Telangana grabs global investors’ attention

Telangana grabs global investors’ attention

By S. RAMA KRISHNA | HYDERABAD | 31 December, 2017
PM Narendra Modi takes a ride in the Hyderabad Metro along with Governor E.S.L. Narasimhan, Telangana Chief Minister K. Chandrashekar Rao and Municipal Administration, Urban Development and IT Minister K.T. R Rao, after its inauguration in Hyderabad. IANS
Factors like pro-business reforms and an industry friendly eco-system have placed the state on par with, if not ahead of, several other financial hubs in the country.

Two recent major events —the successful conduct of the 2017 Global Entrepreneurship Summit (GES) and the launch of the first phase of the Metro Rail in Hyderabad in the last week of November, have greatly enhanced the image of Telangana, the newest state in India, in the eyes of global investors and entrepreneurs. Of course, these two events haven’t happened all of sudden.

The website of the Industries department of Telangana has a flier picture of its Industries Minister K.T. Rama Rao (KTR) moderating a session on the second day of the GES on 29 November, flanked by US President Donald Trump’s daughter and adviser Ivanka Trump, former UK premier Tony Blair’s wife Cherie Blair and ICICI bank chair Chanda Kochhar, and tells us half of the story of Telangana’s revamped image.

The other half of the story is told to us by pictures in other departments’ website where Prime Minister Narendra Modi is flanked by Telangana Chief Minister K. Chandrasekhar Rao (KCR) and his son, KTR, on the inaugural ride of Metro. KTR explained the salient features of urban infrastructure in Hyderabad that has now became a destination for many MNCs.

A lot of spade work has gone into them and a host of factors, including pro-business reforms on the one hand and industry friendly eco-system creation, on the other hand, have played a role in placing the state on par with, if not ahead of, several other financial hubs in the country. But, what gave Telangana the cutting edge over others is its proactive measures to promote industry and make business flourish.

As KTR said at the GES, meticulous moves to make it simple to do business in the state have begun right from the formation of the TRS government headed by KCR that also coincided with creation of Telangana state, on 2 June 2014. It shows that the government hasn’t wasted a single day without planning to boost trade and commerce.

An innovative policy of self-certification by aspiring industrialists with a specific timeframe to issues permits for setting up their units and commencing business, TiPASS, has caught the imagination of industrialists and investors from all over the county as well as the world. 

Though Telangana is competing with enough administrative muscle as compared to other states, it stayed on in the race to woo investments. Supply of uninterrupted power supply and drinking and industrial water and ensuring road connectivity and better law and order and deployment of a huge land bank with around one lakh acres for new ventures and improving the quality of engineering and other professional colleges are some of the backup moves that pushed the state to the list of destinations for investors.

The award of No 1 rank in Ease of Doing Business (EoDB) among states in India in 2016 is a major milestone for Telangana. There are bigger players like Gujarat, Maharashtra and Tamil Nadu which had mastered the art of attracting businesses, but still Telangana stood top on the EoDB rankings, mainly due to its priority on transparency and simple procedures, of fewer interfaces with the bureaucracy.

Prime Minister Narendra Modi and US President Donald Trump’s daughter and advisor Ivanka Trump at the Global Entrepreneurship Summit 2017 in Hyderabad on 28 November 2017. Also seen is Mitra, an indigenous robot. IANS

All these factors combined to create a positive impact about Telangana among business leaders and the investors’ community. Setting up of the world class T-Hub, where India’s largest number of startups is going to be housed soon and its separate policies for Information Technology, Internet of Things, gaming and robotics etc have added another advantage to its industrial policy.

In its latest study, business body Assocham has said that the investment growth rate in Telangana during the last three years between 2014 and 2017, has been 68.5% compared to the national average of 20.8%. This proves that the pro-industry image of Telangana is not an overnight miracle, but a result of sustained efforts in the last three years.

Releasing the findings of a study—“Telangana: Economic Growth and Investment Performance”—in September in Hyderabad, Assocham national secretary general D.S. Rawat and senior managing committee Babu Lal Jain said that Telangana had attracted total outstanding investments worth about Rs 5.9 lakh crore as of March 2017. For comparison, Telangana, which was one of the three regions in undivided Andhra Pradesh, secured Rs. 3.3 lakh crore worth of investments as of March 2012. 

Telangana accounted for 3.3% share in total investments worth Rs 177 lakh crore attracted by the top industrial states across India for 2016-17, said the study by the Assocham Economic Research Bureau. In terms of year-on-year growth in investment, Telangana (as part of Andhra Pradesh) had seen a 0.6% growth in 2012-13 and 5.6% in 2013-14. 

The growth in investment was 24% in 2014-15 (after the state’s bifurcation), 22% in 2015-16 and about 12% in 2016-17. Over a fourth of the total investments attracted by Telangana are in the irrigation sector (28%) as of March 2017. It is followed by non-financial services (25%), electricity (18.5%) and manufacturing (11%). About 370 projects with investments worth about Rs 4 lakh crore of the total investments attracted by the state are under different stages of implementation, said the study which analysed multiple growth parameters.

The study said that the state’s economy accounted for over 4% share of the gross value added (GVA) across India as of March 2017. It said Telangana has outperformed the national average in terms of economic growth. The state recorded 8.5 % growth in 2016-17 compared to the national average of 6.6% during the same period. Agriculture recorded about 15% year-on-year growth in 2016-17 after registering an over 6% in 2015-16. It had shown a negative growth of 10% in 2014-15 due to deficit rainfall.

In services, the state recorded a 10% growth in 2016-17 compared to 8.4% (in the region as part of AP) in 2012-13. The state’s industrial growth was 10% in 2015-16. “The state is doing well in terms of growth. However, sustaining the growth will be a challenge and that should be the focus,” said Rawat. Fast tracking irrigation projects, improving productivity and yield in agriculture through public-private partnerships and developing industrial sector will be key. 

The state should design policies to lure investments in biotechnolgy, solar energy, tourism to generate more employment opportunities for the youth, he suggested. Assocham’s appreciation is just one aspect of the story. Other trade confederations like Nasscom, apex body for the $180 billion IT and BPO industry, too, predicted a steep hike in IT exports from Hyderabad, making it one of the best destinations for software sector and outsourcing sectors in the country. FICCI and CII, too, have chosen Hyderabad and Telangana for their growth plans. The successful conduct of GES and the presence of US President Donald Trump’s daughter and adviser Ivanka Trump have immensely helped the state access to a range of world class investors and venture capital fund managers. KTR has said that Telangana, with a slew of new infrastructure projects underway, is going to the preferred destination of global investors and business leaders.

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