Telangana tangle taking its toll on investments

HYDERABAD: Brand Hyderabad has come under sharp focus and it seems to be losing its sheen due to the continuing uncertainty over the Telangana statehood issue.From being the leading investment destination in the country last year, Andhra Pradesh this year failed to figure even among the top five states in drawing fresh investment proposals. The proposed investments in the State over the past three months reveal that the state is slowly but surely losing its investment appeal.According to data sourced from the Department of Industrial Policy & Promotion (DIPP), Ministry of Commerce & Industry, the number of investment proposals from various industries is witnessing a de-growth on a monthly basis.For instance, the State attracted 53 fresh investment proposals aggregating to Rs 13,584 crore in May, 2011, but the number reduced to 35 in June with the aggregate value slumping to Rs 10,428 crore. The following month, it further slipped to 23 new proposals totalling Rs 8,752 crore.“Existing companies are doing their bit to ensure business continuity despite frequent bandhs and other infrastructure issues such as power cuts. But our utmost concern is about the impact this ambiguity can have over future investments into the State,” Jaydev Galla, chairman, Confederation of Indian Industries (CII) AP region told Express.Interestingly, rival states such as Tamil Nadu, Maharashtra and Gujarat have been attracting a higher rate of investment proposals compared with AP. In April, 2011, AP was not even in the list of five leading states across the country, whereas Maharashtra and Gujarat led the pack with 53 and 49 new proposals aggregating to Rs 8,957 crore and Rs 7,175 crore investments respectively. Similarly, in March, while AP attracted 44 new proposals, Maharashtra received 125 proposals.“The industry is frustrated because of the uncertainty. This is not only hurting the operations of existing industries here, but also denting the future investment prospects of the state.If the situation continues, companies may not even consider the State as an option for investment,” said Y Harishchandra Prasad, MD, Mahalaxmi Ventures Ltd and past chairman, CII AP region.During the first half of 2010, AP was the leading destination and attracted the highest number of proposals surpassing Maharashtra, Karnataka, Gujarat and Tamil Nadu. In March, 2010 the State received the highest number of proposals at 57 involving an investment of Rs 48,560 crore while Maharashtra didn’t even figure in the top five states. AP once again led the pack in May, 2010 at 41 fresh proposals followed by Karnataka with 37.In April, AP attracted 53 proposals, which was higher than Gujarat’s 46 and Karnataka’s 29.Commenting on this, T S Appa Rao, principal secretary, Industries & Commerce department, said, “Industry is resilient enough and there’s not much disturbance for existing industries. But for future investments, there will be some impact. But we are doing our bit to ensure the Brand stays in tact.”