The City has emerged as a national capital of summits for attracting investments. It started with partnership summit in January this year, followed by ongoing Advantage AP and the upcoming Convention on Biological Diversity (CBD) in October. However, there are apprehensions to what extent the summits will be successful in attracting the investments given the current political scenario.
Talking about the current political scenario, minister of IT and communications Ponnala Lakshmaiah said, business is not affected by the political flux. It is done on fundamentals like economic viability, demands, accessibility and the competitive edge that is drawn by the inputs available in the State. AP has all these facilities and proved to be the most economic in the world after Indonesia and China. He points out that in spite of these apprehensions since the last two years, the office space occupied last year was more than the previous two years together. This shows that apprehensions are unfounded.”
Political condition will become a problem if the government does not take any decisions. That is not happening since the last eight years. If the apprehensions are right, the State would not have attracted `6,47,000 crore worth of proposals. “If the government is not vibrant, how can it number one in the country in terms of budget allocations and per capita budget? The developmental investment or plan investment is the highest in the country for almost seven years which touched around `53,000 crore this year,” Ponnala explained. IT honchos also share the minister’s stance. The location attractiveness index is counted in terms costs of operations, talent availability and business environment. The political scenario of the State comes under business environment which the companies check before venturing for hassle free operations. Every major conference is coming to the State because of its infrastructure and growth potential. The IT exports of the state grew to `41,000 crore in 2011-2012 from `35,000 crore in the previous fiscal. “The 17 per cent growth in IT exports aligned with nation’s average shows the performance of the State rather than my advocacy,” said V Rajanna, president, ITsAP.
But J Nageswara Rao, secretary, FAPSIA begs to differ. “Everything looks beautiful on paper but the reality is different. In every summit, the government says there are proposals, but we don’t see them materialise. The system and policy are not in favour of the industry which is filled with red-tapism and corruption. Every file has to pass through many steps to get cleared. If we bring this corruption to government’s notice, they ask for proofs.
For instance, the refund of subsidies for small scale businesses (sales tax, power bills and technology up gradation) valued at `400 core is on hold for the last two years. However, the small scale businesses have to spend huge money for debt servicing. Even for setting up a manufacturing unit, each acre of land costs `3-4 crore in an industrial estate. How can a small business procure machinery and raw material after spending huge costs on land? he questioned.
The businesses can not see any profits after debt servicing at 15 per cent interest rate and also increase in costs on raw material, power tariffs and property tax said Ramadevi, president, ALEAP.