We gave auto makers the best possible deal

We gave auto makers the best possible deal
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First Published: Thu, Nov 27 2008. 10 58 PM IST

Upbeat: Andhra Pradesh chief minister Y.S. Rajasekhara Reddy. Bharath Sai / Mint
Upbeat: Andhra Pradesh chief minister Y.S. Rajasekhara Reddy. Bharath Sai / Mint
Updated: Thu, Nov 27 2008. 10 58 PM IST
Hyderabad: Andhra Pradesh chief minister, Y.S. Rajasekhara Reddy, is undeterred by the charges of large scale corruption levelled by the Opposition against his government involving several projects in irrigation, infrastructure and industrial parks through special economic zones taken up at lakhs of crores of rupees and inordinate delay in completion of those projects. He is rather elated over the programs and projects taken up by his government during the last four-and-a-half years of his tenure.
Upbeat: Andhra Pradesh chief minister Y.S. Rajasekhara Reddy. Bharath Sai / Mint
Citing reports of Reserve Bank of India (RBI), Confederation of Indian Industry (CII) and Associated Chambers of Commerce and Industry of India (Assocham), he claims that AP has become one of the chosen destinations of investment in the country for such as Information Technology, IT Enabled services, Pharmaceuticals and Biotechnology, and that the State is in the process of emerging as a hub of manufacturing sector as well.
Notwithstanding the fact that Andhra Pradesh could not attract big-ticket investments into automobile sector, including the latest failure to attract the Tata Nano project immediately after the West Bengal episode, the chief minister says the newly announced industrial promotion policy should soon attract major investments into the state’s automobile sector.
While making it clear that his government never went out of the way in obtaining loans from the World Bank and other global agencies unlike his predecessor, he said these global lending agencies, in fact, had kept themselves away from the state when his government introduced farmer-friendly initiatives such as free power and moratorium on farm loans.
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He refutes accusations of the Opposition on acquisition of fertile agricultural lands for 97 special economic zones (SEZs), largest number in the country, coming up over 12,795 hectares land in the state. The government had never indulged in forcible acquisition of fertile agricultural lands and the land acquisition for SEZs was being done through negotiated deals with farmers’ consent only after paying adequate compensation, Reddy told Mint.
Terming the corruption charges levelled against his government as baseless and were solely aimed at attaining political advantage and media limelight, he dared the opposition parties to approach the appropriate bodies meant to investigate such misdeeds.
How do you rate your performance in the last four-and-a-half years of your government’s tenure?
During the last four and half years my government has been successful in transforming the agriculture sector into a profitable economic activity besides promoting employment generation in all sectors — agriculture and industry, by empowering the youth with soft skills and technology to improve their employability.
To what extent were you successful in implementing the electoral promises you made as a part of election manifesto in 2004?
The Congress party made nearly 150 promises during the 2004 elections of which almost every one has been addressed. In fact it is a record that we have taken up programs and projects, which we did not even mention in our manifesto. We are committed to development agenda and our priority areas are already well publicized and addressed — irrigation, employment generation, infrastructure, women-empowerment and minority welfare, social safety for all deprived classes — pensions, houses, subsidized food and education.
What is being done to ensure the success of the state’s key industrial sectors such as pharmaceuticals, information technology, IT enabled services and biotechnology, which largely depend on improved infrastructure, overall skills availability, good quality educational institutions and active political support?
AP is always at the forefront in exports of IT and pharmaceutical products and has made distinctive forays in biotechnology and ITES sectors as well. The latest reports of Assocham, CII and the RBI all have clearly indicated that AP was the chosen destination of investment and that the state also was emerging as a hub of manufacturing sector.
Our only concern now is the global economic slowdown and its likely impact on the state’s initiatives towards promoting industries and attaining high economy growth rates. This is especially because most of the major projects we took up include seaports and SEZs that in close proximity to these ports, apart from the infrastructure being built alongside the vast seacoast we have. Most of these projects taken up either by the private sector or through public-private partnership route are half way through and may find difficulties in raising necessary funds.
Unfortunately, wherever bomb blasts took place in the country, the roots of those plots were located in Hyderabad, terming the state has safe zone for Islamic terrorists. Maoist violence is another such issue. How do you plan to address these issues to ensure law and order in the state?
My government has not been complacent to the issue of law and order. In the backdrop of last year’s bomb blasts by terrorists, every effort is made to ensure the safety of the citizens and also maintain peace and tranquility in the state. Besides regular police force, we are raising a special force to deal with terrorism — Octopus — for which we are recruiting nearly 30,000 policemen, of which 17,000 are already in the training fields. Since this government took over in 2004, we have successfully contained the CPI (Maoist) influence in the state by driving them away from the Nallamala and the Manya forests in the state. The Maoist violence has almost been contained in the state.
How do you rate the financial discipline of your government and tax administration? What were your achievements on this front and failures, if any?
Our first task when we took over was to enforce financial discipline in the administration and streamline our revenue collection, which has grown by leaps and bounds. Thanks to improved fiscal management and better tax administration, the huge revenue deficits of Rs21, 994 crore for ten years of 1994-2004 have now become history. Our annual budget outlay for the current year 2008-09 has reached an unprecedented level of Rs1, 00,346 crore, a 24% increase over last year. As recognition of financial discipline of our state, the Planning Commission sanctioned a record plan outlay of around Rs44, 000 crore, an increase of 44% over previous year. Unlike the previous government that went for over draft at least twice in a year, our government has not gone for ways and means grants even once.
What is your response to the allegations that the government’s policies are completely influenced and controlled by the World Bank?
I must tell you very clearly that this government has not gone out of the way to get advances or loans from World Bank or other global lending institutions. In fact, in the initial days these institutions kept themselves away from us when my government introduced path-breaking initiatives for the farmers’ welfare such as free power and debt moratorium etc. Looking at the state’s achievements in food grain production and also in employment generation in the last four years, these global lending agencies are now keen to lend us funds for infrastructure, social and human resource development projects.
How do you explain your inability to attract big-ticket investments, especially in the manufacturing segment, during your tenure?
It is not true to say that the state has not received big-ticket investments. We have received large investment proposals in sectors such as leather goods, textiles, cement, steel, uranium and pharmaceuticals sectors, which are in various stages of implementation. The state has received a record industrial investment proposals of nearly Rs1, 08,559 crore in the first half of 2008. We have set a record of sorts with principal approvals for 97 special economic zones with a proposed investment of Rs1, 50,000 crore to provide 2.5 million jobs. A recent survey by Assocham has revealed that AP has emerged as the fifth largest economy in the country with potential to attract Rs10 lakh crore investments in the next five years.
What do you think are the reasons for the state in failing to attract investments from major automobile players, both international and domestic, including Tatas in the recent episode of pulling out their investments from West Bengal?
I refuse to accept your contention that the state has failed to attract investments in automobile sector. We gave the best possible deal for all the automobile manufacturers including the Volkswagen AG, the Ford and also the Tatas for their Nano project. One key reason for lack of interest from the automobile companies to invest in AP could be the absence of ancillary units here. And the credit for failure to attract automobile industries should go to our predecessors who did not promote any ancillary industries in the state. In fact, there was a time when the outskirts of Hyderabad had ancillary industries when the state-owned scooter industry was around. By winding it up, the previous government broke the back of the automobile ancillary sector in Hyderabad and surroundings. However, we are now addressing this and slowly regenerating investment in that sector. We have a local manufacturer LML, who has already taken up an automobile project worth around Rs1, 200 crore. Once that sector grew in the coming years in and around Hyderabad, Vijayawada, Visakhapatnam and Anantapur, we should be in a position to attract automobile giants to AP. We have rest of the infrastructure needed — roads, ports, water, power and skilled manpower — already in place.
What is now being planned to attract major investments into the state in terms of industrial policies, tax incentives and infrastructure facilities?
Our industrial policy is aimed at promoting both physical and social infrastructure needed for all-round industrial growth. We have already announced subsidies in power, water, land registration, flexible labor laws etc to attract major investments in SEZs coming up in the state.
What is being done to ensure that the state gets its share in the oil and gas reserves found in the Krishna-Godavari basin, which will boost the state’s economy?
It is a tragic thing that our predecessors did not formulate a pro-active policy towards exploitation of rich oil and natural gas resources in the KG basin. We are trying our best to set right the lapse. We are bringing pressure on the promoters of oil and natural gas finds in the basin to give priority in supply and also a fair amount of quantity for addressing the needs of the power and other utilities of AP before they transfer the resources for profitable exploitation elsewhere. I have personally called on the PM and the other central ministers on the need for a reappraisal of the revenue and resource sharing in the proceeds of the KG basin. I am confident that we will succeed in course of time.
What is your response to the allegations that the government administration is acquiring the fertile lands of farmers across the state for special economic zones (the record number of 71 SEZs coming up in the state involving an investment potential of Rs35, 000 crore and thousands of acres of agricultural lands) instead of barren lands for such industrialization programs?
Andhra Pradesh has been the beneficiary of the Government of India policy of SEZs. We have received sanctions for 97 SEZs, of which 71 have been in various processes of approvals. Naturally the level of industrial activity anticipated and the employment generation projects involved acquisition of huge tracts of land for setting up the needed infrastructure for the economic activity.
There is no forcible acquisition and except where it is essential fertile land of the farmers is not taken. Whenever such an acquisition happened we are giving the farmer full value for his land besides a unique R&R package. The controversies raised and campaigns projected by the opposition parties are politically motivated.
How do you justify the move of selling lakhs of acres of government lands and even mortgaging them to meet the budgetary requirements?
Lot of prime government land is being encroached upon by the unscrupulous elements and the authorities are left with huge litigations, which are going on for decades. It is the opinion of the legal and administrative experts that the best way to find final solution is to dispose off such lands and deploy the proceeds to public use instead of allowing those lands to fall into wrong hands.
After a prolonged study and recommendations, my government has decided to do away with prime land wasted in city of Hyderabad and other cities by disposing them off and raise funds for enhanced social welfare activities. The proceeds from this sale of prime lands are going into the large-scale housing and irrigation projects taken up by the government.
The demand for statehood to Telangana mainly stems out of backwardness in this region during the last several decades. How do you handle this and what is being done under your leadership to achieve a balanced growth?
I firmly believe that the issue of Telangana is both emotional and also development oriented. On the issue when, whether and why there should be a separate state for Telangana, I leave it to my party’s high command to decide, as it is a politically sensitive issue. I respect the sentiments of the people. My aim is to develop the Telangana region fully and then seek people’s mandate whether they want a separate state or continue in the integrated state to enjoy the fruits of more comprehensive growth. Of the Rs1.19 lakh crore worth irrigation projects of the government, projects worth Rs60, 865 crore or 50.73% are coming up in Telangana.
Though you have announced large irrigation projects across the state involving lakhs of crores of rupees, hardly any significant project has been completed so far. What went wrong?
You must understand that irrigation projects take lot of time not only to be grounded but also to be completed. There were some delays in the projects owing to land acquisition and environment clearances.
There is no setback in our Jala Yagnam program. Everything is on schedule, though works rather got delayed due to late approvals in the backdrop of hurdles placed by the opposition parties led by Telugu Desam Party. Secondly, several projects were added in course of time, thereby increasing the capabilities and number of projects entailing more investment. All the projects have now received the sanction of the centre with necessary approvals. There is no dearth of funds for any of the irrigation projects. In the current year, we have allocated Rs16, 500 crore.
What do you have to say on the allegations by opposition parties on large-scale corruption in the works of irrigation projects at the cost of quality of these projects?
If they have any proof on corruption in any of the projects why cannot they approach the appropriate bodies meant to investigate such misdeeds? ’Corruption in Irrigation works’ is a very vague allegation of the opposition. They only aim to take political advantage by making such charges and but also catch the media limelight. However, I am not saying that everything is fool proof.
Projects of this magnitude are bound to have some lapses. If there are any specific cases of lapses and corruption, let the opposition bring them to our notice so that we can rectify them. I believe in accountability but it should not be directed only at those in power and it should be applicable to even those in opposition. I have invited the opposition parties for open forums several times in the past to come out with evidences, if they have any, and the opposition failed in coming out with evidences and participating in open forums to discuss on corruption charges.
How do you justify the all round encouragement of your government to liquor sales in the state with a prime focus on earning revenues? The accusation is that people including farmers and workers are getting addicted to liquor and their families are badly affected by the government’s encouragement of liquor sales through large number of wines and belt shops.
I am getting tired of all these charges and complaints for what I have not done or for which my government is not responsible. This government did not introduce prohibition and relax it for political advantage. The concept of belt shops is not an invention of this government. All of them are handiworks of the previous TDP government. I don’t know why my government gets blamed for this. I really don’t understand how the government could be held responsible for the drinking habits of the people. It is rubbish to say that people, particularly farmers have begun to taste liquor only during our regime. It was Chandrababu Naidu’s government which introduced the concept of ’cheap liquor’ and also the ’belt shops’ to promote liquor sales after the government run distilleries and the ’sale of country liquor’ was abandoned as a political ploy to promote liquor barons.
Liquor industry is promoted as a well managed business activity in AP and hence we are able to reap good earnings and put them to public good through irrigation and housing projects. There is nothing wrong and it is better management, economic activity and common sense, than taxing people and imposing cess on goods.
What steps do you propose to take for an effective distribution of fertilizers to the farming community in the backdrop of large scale siphoning of stocks by some vested interest groups?
Your contention is wrong. There is no siphoning of fertilizer stocks in the state. Thanks to abundant rainfall, more and more land is being brought under paddy by the farmers in the last four years. Same thing happened this year also. A minor problem has cropped up owing to sudden surge in demand for fertilizers. But the issue has been well settled by procuring more fertilizer stocks from the centre and other states. The state government has taken firm steps and stringent action against all those vested interest groups that were engaged in hoarding and creating artificial shortage of fertilizers.
Despite good monsoons and improved water levels in the reservoirs that enable hydel power generation, the farmers in the state suffered severe power cuts recently. What is the cause of this problem and how do you plan to address this in future?
Power crisis is also a similar story. A sudden increase in agricultural demand had led to shortage during the kharif season. There was some delay in rainfall this monsoon that caused a minor setback in hydel generation. Secondly, the agricultural demand is increasing year after year. We have 28 lakh agricultural pump sets drawing free agriculture power and we are adding another 1,50,000 pump sets this year under general and tatkal schemes. Despite this rise in pump sets, we have ensured seven hours power to agricultural sector. We have made budgetary provisions for such contingencies and whenever the demand rose, we have been purchasing power from neighbouring states to facilitate the farmers.
On an average, AP has generated 28357 million units per year so far. It is a record that besides giving free power to agriculture we did not resort to hiking power tariff for domestic sector. In fact, our government has assured both farmers and people that power tariff will not be increased in next five years as well.
What do you think are the key reasons for your administration’s failure in curtailing suicides by farmers and handloom workers?
You must understand that the farmers and weavers suicides used to be a daily and common happening due to neglect of rural economy by our predecessors in pursuit of hi-tech programs. Since we took over in 2004, my government waived all the power dues of farmers and also brought out a special package to bring them out of debt trap. The government initiatives like moratorium on interest and institutional agricultural credit has gone a long way in containing the social tragedy in the state. Naturally it takes time for any initiative to have impact. But in the last four years, farmers’ suicides have come down and their number now is negligible. To resolve the weavers’ problems, our government has taken several steps including the waiver of debts to the tune of Rs336 crore to be provided for in the coming Budget. Besides, we have taken steps to ensure sale of the accumulated stocks of cloth and subsidize the price of yarn. On par with farmers and the minorities, the weavers are also being provided loans at subsidized interest rate of 3% under ’Pavala Vaddi’ scheme.
How do you explain the government administration’s failure in arresting the unusual rise in prices of essential commodities, which has burdened the common man? At the same time, farmers are also put to hardship with inadequate minimum support prices.
Price rise in essential commodities is a global and national phenomenon, a fall out of inflation and oil prices hikes. It is unfair on your part to blame my government for it. Unlike other states, we have undertaken market intervention programs to contain the impact on the common man. The Rs2 per kg rice scheme is one such program that is benefiting nearly 1.74 crore families below poverty line. The government has also introduced a unique package providing 25 kg of rice, one kg each of dal, tamarind and edible oil — all for just Rs115. We have also reduced the open market price of rice to Rs20 per kg by pressuring the rice millers and setting up over 1,571 retail outlets. Topping it all, we have also absorbed the recent hike of Rs50 per LPG cylinder to provide succor to the housewives in the state. All these initiatives are expected to provide relief to the common man from the blunt impact of the oil prices and inflation.
What do you have to say on the allegations of nepotism that you were offering undue favors to your kin and kith either directly through granting them government permissions or indirectly wherein the industrial houses benefited by the government invest huge amounts in the business ventures of your family members?
All of them are normal and routine allegations in a democratic society. They are voiced prominently by a section of the media and also the opposition parties. I have many times offered to conduct enquiry even if an iota of proof is provided in any of the instances. They are all baseless charges.
c.sukumar@livemint.com
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First Published: Thu, Nov 27 2008. 10 58 PM IST