Obduracy imperiling AP’s future

The AP government got off to a dream start by reiterating its commitment to fulfilling the promises which helped YSRC trounce the incumbent Telugu Desam and win the Assembly with a majority. N. Chandrababu Naidu lost power because of corruption and his failure to deliver on promises like building a capital, developing industry and creating jobs.

The first step of setting up a judicial review of contracts, where the CM requested the High Court to nominate a sitting or a retired judge to oversee new government contracts valued over Rs 100 crore, was cheered by all. But with 11 cases under CBI and ED investigation, it was never going to be easy for Reddy to remain spotless. His only hope was to tar Naidu enough to appear relatively cleaner. This led to early floundering: misinterpreting the mandate and allowing transparency to turn into political vendetta against Naidu.

Waging a defiant war against the power purchase agreements and PPP contracts on the three biggest areas of Naidu’s thrust — the capital city of Amaravati, the centrally-funded multi-purpose Polavaram project, and the building of a renewable energy industry basewith a plethora of wind and solar power projects — Reddy is inviting an economic mess and a legal tangle for the State, and a political minefield for himself.

Though a businessman himself with commercial interests in unconventional power projects in Karnataka, Himachal Pradesh and Sikkim, the CM seemed unaware of how his behaviour was perceived.

The demolition of a public utility building, Praja Vedika, on the justification that it was an ‘illegal construction on the river bed’, appeared petty. Confiscating it for public use would have been simpler.

The judicial stay on the cancellation of contracts to Navayuga is an early signal for him to course-correct, but that would mean making a u-turn on the very accusations that brought him to power.

Jagan is nothing if not obstinate. A central government official had to formally advise him against cancellation of contracts; but even a Union Minister’s pubic chiding made no impact on Reddy, confirming a perception about him as “no-listen, no rethink”.

With over Rs 40,000 crore of investments in renewables alone, if Reddy wishes to spend more time in courts than at global investor meets, the winner won’t be AP. If he wishes to confront the Centre it will play out worse. The silver lining is that the state is only looking to review those projects where there is prima facie male fide action.

With 75 per cent reservations for locals in private sector jobs, the promise of a total prohibition in phases, an ever-increasing fiscal deficit, growing welfare budgets, little investment and revenue-enhancing moves, the possibility of a huge augmentation of partisan polarization with underlying caste-communal biases through village volunteer program, a possible confrontation with the Centre, the exit of investors, and the spoiling of AP brand — Reddy’s first act leaves little doubt that the State’s economy will pay the price for inability to heed wiser counsel.

Ramesh Kandula is an independent journalist based in Hyderabad