Trade bodies brush aside as exaggerated the view in some quarters that the exposure of some major industrialists under probe by the CBI may affect the industrial climate and investor confidence in the State.
What is of real concern is the overall decline in the industry's performance in the country and Andhra Pradesh is no exception. It is a decline caused by the influence of the negative global economic factors, say FAPCCI representatives. Last year itself, the cost of capital was high. With the rupee depreciating further and imports becoming expensive, there is no capital available in the market. If the coming monsoon is unfavourable, the GDP may end up at the sub 6 level.
In the current scenario when many noted industrialists are under the CBI scanner, the investment climate will suffer a further setback. Yet, none can find fault with the investigation into these transactions involving quid pro quo. If rules have been flouted and some wrong done to larger public interest, the law must be allowed to take its course, industry sources say.
What one should really worry about is how many of the Rs.6.5 lakh crore investment proposals the State attracted in the Partnership Summit in January this year will materialise. From where will the capital come in the current depressing market scenario? they ask. The flight of capital is already happening with financial institutions pulling back investments across the country and added to this are the State's own political problems. “Does it have a robust system as in Gujarat to infuse investor confidence?” said an industrialist. Though it is ideal to keep industry and business away from politics, greater focus should be paid to see that no resource lies idle. There are several such non-starter projects with vast land allocations like the Hindujas power plant in Visakhapatnam and Ambuja Cement plant in Guntur.
Many power projects are struggling as coal imports are becoming expensive. About 3,000 MW of installed capacity is not being utilised for lack of gas. It is time indiscriminate land allocations were done away in the name of industrial corridors or Special Economic Zones, says a senior memberof CII.
Information Technology Minister Ponnala Laxmaiah also disagrees that questioning Ministers and bureaucrats over the alleged quid pro quo transactions would mar the State's inherent advantages or reputation as an investment destination.
“Investments come on the basis of demand, opportunities, viability of the enterprise and incentives the State offered. There is no change in the State policy and the system will take care of any aberrations that occurred in the past,” he said.
‘AP best'
T. S. Appa Rao, Principal Secretary, Industry and Commerce, claimed that the State remained one of the best industrial environments in the country. What is lacking is the absence of iconic industries in the auto sector and food processing to kick-start these sectors. If the State flourished in IT and pharma sectors, it was due to the presence of iconic companies.
The one drawback in the State was lack of strong entrepreneurial culture as in Gujarat. Here the tendency of the entrepreneurs was to look for quick returns, turning part of projects into real estate ventures.
Striking a note optimism, Mr. Rao said the State emerged as No.1 in terms of live investment proposals worth Rs.19 lakh crore in the last five years. Even if 30 per cent of them were grounded as per industry norms, the investments would be huge. Industry sources hope the present churning in the system and in the land allotment policy both at the Centre and State would bring in transparency and boost equitable growth.
