centre putting out the rankings, the BJP behaved like a sore political loser. Rajya Sabha MP GVL Narasimha Rao tweeted an April 2017 survey by the Centre for Media Studies that showed Andhra at number 2 position when it came to corruption in public services. But while congratulating Naidu on this feat in the “Ease of Doing Corruption”, Narasimha Rao conveniently forgot that in 2017, the BJP was a part of the Andhra government in Amaravati.