Competitive federalism, southern style

Andhra Pradesh’s success in clinching big-ticket deals like Google's $15 bn investment in Visakhapatnam has sharpened competition and political sparring among southern states vying for marquee projects. Archis Mohan & Shine Jacob write

- Archis Mohan & Shine Jacob write

In June, when Aruna Urs — cofounder of Mysuru-based craft rum distillery Huli— took to social media to vent his frustration at the Karnatakagovernment’s decision to hike the distillery licence fee by 50 per cent, hedidn’texpectacall from across the state border.

Within days, officials from the office of Andhra Pradesh’s Information Technology and Real TimeGovernance minister, Nara Lokesh, son of Chief Minister N Chandrababu Naidu, reached out to him. They promised a “tailormade excise policy” anda suite of incentives, if he would move his micro-distillery to Andhra.

Urs chose to stay put. But Andhra’s overture was no oneoff. The Naidu government has been relentless in its pursuit of investment, with Lokesh energetically courtingcompaniesto relocate from neighbouring states, astrategy thathasruffled feathers in Tamil Nadu, Telangana and Karnataka, and sparked social media spats, most recently between Lokesh and Karnataka’s IT minister, Priyank Kharge.

Last Wednesday, the Andhra Pradesh government announced that it had approved two major investments by the Raymond group, worth %940 crore, in aerospace and automotive manufacturing. The projects, tobesetupin Sri Sathya Sai district, are expected to create 5,500 direct jobs, including some relocated from Karnataka, according to state officials.