CM Chandrababu’s Generosity: Land, Sops and Flexibility for Corporate Giants
Did a company that is set to invest ₹1 lakh crore in two phases fail to pay upfront even for the 2,000 acres of land allotted at a subsidized price? The company requested payment in installments for that too. The government, under the leadership of Chief Minister Chandrababu Naidu, agreed, seemingly with a mindset of “Would we say no if you ask?” It's hard to say how favorable Chandrababu Naidu is when it comes to ordinary and middle-class people, but when it comes to industrialists and big contractors, he is always ready to give them whatever they ask for. He has long been in the habit of generously handing over state wealth and resources to private companies and projecting himself as a visionary leader in doing so. Even government officials were stunned after seeing the latest decision taken by the government.
Because this is not just any company—ArcelorMittal is worth several lakh crores. Another company, Nippon Steel, also has promoter wealth on a similar scale. These two companies have entered into an agreement with the Andhra Pradesh government to set up a steel plant in Anakapalli district with a total capacity of 1.75 crore tonnes, to be implemented in two phases. The total investment by ArcelorMittal Nippon Steel India Limited is said to be around ₹1 lakh crore. For the proposed unit, the state government has allotted 2,080 acres at a subsidized rate of ₹51.39 lakh per acre. In addition, the company has been granted several incentives, including SGST exemption for fifteen years. In simple terms, a massive incentive package was announced for this company. Not stopping there, the company has now written a letter to the government requesting permission to pay the land cost not all at once, but in multiple installments.
The company is required to pay ₹1,068 crore for the allotted land. In the first installment, it paid ₹450 crore. However, the government has permitted the remaining amount to be paid in three installments with 9% annual interest. Additionally, the company requested the removal of the compensation clause in the allotment letter, and the government approved that too. On top of that, permission has been granted to transfer the land to ArcelorMittal Nippon Steel’s subsidiary companies, with the condition that the main company must hold more than 51% stake in those subsidiaries. All these proposals were approved in the SIPB (State Investment Promotion Board) meeting chaired by Chief Minister Chandrababu Naidu on June 19. The official orders related to this decision have now been issued.
