Progressive policies a must for Telangana to attract investments

Industrialists, industrial associations and corporates lined up to meet Anumula Revanth Reddy, the young and newly-elected Chief Minister of Telangana, last week. That’s a good sign indeed for the Congress government as such meetings will not only bridge the gap between the industry and the powers-that-be, but also send positive vibes to all potential investors.

On his part, Revanth Reddy is doing the right thing by being accessible to industrialists and investors.

A notable industrialist who called on him was Jayadev Galla, Chairman and Managing Director of Amara Raja Energy & Mobility (formerly Amara Raja Batteries).

Amara Raja Group had announced big investments in Telangana a couple of years back following an issue with the Jagan Mohan Reddy government in Andhra Pradesh. The company, which is now setting up a giga factory for lithium-ion batteries in the State, has already lined up Rs 9,500 crore in Telangana over the next 10 years. During this meeting, the group indicated that it would invest more in the State.

Interestingly, a delegation from the diversified Adani Group, led by Karan Adani, son of group founder and Asia’s richest person Gautam Adani, also met the Chief Minister.

Obviously, this meeting has raised eyebrows as Congress and its leader Rahul Gandhi have consistently been alleging that Prime Minister Narendra Modi has been rendering undue favours to the conglomerate. This alleged Adani-Modi relationship is likely to be a major election issue in the upcoming General Elections. Meeting the Adani delegation just before the polls is fraught with political risks.

However, political parties face such a predicament whenever they target industrial houses. But it is good for Telangana that Revanth Reddy has put the State’s interests above politics. That is a good augury as the Adani group, which doesn’t have a big presence in Telangana, may invest in the future. Representatives from the Telangana Chapter of the Confederation of Indian Industry (CII Telangana) and the Bulk Drug Manufacturers Association (BDMA) also called on the Chief Minister, as was a delegation from Welspun.

During his interaction with the CII Telangana delegation, led by its Chairman C. Shekar Reddy, the Chief Minister unveiled his vision for the industrial development of Telangana, which included a Mega Master Plan-2050 and three industrial clusters in urban, semi-urban and rural areas. These are good initiatives. There is no doubt about it.

But most of such meetings are courtesy calls. This happens whenever a new government comes into power in any State. Actual investments will pour in only if the new government has its own proactive team in place, and formulates an equally robust and progressive policy framework. It will take some time for the Revanth Reddy government to have these in place.

Though the Congress government made its intention clear on attracting investments through several positive announcements, cancelling the Hyderabad Pharma City (HPC) is not a good idea. It's like killing the golden goose, which is ready to lay eggs. Several pharmaceutical units are now within Hyderabad city limits. They can be shifted to HPC if the present dispensation goes ahead with it.

The Chief Minister announced that instead of HPC, his government would develop pharma villages in areas ranging from 1,000 to 3,000 acre each. But such projects are unlikely to materialise in the next five years as setting up an industrial cluster is a time-consuming process.

Furthermore, as land rates have skyrocketed now, it will be an expensive proposition for the TS government to acquire new lands for industrial use. Moreover, landowners will not give their lands easily. Forceful acquisition of the land by the government will create unrest. Therefore, using the already acquired lands will be the cheapest and the viable option for the government to promote industrial growth.

As the Hyderabad Pharma City is spread across more than 19,300 acres, it can be one of biggest industrial clusters across India. The previous BRS government claimed that the pharma city was planned to generate nearly $10 billion in investments and over 5.5 lakh jobs. The central government recognized it as a National Investment and Manufacturing Zone (NIMZ).

So, the Telangana government should appoint a non-partisan expert committee to study the project threadbare with a focus on the possible impact on the environment. If the committee finds any fault with the project, then it can cancel the pharma city project and develop it into a green industrial city. But developing it into a pharmaceutical cluster should be the priority as the government has spent considerable amount of time and money on it in the last five years. Moreover, it is located 25 km away from the Outer Ring Road (ORR). So, it is unlikely to have any adverse impact on the city.

The other development, which can’t be termed as positive for Telangana, is the cancellation of electric car race, Hyderabad E-Prix, scheduled to be held in the city on February 10. Organisers of Formula E cancelled the race after the new Congress government declined to support it. To emerge as a global city in the true sense of the term, Hyderabad needs events like E-Prix.

Like millions of its fans, I too hope that the Revanth Reddy government brings back the E-Prix. I know motorsport is elite, but it’s gaining traction in India as well.

As I mentioned in my earlier column, attracting investments is one of key factors to fuel economic growth in the newly-created State. Moreover, higher economic growth is essential for the Congress government to implement its welfare schemes, most of which are high-value in nature and require funds, running into thousands of crores. So, the Telangana government should continue to take measures to get large-scale investments.

Though, giving freebies to the poor and downtrodden is okay, the administration should remember that high-value schemes like Rythu Bandhu are a big burden on the exchequer. So, the government may not be able to continue them for long without borrowing loans at high interest rates. Therefore, there should be a rational analysis on such schemes and the government should find ways to support those farmers, who are true cultivators. Paying landowners who don’t cultivate is a sheer waste of taxpayers’ money. Moreover, as happened with the Dalit Bandhu scheme in recent polls, high-value schemes may turn counterproductive in the next elections if the government fails to implement them due to lack of funds.

Will the Revanth Reddy government assess the real social impact of all the welfare schemes and stick to those which benefit the genuinely needy? Hope it does so in the interest of the overall wellbeing of Telangana State.