Sucheta Dalal :Neighbour's envy
Sucheta Dalal

Click here for FREE MEMBERSHIP to Moneylife Foundation which entitles you to:
• Access to information on investment issues

• Invitations to attend free workshops on financial literacy
• Grievance redressal


You are here: Home » Column Topics » The Rediff columns » Neighbour's envy
                       Previous           Next

Neighbour's envy  

November 29, 1999

Cyber Naidu, CEO of Cyberabad. Over the last three years, this image of Chandrababu Naidu has been so well cemented that nobody even remembers that this was the guy who started out by selling rice at Rs. 2 a kilo and imposing an economically disastrous prohibition on the sale of liquor in the State.

Naidu's savvy was not only in changing direction very quickly, but also in doing it so dramatically that, in the process, he has transformed Andhra Pradesh into a by-word for techno-savvy and sensible development. He has gone out of his way to lobby for industrial projects by virtue of instant decisions, eliminating red tape and sanctioning project locations and tax concessions at super speed. Naidu is the first Chief Minister to make the State a catalyst for change. Also he was so convinced about the correctness of his policies that, unlike the Narasimha Rao-Manmohan Singh duo who developed cold feet over a year before the elections, he refused to change track.

Until Naidu actually won, skeptics in the media as well as the opposition parties were convinced that development and technology did not win elections. Even today they seek to justify their predictions by splitting and analysing to death the voting pattern to claim that the result was merely a lucky outcome of the numbers game.

However, the significance of Naidu re-election is not lost on the neighbouring states. As Naidu goes about continuing to implement his agenda for the development of Andhra Pradesh there is a significant transformation happening in several of the neighbouring states.

For the last three years, the absence of a stable central government and the new shift in political power to the states had ended up with regional political powers clambering on to the populist plank. Today--with their finances a mess, development at a standstill, privatisation attempts gone haywire, and their treasuries bankrupt--several State governments are not only looking to the Centre for a dole but are finally realising that there is no alternative to sensible development and a pro-business environment. Take a look at the competitive response of Naidu's neighbours.

Karnataka: Chief Minister S.M.Krishna has been the most direct in his attempts to emulate Chandrababu Naidu. He wants to remind people that it is Bangalore, which was the original Silicon Valley of India. He has put together a high-powered advisory committee to tell him what to do. He has publicised his e-mail address and is holding consultations on infrastructure. But Krishna clearly has a tough job. The State reels from power shortages, poor infrastructure and a high level of corruption. One of the richest states in terms of its tourism potential it is also among the most neglected. Krishna has still to convince people that he really means business.

Maharashtra: This State used to be the number one destination for investment until it began to lose out to Gujarat. While it spent a lot of time refusing to admit that it is losing out, the State is quietly trying to recapture lost ground. At an Indo-US summit last fortnight, the State made a very slick presentation that was aptly titled -'Mahatrashtra --Potential.Com'. The State has surplus but expensive power. By end March 2000 it will also open the first Super Highway in the country built in record time and at half the cost originally estimated by the private sector. The State is now attempting to position itself as a Knowledge State by creating an Information Technology Corridor that almost runs parallel to the Mumbai-Pune Expressway and covers several technology parks with all the facilities required for the IT industry.

Simultaneously it is offering a vast range of very specific projects for investment by the private sector with locations and project costs already estimated. These include convention halls, helipads, jettys, ports, airports, entertainment centres, rapid transport systems and solid waste disposal projects. After having completed the Expressway as well as nearly 30 out of the proposed 55 fly-overs in record time, the State is also more confident about benchmarking costs. But Gujarat and Andhra Pradesh will always remain serious competitors.

Gujarat: The State claims in its promotional material that its feet are firmly planted on the ground; its turbulent politics has seldom affected its business development. It has developed what it calls 'The Gujarat Infrastructure Agenda: Vision 2010' which offers 383 very specific projects for private investment with an estimated investment of Rs 1,16,993 crores.

These cover power, ports, industrial parks, township development, gas grid, airports, water supply, sanitation and urban transport. There are also plans for an Internet corridor, the creation of information kiosks all over the State, and Internet connections to all high schools by 2001. The State is also offering tourist locations for development by announcing specific locations and projects, and has already worked out incentives to attract the hospitality industry.

Tamil Nadu: As far as Internet kiosks is concerned Tamil Nadu may steal a march over other states following the recent tie up between Reliance and Sam Pitroda's World Tel, which is expected to set up internet kiosks all over the State. The selling of Internet time like STD/ISD telephone calls will remove the access-to-technology barrier because of the high cost of the hardware.

Madhya Pradesh, Rajasthan and Goa are also trying to attract investment by announcing private sector participation projects in the State, many of them involving information technology initiatives or tourism development. But are the glossy brochures and slick CD-ROMs produced by various states credible? Why are these announcements any better than those made five years ago? After all, most states also came on a jaunt to Mumbai to invite businessmen five years ago. The difference now is that many states are already bankrupt and privatisation of specific infrastructure projects is their only hope for development.

Also significant is the Naidu effect. The recent Lok Sabha and State elections have sent the message that people are tired of political shenanigans: they are demanding development. Political parties who fail to understand this message and continue to depend on an intricate arithmetic of caste-based votes to regain power may be in for a nasty surprise. But it is also true, that there is a lot of empty rhetoric in the announcements.

A senior government official who has been consulted by several State governments because of his proven ability to create massive infrastructure projects makes the following assessment.

Andhra Pradesh, he says is by far the most serious about development and is going about the learning process in the most scientific and systematic manner. Gujarat is also way ahead in terms of its seriousness, but graft seekers is a serious problem. Maharashtra may seem serious--the new political coalition between the Congress and the National Congress Party has assured full support on continuing development, but its seriousness will always be overshadowed by the uncertain political situation. All other states can see the direction they need to follow but are not quite sure how to get there.

The good news is that the message from the masses is loud and clear. So implementation in whatever form is bound to follow.

-- Sucheta Dalal