Why some AP industrialists in Hyderabad are looking east

By T S Sudhir


Less than a month since the official division of Andhra Pradesh, many firms established in Hyderabad and in other districts of Telangana state are looking east. Owned by those from the coastal Andhra and Rayalaseema regions, their reasons to move out of Telangana however, vary. While some want to be part of the development process of the residuary Andhra Pradesh, others are smelling a good business opportunity if the new state offers generous tax incentives. Some others feel they will be short of opportunities in a Telangana state that will like to give preference to its own entrepreneurs.


Sanjay Devulapalli and Sai Ramesh started Malloc Solutions, an IT company, in Hyderabad in 2007. Sanjay is from Telangana while Ramesh is from coastal Andhra. Now with the borders redrawn, the partners have decided to branch out as well. The decision was also motivated by Ramesh’s desire to work out of Visakhapatnam, his hometown. So Malloc Solutions will now set up a unit in the city of destiny in addition to its operations in Hyderabad.


“We have been thinking about in the last three months since the elections happened. For me, it was a business decision. If the state of Andhra Pradesh is going to give some exemptions and encourage business, especially since we are into e-governance, we see an opportunity,” says Sanjay Devulapalli. “For me, it was most definitely an emotional decision to go back to Vizag,” says Sai Ramesh.


The reasons are different for Lakshmi Prasad, prinicipal consultant with Soham IT services. He feels he is being treated as a second-class entrepreneur in Telangana state. 


“Yes, we are also going for business reasons but there is an underlying emotional reason as well. I have studied in Nizamabad in Telangana and have been here since 1983. Yet I feel that the manner in which the state is divided, there is now a glass ceiling. The emotional factor is impacting our business. Even the clients are backing out and looking at us as Andhra companies and have second thoughts about doing business with us,” says Prasad.


A few entrepreneurs especially in the manufacturing sector, who did not want to be named, said a few Telangana clients are withdrawing orders, indirectly pushing those with Seemandhra roots out. What is worrying them also is the demand of the Telangana Joint action committee that is placing restrictions on the kind of labour they employ. Prof M Kodandaram, Chairman of the TJAC says, “About 70 to 75 per cent of the jobs pertaining to skilled and semi-skilled category should be reserved for local people. This includes operators and people below that.”


But not everyone is convinced that shifting to Andhra Pradesh at the moment is a good idea. IT honcho Raghu Sakuru says none of the cities in Andhra Pradesh compare in terms of infrastructure with Hyderabad and therefore, it makes little sense to move out of an established IT centre.


But the Chandrababu Naidu government is already gloating over the early gains, in terms of a spike in firms queuing up to register themselves in Andhra Pradesh. “Naidu has international image and is a brand. Industry has confidence on him about permission and law and order. That is why businessmen are more attracted towards Andhra Pradesh,” says C M Ramesh, TDP MP. Jitender Reddy, leader of the TRS parliamentary party pooh-poohs the claim saying Telangana is a new brand while Andhra Pradesh is an established brand. “These are teething problems in Telangana. It is a hare and tortoise story. They will do things in a hurry. We will do it slow and steady,” says Reddy. Telangana IT minister K T Rama Rao is already in overdrive, trying to woo industry to help the government add lustre to Brand Hyderabad. 


But just as Rome was not built in one day, Andhra Pradesh will face a long gestation period. Not just infrastructure, even quality manpower faces a question mark in Naidu land and that will prompt many from the state, working in Hyderabad, to stay back despite the problems. But the early flight of entrepreneurship, even if it is a trickle, is not something that will help Telangana’s brand equity.



About t s sudhir & uma sudhir

Uma Sudhir and T S Sudhir are senior journalists, based in Hyderabad. Both work for NDTV. Uma is a Tamilian, who was educated in
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One Response to Why some AP industrialists in Hyderabad are looking east

  1. Rambabu Thummala says:


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