Telangana agitators hit brand Hyderabad

Participating in the recent Vibrant Gujarat summit at Gandhinagar AP officials tried to assure potential investors that the political unrest in the state would end gradually. But not many share their optimism. There is a growing concern on the adverse impact the political turmoil is likely to make on the state’s development. 

In his last year’s budget presentation former Chief Minister K Rosaiah said agitators had destroyed Rs.100 crore worth of public property. The revenue generation in the first quarter of 2010 fell by over 25 per cent and till the first half of this fiscal, the government had been unable to mobilise adequate resources to fund development programs.

 “Worst hit were the tuition fee reimbursement, Aarogyasree and Jalayagnam programs,” said the former chief minister K Rosaiah in a talk with a few reporters recently.

 The Srikrishna report stated 128 projects worth Rs 61,971 crore were under various stages of implementation in and around Hyderabad. Two hundred and twenty three projects, worth Rs 1.87 lakh crore, have been announced, but yet to take off. Any further unrest in the region would derail these projects, say many.

Sorry state of affairs

Hyderabad’s flagship IT industry further reflects the sorry state of affairs.  AP contributes 15 per cent of national IT exports. It also boasts a strong presence of all marquee Indian and MNC technology firms: TCS, Infosys, Wipro, HCL, Mahindra Satyam, Cognizant, Patni, Tech Mahindra, Sonata, Microsoft, Google, IBM, Oracle, DELL, Motorola, Deloitte, Convergys, UBS, Bank of America, HSBC, Honeywell, Siemens, JP Morgan, UHG, Face Book and so on.  “Agitations may affect infrastructure investment and hiring in the state and bring down the industry growth,” said J A Chowdhary, chairman of IT in the AP chapter of  CII .

The growth from 2008-09 to 2009-10 has been marginal. As against  the software export of  Rs.32,500 crore and employment of 2,51,786 software engineers  in fiscal 2009,  the  state clocked  only  Rs.33,482 crore in exports and 2,64,375 jobs last fiscal. It is projected that the export earnings during the current year would touch Rs.36,000 crore. “We could have achieved this figure last year itself, had it not been for the unrest, “said L Suresh, who heads Hyderabad Software Exporters Association (HYSEA). 

The past agitations have taught companies to be on their guard. Metal nets, 24x7 security network, fool-proof  monitoring systems have been introduced  at all IT companies. Many of the global giants have begun to implement Plan-B and started allocating projects to non-AP centers to avoid interruptions.  “We have to ensure delivery to our clients, which is cause for worry in an agitation-ridden environment,” said a spokesman of the HYSEA.

Future uncertain

The staunch Telangana advocates have made Andhra and Rayalaseema businessmen jittery. There is also a growing fear among businessmen from other states, who feel the agitators may eventually target them as well.   There are also questions over the policies the new Telangana government may follow, if it ever comes into being. “We are not sure if the new government would allow us to move around the wealth generated here or demand us to invest within the new state,” said a Gujarati entrepreneur with interests in oil, fan, and electrical businesses.

All major industries – software, jewellery, apparel, tobacco, education, transport - are now controlled by the non-Telangana businessmen, a major cause of heart burn among the Telanganites.

Thanks to erratic supply of water and power,   Hyderabad lost its sheen as a manufacturing hub two decades ago and yielded ground to Medak, Anantapur, Visakhapatnam and Nellore districts. Now, there is a possibility that the agitators may trigger an exodus of services companies from the city.

 While discussing the economic woes arising out of Telangana agitation, K Rosaiah had said last year: “The greater loss is the loss of credibility and business confidence.” That seems to aptly sum up, the business mood in the state.

Mr Venumadhav is a Hyderabad-based freelance writer. 

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