Business Today

Telangana is just one concern for businesses in Andhra Pradesh

While the uncertainty over Telangana hurts, the bigger worries now are the shortage of power supply in the state, the steep rise in power tariffs, the general industrial slowdown and rising interest rates.

E. Kumar Sharma        Last Updated: January 31, 2013  | 14:54 IST

E. Kumar Sharma
E. Kumar Sharma
Three years have passed since then Union home minister P. Chidambaram announced that the process of forming the state of Telangana would be initiated and an appropriate resolution moved in the Andhra Pradesh Assembly. The December 2009 announcement came at the end of an 11-day fast by Telangana Rashtra Samithi (TRS) President K. Chandrasekhar Rao. Since then, all eyes have been on the Congress high command and its response to this new pressure from leaders in the state, across parties.

However, today the industry sees Telangana as just one of the issues of concern. It sees other bigger worries emerging now. "While uncertainty hurts, the bigger worries now are the shortage of power supply in Andhra Pradesh, the steep rise in power tariffs, the general industrial slowdown and rising interest rates," says Devendra Surana, President of the Federation of Andhra Pradesh Chambers of Commerce and Industry. "In power tariff alone we are talking of a 250 per cent increase in three years, from Rs 3 per unit in 2010 to around Rs 7.50 per unit," he adds.

As far as the interest rates are concerned, says Surana, "industry today would need at least a two per cent reduction in interest rates immediately, as at around 13.5 per cent, it may not be sustainable for many". Industry insiders say they can perhaps live with an interest rate of 10 per cent but would struggle with any rate higher than that.

The uncertain environment has hit smaller units the most. Take the case of auto component manufacturers and precision-tool makers supplying large auto companies. Over the last two years, some of them have been forced to set up an additional unit outside the state to ensure that supplies do not get disrupted.

"We want the bill (on Telangana) to be introduced in the budget session of parliament because beyond the budget session nobody can guarantee that this government is going to last. The government really depends on support from Mulayam Singh Yadav (Samajwadi Party leader) and Mayawati (Bahujan Samaj Party leader), says K.T. Rama Rao, a TRS leader, who also happens to be the son of TRS president Rao.

Congress leaders from the Telangana region, however, see the current developments as an opportunity lost. "There was a growing feeling among the people of Telangana that the Congress party has almost taken a decision on Telangana. They were having high expectations and they now seem shattered. It is a setback," says Dr Gaddam Vivekanand, Congress MP and a doctor turned entrepreneur. "As a result, we (seven members of parliament) have decided to resign and hand over our resignation letters to the party president."

Not everyone agrees, T.G. Venkatesh, a Congress MLA from Kurnool (Rayalaseema region) and currently the minister for minor irrigation in Andhra Pradesh, feels there is huge public sentiment in favour of a united Andhra Pradesh.

Industry, meanwhile, will have to continue in wait-and-watch mode. For now, the uncertainty continues.

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