Naidu wants Hyd to become a Financial Hub

Andhra Pradesh Chief Minister N. Chandrababu Naidu has announced the setting up of a high-powered committee to draft the blueprint for making this city the financial center of the country.

The committee, chaired by M. Narasimham, chairman of the Administrative Staff College of India (ASCI) and former governor of the Reserve Bank of India, will include on its panel, D. Narayana, chairman of United States-based Bank One International, Nimesh Kampani, chairman of J.M. Morgan Stanley, Ashok Soota, chairman of Mindtree Consulting and Ramesh Gelli, chairman and chief executive officer of Global Trust Bank (GTB).

Announcing this at the two-day "The India Finance Forum 2000" (TIFF), organized by the Confederation of Indian Industry (CII) and the state government last week, Naidu said the committee would help the government in its vision of making the state capital an alternative to Mumbai as the financial and insurance capital of India.

Wooing the more than 300 finance gurus present in the conference, Naidu said "Mumbai is overcrowded and it is better to move out to Hyderabad." He promised all help in terms of infrastructure and facilities wanting to shift to the city.

Supporting his appeal for investment in the state through a presentation on various ambitious projects outlined in Vision 2000 - "Andhra Pradesh - The Most Happening State," by R. Chandrasekhar, chairman and managing director of AP Infrastructure Corporation, Naidu highlighted that the state has the advantage of political stability and fast-paced administrative reforms, including electronic governance and cutting of red tape.

The fifth largest Indian state, Andhra Pradesh is also the fourth largest economy with NSDP of Rs. 720 billion ($16.7 billion). According to the Business Today survey 2000, the state, which was rated 22nd among Indian states in 1995-96, has improved to the 5th place in 1997-98 and has been found the third best place to invest in after Maharashtra and Gujarat. Andra Pradesh is among the four southern states that contribute to 75 percent of India's engineering graduates each year, and it produces the highest percentage (23 percent) of Indian IT manpower in the country.

The government is focussing on development of infrastructure in a big way, including reforms in power sector, such as corporatisation of the Andhra Pradesh Electricity Board into AP Transco and AP Genco and setting up of independent tariff regulaltory commission and securing World Bank assistance of $1 billion for carrying out such reforms, the presentation said.

Naidu announced that 5,000 acres have been identified in the city for setting up the Hardware, Logistics and Financial Services Park, which will offer comprehensive insurance services, back office operations and an incentive policy for IT-enabled services.

Other projects in the pipeline include privatization of 6 toll expressways connecting Hyderabad, Visakhapatnam, Kakinada, Vijaywada, Krishnapatnam, Tirupati, Machilipatnam and Chennai.

The government is also developing 12 ports in coastal region, of which three at Kakinada, Krishnapatnam and Vodarevu have already been privatised.

Upcoming airport projects include introducing regular and direct flights to the Middle East and Singapore from the state capital and building of a new international airport in Hyderabad.

The government also claimed that the city will soon be turned into the "health capital" of India, thanks to its well-established corporate hospitals and drugs and pharmaceutical industry, whose annual output amounts to Rs. 63 billion and annual exports touch Rs. 13 billion.

The government also invited investments for setting up various institutes of excellence, including the Indian Institute of Information Technology, Apparel Export Park, National Institute for Electronic Government, Indian School of Business, National Academy of construction, Institute of Banking Research Development and Technology, ICICI Knowledge Park, Bio-Technology Park, Export Promotion Industrial Park and the Jawaharlal Nehru Institute of Development Banking.

The state government is also planning a free trade zone in eastern seaboard on the Vizag-Kakinada belt, modeled on similar ventures in Dubai, Subic Bay and Singapore.

Also in the pipeline are tourism-related projects, including the International Conventional Center, India International Center, Imax Theater and Amusement Park, Ocean World, Music and Laser Show, Food Courts, Rail Bus, Night Safari and Family Entertainment Center.

Besides setting up the State Investment Promotion Board headed by Naidu himself, the government has formed the AP Infrastructure Initiative Fund for project development, structuring and managing the process of induction of private sector partner, and the Project Development Promotion and Partnership to coordinate various infrastructure funding organizations such as ICICI, Feedback Ventures, IDFC, HDFC and HUDCO.

The government also promised clearances and approvals for various projects within 30 days through single-window system.

Addressing the concluding session of the conference, Governor C. Rangarajan, former RBI chief, outlined the need for at least a seven percent growth rate for all-round development and asked the government to fashion policies to attract more foreign investments to supplement domestic resources.

Earlier, GTB's Gelli, who was chosen by the CII to head TIFF again in 2001, said the conference would go a long way in help the government achieve its objective of converting Hyderabad into a financial center. He said the government's efforts in turning the "bureaucratic state to business state" will help Hyderabad become the "knowledge hub."

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Andhra Pradesh Chief Minister Nara Chandrababu Naidu today announced that the setting up of a financial insurance park here soon as part of his government's plans to make this city the financial and insurance hub of the country.

Without elaborating on the park, Naidu said that the move was part of his government's efforts to develop Hyderabad as an alternative to Mumbai as the financial capital of the country.

Inaugurating the India Finance Forum 2000 (TIFF), Naidu urged the delegates to invest and set up firms and offices in the state, saying: "Mumbai is too overcrowded. It is the right time to start firms in Hyderabad, thanks to its political stability, infrastructure facilities and favorable investment climate. Do not miss the bus and regret later."

The inaugural of the two-day conference on "Financing India's growth in the new millennium," organized by the Confederation of Indian Industries (CII) and the state government, was also addressed by Peter Woicke, executive vice president of International Finance Corporation and managing director of the World Bank.

Appreciating India's "political will to undergo a truly probing examination of the health of its financial system," Woicke, however, called for more efforts toward reshaping the country's banking sector.

Addressing more than 300 chief executive officers and chief finance officers, economists and representatives of leading term-lending institutions, Ramesh Gelli, chairman of Global Trust Bank and chairman of TIFF, said the venue and timing of the conference was appropriate in view of the country's changing financial scenario and the Andhra Pradesh government's initiative in "turning a bureaucratic state into a business state."

Among other luminaries attending the conference were M. Narasimham, chairman of the Administrative Staff College of India, recently awarded with Padma Vibhushan, Krishna Palepu, a professor at Harvard University, D. Narayana, United States-based Bank One International, and Bimal Jalan, Reserve Bank of India governor.

Jalan sounded optimistic about the country's financial sector, saying that after witnessing 6-6.5 percent growth in the last decade, it was the right time to go into introspection about the future of the financial sector in the country. He, however, called for bringing more flexibility into interest rate structures.

Jalan said prospects of financial growth in India are "never better than now."