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Rs 950 Cr incentives on Rs 700 Cr investment: Why Chandrababu is so crazy about HCL?
Day in and day out, Chandrababu Naidu government is making futile attempts to attract investors. Most of the statements made by him that lakhs of crores of rupees are coming to the state by inking MoUs in partnership summits, has turned out to be 'bogus' ones.

Hopes about investments in the state capital Amravati by many countries including Singapore have also become castles in the air. Now, in view of the forthcoming elections, the state government is trying to display progress to voters by offering unasked favours to some big private companies. As part of similar attempts, the government has inked an MoU with the Hindustan Computers Ltd (HCL) Technologies.  State IT minister Nara Lokesh has announced that according to the MoU, the HCL Technologies Ltd. will invest Rs 700 crore in two phases and provide 5000 jobs. He hinted that the HCL is setting up its units with huge investments in Amravati because of its trust in Chandrababu Naidu's investor-friendly policies.


Indisputably, the HCL Technologies is a fast-growing company achieving the best results. HCL Tech. chairman Shiv Nadar is an idealist who by now spent about Rs 300 cr on Corporate Social Responsibility (CSR). He also announced on his website that he would spend an additional Rs 100 cr. in the next five years. Chandrababu appears to have showered much favours upon Shiv Nadar's company.  It was mentioned in the MoU that HCL Technologies shall invest Rs 700 cr in two phases in the coming five years in its units and also provide 5000 jobs. The state government is prepared to shower exemptions on the firm to the tune of Rs 970 cr. Sound it may as incredible, but the exaggerating figure was clearly mentioned in the MoU.


In the first phase, the state government will develop 28.96 acres of land (Kesarapalli village, survey no.20/2) near the Gannavaram airport abutting the NH, with full-fledged water, power and construction of  internal roads with entry and exit ways into it, and hand over to the HCL Technologies Ltd. with full entitlement. The HCL will purchase the land at a cost of Rs 30 lakh per acre.

In the second phase, the government will dispose of 20 acres of fully developed land to the HCL at the rate of Rs 50 lakh per acre, in a mutually acceptable area in Amaravati, with full entitlements. By the time the HCL tech. will set up its units the value of the land may go up to Rs 20 cr per acre. Supposing the acre cost to be Rs 15 cr (after reducing the estimated expenditure by 25 per cent) the value of the whole land will be Rs 750 crore.  In the first phase, the HCL may make payment of Rs 9 crore for the 29.86 acres of land at the rate of Rs 30 lakh per acre and take possession of the land.  Similarly for the second phase, the HCL may make payment of Rs 10 crore for 20 acres of land at the rate of Rs 50 lakh per acre. In the name of giving incentives to industries, the government is selling away lands worth about Rs 750 cr at a throw away price of Rs 19 crore. Here it must be noted that the lands were taken away by the government from the marginal farmers.

The exemptions episode will not end here!   It was mentioned in the MoU that 5000 jobs must be provided in the HL Technologies offices to be set up at Kesarapalli and Amaravati in the stipulated period. The state government also favoured the HCL in the name of one time employment incentive. The government will pay Rs one lakh to the company for each employee who joins the company. On these lines the government will pay Rs 5 crore to the 5000 employees. The government will pay Rs 5000 for a period of one year per employee which amounts to Rs 60,000 per annum for purpose of training the candidate to be eligible to the job. The administration will have to pay Rs 84 crore in the coming seven years for training 14000 students by training 2000 candidates per year.

As if this is not enough, the government has also committed to bear the burden of interest to some extent on the loans to be borrowed by HCL Technologies Ltd from banks. In the first phase, the interest burden to be borne by the government will be Rs 67 crore while it will be Rs 19 crore in the next phase. In all, the government is giving Rs 970 cr worth of exemptions and incentives to the HCL Technologies Ltd. But the matter of great concern is that HCL Technologies Ltd is investing Rs 700 crore only in Amaravati. The idea of the chief minister behind granting superabundant favours to the reputed IT juggernaut HCL to set up its shop in Amaravati might be that other IT companies would follow suit. Chief minister Chandrababu Naidu time and again boasts of having developed the IT industry in Hyderabad. Under such circumstances the IT companies are supposed to queue up in Amaravati to open their units. But the ground realities are quite different. In the changed scenario, the CM might be compelled to announce various exemptions and incentives to attract the IT companies to set up their units in Amaravati. The out-of-proportion incentives might benefit some IT companies but in future they might turn as 'white elephants' to the state.

Moreover mere incentives may not attract IT juggernauts. A classic example is of Indo-UK Healthcare limited which came forward to set up a 1000-bed hospital for which the government gave 150-acre land in Amaravati some time back. But till now, not a single brick was laid by the firm. Another annoying factor is that the government allotted 1691 acres as Amaravati startup area to Ascendas-Singbridge Consortium about one and a half year ago. But the company agents are not showing up here. There are umpteen instances of this sort in Amaravati.

Craziness about IT industries and huge investments at the cost of the key agricultural sector is the grave mistake committed by Chandrababu Naidu, which he needs to realise. As a result the net cultivable land is coming down instead of growing although the government had spent as much as one lakh ten thousand crore rupees during the last four and half years. The extent of food crops in Andhra Pradesh is gradually depleting. A socio-economic survey revealed that about 13 lakh acres of agricultural land in which food grains were grown decreased in 2018-19 fiscal year when compared to 2014-15 fiscal. This is the heart-rending trend in the state which once enjoyed the status of being called the 'Rice Bowl of Andhra Pradesh'.

Chandrababu government is claiming to have inaugurated five irrigation projects after it came to power. The government is shelling down hundreds of crore rupees on the power bills of the lift irrigation projects every year. The government needs to study the reasons as to why the ayacut is alarmingly decreasing instead of increasing, despite so called farmer-friendly steps being initiated by it.

As of now, the state is suffering losses because the government has ignored its priorities and viewing every work with political and partisan interests. Thus the hopes of the Telugus who thought that Chandrababu Naidu would put on track the derailed Andhra Pradesh state owing to bifurcation of the composite state, were shattered.

Editorial NOTE: This article is categorized under Opinion Section. The views expressed in this article are solely those of the author and do not necessarily represent the views of In case you have a opposing view, please click here to share the same in the comments section.
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