Two years of Telangana: Why the state is still fighting perils of red tapism

It is the second anniversary of statehood for Telangana. The state recently got the nod from none other than Apple CEO Tim Cook’s visit to its capital Hyderabad. Cook announced that Apple’s upcoming technology development centre, which is expected to be ready by early 2017, would be set up here. The centre in Hyderabad will be Apple’s first technology centre outside the US. In December, Google’s chief executive Sundar Picchai in his visit to India said the company would set up a new campus in Hyderabad. [caption id=“attachment_1442065” align=“alignleft” width=“380”]  Telangana CM K Chandrashekar Rao. PTI[/caption] Telangana is sitting pretty with these milestones. Business houses and investors Firstpost spoke with highlighted Google and Apple as the highwater mark of the two year-old state’s business prospects  and said its growth and development was attracting investment from India and abroad. When Telangana was created in 2014, it had a rocky start with abysmal power supply due to technical snags at two thermal power plants  in Vijayawada  and Kothagudem. But that has long since improved, says Devendra Surana, Chairman, FICCI Telangana Council. He says that from 30 percent power cuts in 2014, the state is now getting uninterrupted power supply and credits the state government and the central government for it. Though the big names in industry across the world have visited the State and some have set shop in Telangana, Surana says the state has not attracted marquee investments. “We don’t have a port and that works against manufacturing industries,” he said, adding that the government cannot do much about it as it is a landlocked state. Telangana was ranked 16th in the World Bank’s Ease-of-Doing-Business index recently and Andhra Pradesh (Telangana was part of Andhra Pradesh before getting separate statehood) was ranked second. In response to the ranking, Kalvakuntla Taraka Rama Rao (industries minister), popularly known as KTR - son of Telangana CM K Chandrasekhar Rao, had identified a few departments such as law, urban development, energy among others for not being readily proactive towards compliance which affected the business environment of the state. To the dismal World Bank ranking, Surana of FICCI says that he has not witnessed or heard of any difficulty from the business community with regard to ease of doing business in the state. Ease of doing business is not a state subject and the state follows central government’s stipulations, points out Srinivas Kollipara, one of the founders and Chief Operating Officer of T-Hub, India’s largest incubator of start-ups located at Hyderabad, Telangana. Kollipara said that the state’s policies facilitated businesses, both small and large and the creation of the T-Hub is an example of the state’s intention to promote start-ups. Sanjay Enishetty, Managing Director of the Hyderabad-based 50K Ventures, a network of HNIs, accredited investors and mentors, credits the recently inducted ministers KTR, who took charge of the Industries portfolio in April as someone who can `do a lot for the state’ and bring in investment from across India and abroad with his `for-business outlook’. The T-Hub, an initiative between the government and key stakeholders in the start-up ecosystem, is one of the biggest achievements of the state government. By setting up a panel of mentors who are available to the start-ups, the government is helping startups progress, says Enishetty. As one of the founders and Chief Operating Officer of T-Hub, Srinivas Kollipara claims that there hasn’t been `wrong move’ from the government that has gone against the development of a business environment. “We have done fantastically well. I would say that I am the cheerleader for the government,” he says. Kollipara claims may seem quite flattering. When this was pointed out to him, he said that his reason for ‘praising’ the Telangana government was because it was felt during the creation of the state that it would be biased against Andhra Pradesh and anyone from AP would find it difficult to set up businesses or base in the new state. “I am from Andhra Pradesh and have not felt it,” points out Srinivas. The government has hit all the right buttons so far, most businessmen and women opined. When asked about the drawbacks or failings of the government, Surana said his only complaint was that red tapism is proving to be a roadblock in the setting up of more industries and start-ups in the state. What Surana wants the government to do is to release the incentives that it had promised investors such as stamp duty waivers, power subsidy, etc. Instead of looking outside the state for investment, it would help if the government looked within by bringing the remaining 9 districts in Telangana (there are 10 in all including Hyderabad) at par with the stage of growth of Hyderabad, says Vanitha Datla, Vice Chairperson of the over 50 year-old Elico Ltd, an analytical and instrumentation firm. “The government should encourage industrial development in these districts. Information Technology may not be the answer to these nine districts like it is in Hyderabad. IT facilities may not reach these districts, too and there may be difficulties to adopting technology,” Datla said. She would like the government to actively pursue plans and policies that will lead to business growth and development in the remaining nine districts of Telangana. Another issue that Datla would like the government to pay attention to is the revival of sick industries. “We understand that some policy on the issue is on the anvil. If existing owners of sick industries cannot revive them, then the government should make it easy for these businesses to change hands,” she said. Hopefully, the Telangana government and KTR will pay attention to these issues and bring the remaining districts at par with Hyderabad.