Ashish Gupta | Fortune India | May 8, 2019
For a 68-year old, Andhra Pradesh chief minister N. Chandrababu Naidu is super fit. With time, maybe the grey in his hair has more salt than pepper, his cheeks have become a bit hollow, yet he stands tall and straight. Naidu, who as chief minister of united Andhra Pradesh from 1995 to 2004 was the catalyst that made Hyderabad the wonder that it is today, still clocks 16 hours at work.
In 2000, Time magazine named Naidu South Asian of the Year for turning Hyderabad, which it described as “an impoverished, rural backwater place”, into “India’s new information-technology hub”. Nearly five years after becoming the chief minister of the residual state that bears the name but without the city he helped transform, Naidu has been hard at work trying to repeat the magic. Only this time it is harder, for Amaravati, the capital city of the new state, is being built from scratch on the southern banks of the Krishna river in Guntur district. Hyderabad was already the capital of united Andhra Pradesh when Naidu first became chief minister.
Naidu and I are sitting in his stately house, which overlooks the Krishna, discussing the past, the present, and the future of the state. Of the past, he is still smarting over the raw deal given to the state by the central government. He believes that the bifurcation on June 2, 2014, that created Telangana and the residual Andhra Pradesh was done in a most “unscientific, irrational, and arbitrary manner”. He is angry, too, but more hurt because the National Democratic Alliance (NDA) government, of which his Telugu Desam Party was a part, went back on its promise of giving “special category status” and other financial exemptions.
The present? Not so good. The revenue deficit of the state has risen to nearly ₹24,000 crore. It was ₹16,000 crore when Naidu came to power in 2014. Naidu says the central government’s step motherly treatment of the state has not helped matters. Since quitting the NDA in March 2018, his party has been a strident critic of the Bharatiya Janata Party and the central government. “I know it is a risky strategy,” says Naidu. A lot rides on the results of the general election and elections to four states, including Andhra Pradesh, from April 11 to May 19.
The future? Not that bad, according to Naidu. He believes Andhra Pradesh can become the No. 1 state by 2029 in every economic parameter, including the happiness or satisfaction index. Sensing my disbelief, he points out that in the past five years his state has achieved an average GDP growth rate of 10.52%—higher than the centre’s average of 7.1%-7.2% and higher than many developed states.
How does he plan to do it? Naidu’s vision is to convert a largely agrarian state into a future-focussed, technology driven economy in tune with the needs of the 21st century. “You want to know how I am implementing my vision?” asks Naidu. You know the answer to that. Technology. As Naidu elaborates, you learn he is talking specifically about big data, which lies at the heart of governance in the state. “If one has the right historical and current data, one can predict and execute things much better for individuals and the community because outcomes will be closer to expectations,’’ he says.
You can get a glimpse of Naidu’s vision at the Real Time Governance Society monitoring centre housed in building No. 1 of the government secretariat in Amaravati. The monitoring centre is straight out of a Hollywood sci-fi film. On one side are giant screens, or dashboards, with constantly flashing images, videos, and data monitored by a few dozen people. These dashboards provide real-time data on the status of government welfare schemes and important government projects; road traffic; deaths, marriages and births in households; first information reports filed at various police stations; and even files signed by officials and ministers. Similar centres are present across the state.
“We have linked all the 240 government schemes across 30 departments and created 560,000 combinations, which help us resolve issues and grievances of people on a real-time basis. It is our way of breaking down the silos of various departments and bringing everyone together on the basis of data,” explains A. Babu, chief executive, Real Time Governance Society.
To understand the scope and importance of data, consider the following. On March 1 the government had full data on its 44.9 million citizens across 123 parameters; it had 2,000 video cameras tracking vehicles and traffic violations, 2,000 government officials conversing with 3 million people in the state to solve their grievances and issues. Babu says the government has got 18 million complaints over the past four years.
So if a person complains of a power cut anywhere in the state, the problem is resolved within minutes because the control room has all the data of the beneficiaries. It also has data on those responsible for the power supply in that particular geography. When the issue has been resolved, calls are made to the complainant to find out whether the work has been done to their satisfaction. Collation of data and tracking it has helped the government weed out 7.4 million fictitious names from the public distribution system, saving the state exchequer ₹1,500 crore. The process has also helped add a deserving 2.7 million beneficiaries.
Even for the tech-savvy Naidu, transforming a largely agrarian economy into a knowledge-based one is fraught with challenges. It is not just about setting up a state-of-the-art capital with information technology parks, quality residential facilities for knowledge professionals, commercial spaces and shopping malls, academic institutions, and transport facilities. The success of the city and the state will be measured by investments from top global companies that it draws. This was the case in Hyderabad where the IT sector and the outsourcing industry flourished through Naidu’s persistent wooing of major tech companies such as Microsoft, IBM, and Deloitte. “Bye-bye Bangalore, Hello Hyderabad” was his sales pitch then. “He wants to build a state-of-the-art capital at Amaravati that will go down in the annals of history as a unique facility for future generations,” says P. Krishnaiah, a former IAS officer who has worked with Naidu for many years. Any other chief minister would have set up a secretariat and a few other government offices in the developed cities of Guntur, or Vijayawada, but not Naidu, he says.
Naidu wants the 217 sq. km. Amaravati to set the standards for smart cities in India—a truly global city that will draw top global firms to set up base there. Roads and water supply will be like in Amsterdam; power supply as in Germany and the U.S.; and the “green-blue” city—called so for the 51% green cover and 10% water bodies it will boast—will have storm water management matching that in the U.K. and Malaysia. B
But such ambitious project comes with a cost. Building infrastructure is expected to cost the exchequer ₹1 lakh crore-₹1.2 lakh crore. “We have already borrowed some ₹4,000 crore from various sources like banks, Housing and Urban Development Corporation, and ₹2,000 crore through a 10-year bond at 10.32%,” says Naidu. However, raising funds remains a challenge. The state government plans to borrow another ₹6,000 crore to ₹7,000 crore. The Centre has only given ₹4,000 crore till now, he says.
To overcome the challenge of land acquisition for building Amaravati, the state went in for land pooling. Farmers who gave up their land were offered a 10-year annuity package. “We have made farmers shareholders in the development process in the new capital, without evicting them from their habitations,” says Naidu. The annuity amount will not only increase 10% every year, but farmers will also get back a part—nearly one-third—of the developed land, which they can sell in the next 10 years. Of the 34,000 acres of land pooled, the state will keep 6,000 acres. The rest will be returned to donors. “Farmers with the most fertile land will get back 1,000 sq. yd. for residential purposes and 450 sq. yd. for commercial purposes for every acre of land given,’’ says C. Kutumba Rao, vice chairman, AP State Planning Board. Similar packages were announced for other farmers with not so fertile lands, too. Within two-and-a-half years, land which was selling at ₹10 lakh an acre has begun to fetch ₹2 crore. “So if the farmer decides to sell the developed plot, he can make a lot of money,” says Rao.
Major manufacturers have shown interest in setting up shop in the state. Holitech Technology Company said in August 2018 that it will invest ₹1,400 crore to set up a component manufacturing facility for Xiaomi India in Tirupati. “Today 20% to 30% of all mobile phones are being manufactured in AP, I want it to go up to 50% to 60%,” says Naidu. Reliance Industries has announced an electronics park for making mobiles and televisions in Tirupati; electronics manufacturers Foxconn, and TCL Corporation, too, have plans to invest there.
The state is already building an ecosystem for the automobile industry by attracting investments from Kia Motors, Ashok Leyland, Euro Motors, Apollo Tyres, etc. To attract Kia Motors, the government decided to waive the state goods and services tax (SGST) for the company for 22 years. “By forgoing so much tax revenues, I am able to create an automobile ecosystem in Amaravati, which has not only brought in a host of ancillary industries but also created jobs for hundreds of people,’’ explains Rao.
Rao also believes that the long coastline of 972 km gives the state (which has the country’s largest offshore gas fields) an opportunity to go in for port-led development like a pharmaceutical ecosystem and a petrochemical complex. Early this year, the state signed a memorandum of understanding with Haldia Petrochemicals to build a refinery and petrochemical project in the Kakinada SEZ. The investment outlay is ₹60,000 crore. Rao says not only has the state waived the SGST, but it has also taken a 15% stake in the new venture.
The state government is looking at attracting top educational institutions in the country. In January, Naidu laid the foundation stone for XLRI-Xavier College of Management. The 50 acres of land in Inavolu in the AP Capital Region where the college is to be built was given at ₹10 lakh per acre. This will be the first XLRI college in south India. Similarly, land has been given to the SRM University and VIT University at low rates. “While these universities will create an ecosystem for academics and research, we can then charge higher rates from other universities, which want to set up base here,” says Rao.
Perhaps the most grand structure in the masterplan of Amaravati—designed by the renowned Norman Foster of Foster+Partners—is the new government complex at the heart of the city. The building, the wide circular roof of which tapers into the shape of a needle as it goes up, houses the legislative assembly and the high court besides several secretariat buildings. Further south from the banks of the Krishna river are 13 urban plazas, signifying the 13 districts in the state. Means of transport in the city will run on electricity. There will be water-taxis, dedicated tracks for cyclists and well-shaded pavements, encouraging people to walk. The green pockets in the city are modelled on New York’s Central Park and Lutyens’ Delhi. There is a 7.7 sq. km. off-site solar array (a combination of several solar panels) and rooftop panels on buildings to light up the city. When Naidu pitched this grand vision of ‘Tomorrowland’ it looked like a tall task to many. Naysayers said that he was going overboard, doing too much to create his legacy. But Naidu has never been one to be perturbed by criticism. It would have been ideal for Naidu if much of Amaravati, which means the city of immortals, had been completed well ahead of the assembly election in April.
It would have made a big difference at the hustings. But matters have not progressed smoothly in building ‘the people’s city’. The reason? Lack of funds. Rao says that a 3% of GDP borrowing limit set by the Fiscal Responsibility and Budget Management Act, 2003, is slowing down work. The government plans to raise ₹8,000 crore in the coming months. Design changes added to the delay. Only 16% of the total construction has been completed till now. Projects worth ₹50,000 crore are underway. Amaravati is expected to be built by 2025 and the AP Capital Region, which comprises parts of Guntur, Vijayawada, and Tenali, by 2028.
Despite the delays in the Amaravati project, Naidu hopes people still believe in his vision. As he pursues his vision of a smart state, he has taken care that the common man and the farmer are not overlooked. His oversight in reassuring them as he transformed Hyderabad was what caused his unexpected defeat in the assembly polls in 2004.
Now, besides the benefits of the land pooling scheme for farmers who gave up their land, Naidu has a host of welfare schemes for the needy. There is the NTR Bharosa Pension scheme which gives ₹2,000 per month for senior citizens and the infirm. Nearly 9.3 million women will get ₹10,000 in three instalments under the Pasupu Kumkuma scheme. Around 400,000 without jobs are beneficiaries of the Mukhyamantri Yuvanestham scheme under which they receive skill development and apprenticeship besides a monthly allowance. Under the NTR housing scheme, the government plans to build 3 million houses at the cost of ₹80,000 crore. The government has built 870,000 houses and hopes to complete the project by 2022 and make “Housing for All” a reality in the state.
Whether Naidu gets to complete the task he has undertaken remains to be seen.
