Investor Sentiment Low, Jagan Destroying Andhra Economy: Former Infosys Director Mohandas Pai

Bengaluru: Since the Jagan Mohan Reddy government took charge in Andhra Pradesh in May, several policy decisions taken by the state have left a bitter taste among investors.

Be it the scrapping of the Amaravati Capital City Start-Up Area Project, a deal signed with a consortium of Singaporean companies, or the UAE-based Lulu Group saying it would not invest in the state, overseas as well as Indian investors are jittery about the future ahead.

“Reneging on the contract to develop Amaravati for ideological reasons is completely wrong,” said Mohandas Pai, former director at Infosys and Chairman of Manipal Group. "Why would overseas investors come here? Why would they trust the government anymore? I think Reddy is hell-bent on singlehandedly destroying AP and marring the future of the state.”

The Singaporean consortium, while stating that the deal was closed on mutual terms as the new government had “other priorities”, said the move cost the companies a “few million dollars”.

The Lulu Group had plans to invest Rs 2,200 crore by building an international convention centre, shopping mall and a five-star hotel. However, the YSR Congress Party (YSRCP) government decided to cancel the 13.83 acre-land allotted to it on the grounds that the previous regime, led by N Chandrababu Naidu, had given the land on lease at prices far below market rates.

“I would advise him (Reddy) to keep his promises and if he thinks something is wrong, then please investigate. But have an open transparent culture for the industry, failing which there would be any job for people,” Pai added.

Hitting out at the government for giving Rs 5,000 as honorarium to pastors instead of creating jobs, Pai said, “Those are not jobs, but grants. You must create jobs for young people who come out of colleges, because jobs are the most important thing for any state and if you destroy the confidence of investors, then nobody would come.”

With big investors pulling out and the YSRCP government on an overdrive to roll back deals initiated by Naidu, trust in the government is said to have reached a new low.

However, the present dispensation doesn’t seem worried and has brushed aside concerns of dwindling investor sentiment. Recently, AP Finance Minister Buggana Rajendra Nath told News18 there was “plenty of scope” for new investments.