A cornerstone of Telangana’s economic progress in the nine years, since the State came into existence in June 2014, has been the government’s impetus on industrial development through a series of enabling policy measures.
Looking back from the leadership position it commands and the reputation of being a State with progressive policies, everything it did to reach where it is today may seem a given. But, the road ahead was anything but smooth when the K.Chandrasekhar Rao-led government took the reins. An electricity crisis had already wreaked havoc for the manufacturing units, skeptics predicted a flight of trade and business, out of the State, and a subdued realty sector was looking for right directions.
The administration, however, lost little time to allay the apprehensions of the business community, went about sourcing power from private producers, and got down to framing policies, including the Telangana State Industrial Project Approval and Self-Certification System (TS-iPASS) that eventually emerged as a catalyst for attracting investments and spurring industrial growth. Ever since, 19,549 permissions have been issued under the TS-iPASS to new projects entailing total investments of over $30 billion and with a potential to generate direct and indirect employment for lakhs of people.
Stable government, able leadership under Chief Minister KCR and progressive policies, State’s Industries and IT Minister K.T. Rama Rao often asserts, remain factors behind Telangana emerging as an industrial powerhouse. Though the transformation translated into jobs, the government did not stop at that as it wanted the local youth to get preference and towards that, created the Telangana Academy for Skill and Knowledge (TASK). A master stroke, TASK helped address job aspirations and at the same time, ensured a pipeline of skilled candidates for firms investing in the State. The government also announced additional incentives for firms onboarding more local youth. Interestingly, the move came at a time when some States were insisting on firms hiring locals.
At another level, Telangana also identified a clutch of thrust areas, for attracting investments, and in doing so, also assured prospective investors that it will either meet or offer better incentives that they have been promised in other States.
A different policy approach apart, there are other benefits for investors to set up projects in Telangana — from availability of a large land bank, talent pool, efficient bureaucracy, maintenance of law and order, robust infrastructure, and most importantly, the central location of Hyderabad in the country. The State is also not new to industries, playing host for decades to the pharmaceuticals sector, defence research and development facilities as well as the IT industry.
The IT industry is the bedrock on which Telangana was able to attract some of the biggest names and host the largest tech development of leading firms such as Microsoft, Amazon, Apple, Salesforce and Medtronics, outside of their U.S. headquarters. If the rocky terrain of Hyderabad has morphed into swanky, glass-facade multi-storied structures housing the tech operations of hundreds of companies, many of them multinationals, it is also because of the emergence of the city as a competitor to Bengaluru on the back of affordable realty.
As more companies, especially those diversifying GCC network, look to Hyderabad, it has also put a strain on infrastructure.
On its part, the government has bolstered the infrastructure by developing roads, bridges and flyovers, operationalised Metro Rail and is proposing a high speed metro connectivity to airport as also an elevated bus rapid transit system. Separately, with promise of additional incentives, it is urging firms to look beyond West Hyderabad, the IT hub, to East and North Hyderabad parts and also encouraging them to consider tier II cities such as Warangal. The government has set up IT towers in many cities.
IT exports from Telangana stood at ₹1.83 lakh crore in FY-22 as against ₹57,258 crore at the time of the State formation. The IT industry in the State employs around 8 lakh people.
Realising the importance of encouraging innovation and entrepreneurship, the State government has been engaging with startups through technology ecosystem enabler and incubator T-Hub, hardware prototyping centre T-Works and WE-Hub for women entrepreneurship. The new T-Hub building it launched is the largest such globally, while T-Works has commitments of support from a clutch of leading firms, including electronics giant Foxconn, which has also selected Hyderabad to set up manufacturing operations.
On the manufacturing front, Telangana government is expanding Genome Valley, the life sciences hub near Hyderabad; developing a mega textiles park near Warangal; and consolidating on gains in defence manufacturing space. Keen on capitalising on emerging technologies and growing popularity of electric mobility, it has announced a mobility valley cluster, involving four locations.
For the land-locked startup State, which gives many industrially established States a run for their money, the game changer will be the implementation of the ambitious, integrated Hyderabad Pharma City project as well as the revolutions unfolding in the areas of food processing, dairy development, edible oil plantation and processing, aquaculture and meat processing.