No industrialist in the country invests in a state simply because of the Chief Minister's brand image. What matters most are the investment opportunities available in the state, the availability of human resources and raw materials, the local market, and the potential for exports and imports. Along with these factors, one of the most important considerations is the incentives and concessions offered by the state government. Ever since the days of the united Andhra Pradesh, offering industrialists land at throwaway prices and providing incentives beyond their demands has been Chandrababu's model. There is no doubt that Chandrababu is a favourite political leader among industrialists. On the other hand, there is a widespread perception among both industrial circles and officials that Chief Minister Chandrababu follows whatever the Confederation of Indian Industry (CII), an organisation comprising leading industrialists, recommends.
Chief Minister N. Chandrababu Naidu has announced that his government has already secured investments worth Rs. 30 lakh crore since coming to power. He also said that the CII Partnership Summit scheduled to be held in Visakhapatnam on November 12 and 13 would bring in investments worth more than another Rs. 10 lakh crore. The government is repeatedly claiming that all these investments are coming to the state because of its brand image. Chief Minister Chandrababu Naidu and his son, IT and Human Resources Minister Nara Lokesh, repeatedly claim that they have worked hard to secure investments and that all these investments are coming to Andhra Pradesh because of their brand image. If investments are indeed flowing into the state because of the Chandrababu-Lokesh brand, why are private companies being offered incentives that are unavailable anywhere else in the country? Why are IT companies being allotted land worth thousands of crores of rupees for just Re. 1, something unprecedented in the country? This raises the question of whether companies are coming to Andhra Pradesh because of the incentives and concessions being offered or because of the brand image of Chandrababu and Lokesh.
Another disturbing aspect is that more than half of the investments made by some companies will effectively be funded by the government in various forms over a period of ten years. Several companies have already been given excessive concessions in the name of capital subsidies. Claiming that industrialists should not suffer if there is a change of government by chance, Chandrababu has even announced plans to open escrow accounts for the payment of incentives. When industrialists express concerns about what would happen to them if subsequent governments refuse to honour the government orders issued by the present administration, the proposal to create escrow accounts has been brought forward as a solution. Chandrababu Naidu is now projecting this arrangement as a major achievement of his government.
There is widespread discussion among official circles that those in power are deriving substantial financial benefits by allotting huge tracts of land and offering excessive incentives to certain private companies. Officials have particularly pointed out that such practices are more prevalent in land allocations and incentive-related matters being handled from Visakhapatnam. In short, while Chandrababu and Nara Lokesh claim that investments are coming to the state because of their brand image, officials themselves believe that state resources are being handed over to private companies on an unprecedented scale through concessions and incentives that are not available anywhere else in the country.