Though companies want to set up operations in the new capital, employees are not willing to move citing high cost of living and lack of recreation options.

Nara Lokeshs mission to turn Amaravati into an IT hub and why its an uphill task
news Opinion Saturday, February 17, 2018 - 15:51

AP Chief Minister N Chandrababu Naidu endeared himself as the poster boy of information technology and architect of Cyberabad, presently in Telangana. The cynosure of global IT majors like Microsoft, IBM and Google, it became the most happening city during his earlier stints in united AP. Cyberabad found an envious place for itself on the world map as the first IT hub in India and Microsoft set up shop in the Cyber Towers building soon after it was inaugurated in 1998.

Now, with Naidu at the helm again in the newly formed state, there are hopes of turning Amaravati into “Cyberavati”. His son Nara Lokesh, a Management Information Systems graduate from Carnegie Mellon University, was appointed the Information Technology Minister to give much-needed impetus to IT. But it appears that the hope of creating Cyberavati seems difficult in the near future, thanks to many a hiccup associated with the new capital.

For the first three years, the industry in the successor state suffered a policy paralysis with a greenhorn, Palle Raghunatha Reddy, heading the IT ministry. After the change of portfolio, Lokesh, with his communication skills and his father’s image, has been able to hard sell Amaravati as a preferred destination for IT from within and outside the country.

Lofty goals

Lokesh laid out a roadmap for the IT industry with a promise of creating 1 lakh jobs by attracting investments worth USD 2 billion by 2019. The minister also aims to achieve 5% share in the national IT exports. To accomplish the task, the government announced a slew of sops to the IT industry, such as plug-and-play space facility with subsidised rents.

As a result, leading IT companies like HCL and Google have expressed willingness to set up shop in the new capital. An IT park is proposed at Mangalagiri. Small and medium IT companies launched their operations in Mangalagiri, Autonagar in Vijayawada and Medha Towers near Gannavaram.

The goals set by Lokesh are lofty. IT exports in the truncated state accounted for just Rs 540 cr with 2% share in the gross state domestic product (GSDP) during the 2016-17 fiscal. Revenue accruals mainly flowed from Visakhapatnam and Kakinada with negligible performance in Amaravati. Thus, Cyberavati as conceived by Naidu is a miniature when compared to Cyberabad in terms of IT growth. Cyberabad with 20-30 global majors, each with turnovers in thousands of crores of rupees, accounts for 60% of Telangana’s GSDP.

Hurdles to success

What are the impediments that upset Lokesh’s apple cart? The reasons are plenty.

One major roadblock is the failure of Amaravati emerging as a swanky capital, similar to Hyderabad in the neighbouring state. The lack of social environment in Amaravati, and even in Vijayawada for that matter, plays spoilsport.

According to sources, Pi Datacenters had expressed willingness to set up shop in the IT park at Mangalagiri. But its operations failed to take off since its workforce was not willing to move to the new capital from Hyderabad. Same is the case with Google.

The reasons for the lukewarm response: the capital (not capital yet in fact, it just has an interim government complex with six blocks surrounded by villages and an expanse of vacant fields) has no outlets for recreation and entertainment as is the case with other metros like Hyderabad and Bangalore; soaring cost of living with house rentals shooting through the roof; no hospitals and no schools worth mentioning; lack of state-of-the-art incubation centres for producing skilled manpower, so on and so forth.

Housing is one of the major problems. Strain on rented houses increased manifold due to an influx of people from Hyderabad and other places within and outside the state for work after the capital relocation. The migrations resulted in a huge demand-supply gap in houses, necessitating the need for the government to take up housing on a massive scale in the capital region.

Susanth, a PR professional, told TNM, “I am sharing a double bedroom accommodation with another person, having to pay a monthly rent of Rs 35,000 at Tadepalli, a village on the periphery of the capital.” In Hyderabad, one can get a house on rent for Rs 15,000-Rs 20,000 even in the heart of the city. So the kind of rent he pays in Amaravati area is quite unfair, he rued.

Restaurants at Velagapudi, where the temporary Secretariat is located, charge Rs 160 for a meal which is very high.

Absence of infrastructure

In fact, the Naidu government too has to come to grips with the logistics problems. The government induced its employees with a 5-day week to move to the new capital from Hyderabad. But the capital project is failing to happen since the bifurcation for want of funds. Even basic facilities are lacking. Funding for the capital is one of the reasons for the straining of relations between the state and the Centre.

It became a paradise lost for the successor AP since Hyderabad went to Telangana after the division. Naidu is straining hard to build a world-class capital in Amaravati.

On the contrary, Visakhapatnam holds more promise with its cosmopolitan culture, the presence of a naval base and steel plant, and natural beauty. The first phase of the Millennium Tower is nearing completion at Rishikonda. IT majors such as Google X and Conduent have committed to launch operations in Visakhapatnam. Fintech Valley, which focuses on the convergence of finance and technology, was launched in the city a year back.

Industry representatives call for equity in IT growth. An industry representative, requesting anonymity, accused the state government of unduly tilting its focus in favour of Amaravati for IT growth just to boost real estate values in the capital region.

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