The self-styled CEO of Andhra Pradesh Inc, Chief Minister N. Chandrababu Naidu, has spent the past seven years trying to convert the state into India's cyber capital. Few chief ministers have made as many overseas trips and met as many heads of government and corporate honchos as Naidu has. Fewer still have impressed them as Naidu with his spiel on the merits of choosing Andhra Pradesh as an investment destination. The chief minister has exhorted foreign investors with unmitigated enthusiasm to be part of the "exciting transformation" his state is undergoing. But for all the hype and aggressive sales pitch, there is not much to show on the ground.

FREQUENT FLIER: In the past seven years, no chief minister has travelled as often to as many countries to secure foreign investment as Naidu. The quesion is on how productive these were.

This is why Naidu's political opponents are accusing him of "misplaced priorities" that have made the state suffer heavily. In the nearly seven years that Naidu has been in office, he boasted of investment inflow of about Rs 1,11,000 crore. The actual inflow has been just about a tenth of that. Even in software exports, Andhra Pradesh's share is only Rs 2,500 crore of the country's total Rs 37,500 crore, while the Human Development Index slots Andhra Pradesh at a lowly No. 10 among Indian states.

"Naidu has failed to enhance credibility because of a muddled investment policy that does not give the state a headstart in any sector. He has done precious little to develop infrastructure beyond cosmetic touches in Hyderabad," says L. Rajagopal, the 38-year-old chairman of the Lanco Group of Industries who joined the Congress in February. Entrepreneurs are disillusioned because of the stifling atmosphere created by a centralised authority, failure to develop a modern port or facilitate long-term borrowing, he says.

The yawning gap between hype and reality is such that even though Naidu is a familiar figure at the annual World Economic Forum in Davos-where he tries to create a positive perception about India, and Andhra Pradesh in particular-it isn't paying significant dividends. So while Naidu may have spoken to German auto major Volkswagen in Davos, the company has decided to send a team to Chennai instead, considering the presence of Hyundai, Ford, Mitsubishi, TVS Suzuki and Ashok Leyland in Tamil Nadu, and the fact that about 30 per cent of the country's auto components are manufactured there. Critics also point out how an invitation to Malaysia's Proton car to set up facilities in Andhra Pradesh failed in the past.

Andhra Pradesh has also failed to capitalise on the large Telugu diaspora that has a sizeable presence in the infotech and health sectors in the US. All Naidu has managed to do is plan the creation of a database of non-resident, Telugu-speaking people to provide information on job opportunities abroad to further the career prospects of the state's students.

REALITY CHECK
After taking over as chief minister in 1996, Naidu has promised much but consistently underperformed.
YEAR	Promised FDI inflow	Actual FDI inflow
1996	11,018	1,961
1997	9,571	1,377
1998	24,645	5,562
1999	2,838	1,119
2000	2,346	1,014
2001	52,428	1,670
2002	8,474	1,566

"Naidu is a merchant of mirage, creating false hopes in the minds of people because his goal is to manage his image to stay in power," says former finance and power minister Konjeti Rosaiah of the Congress. "Everything else is incidental. That is why he talks about Hyderabad being the capital for everything from beer and biryani to software and sports, without doing much." In fact, Naidu frequently commissions sample surveys and the latest has concluded that his public appearances and the intensive campaigns on various programmes have enhanced his image as well as that of his Government. But the reality, points out Rosaiah, is stark. In the past five years, Naidu has slashed budget allocations for irrigation, power and industry. The Government also raised internal debt amounting to Rs 12,890 crore through development bonds but used the same for debt repayment or interest.

The growing criticism, however, has not deterred the chief minister. In a statistical retort to critics, he boasts about how 41 projects worth Rs 17,204 crore were inked at this year's Partnership Summit which the state hosted in January along with the Confederation of Indian Industry. These include the Rs 12,000-crore project for petroleum products by Transworld Corporation, US; the Rs 260-crore speciality paper project by ITC and the Rs 50-crore expansion project by Tecumseh India.

Besides, Oracle is planning a 7.5-acre campus in Hyderabad, the largest outside the US, even as computer giant Dell plans to set up a facility in the city. The availability of land at relatively low costs has also made the city a draw for golf courses. That explains why despite the criticism, some are willing to give Naidu his due. Satyam Computer Services Chairman M. Ramalinga Raju says, "He has brought professionalism into politics and treats good economics as good politics."

Adds Narender Surana, managing director, Surana Telecoms Limited: "Naidu has come a long way since his first trip to Malaysia in 1997. He grabs ideas during his foreign tours to help provide new opportunities here." Surana Telecoms is set to establish a unit for assembling fixed wireless telephones and handheld phones with the help of LG for BSNL in Hyderabad. Surana also recalls how Naidu, after poaching the idea from Malaysian Prime Minister Mahathir Mohamad, hired McKinsey to help create a vision for Andhra Pradesh, dubbed Vision 2020.

Naidu claims that his promise to investors is far from empty. To avoid any regulatory problems, single-window clearance is being offered, while the state's infrastructure is set to improve. Power generation has increased to10,014 mw from 5,635 mw seven years ago, it has a good network of roads, ports, air links, both domestic and foreign, and the recent discovery of gas in the Krishna and Godavari basin augur well for the state. But clearly, these are not enough.

All eyes are on the Naidu Government's performance which has not exactly matched people's expectations. But Naidu still feels he can deliver as long as his demands are conceded by the Centre. These include special incentives for states that have opted for reforms in power and other key sectors, the creation of special economic zones on the Chinese model, an open-skies policy. He also wants the Union Government to abolish "irrational" taxes which encourage trade rather than manufacturing.

Having made a headstart in e-governance, Naidu believes he is doing all he can to improve matters. The state is formulating a law to fix accountability at different levels while a mechanism is being worked out to ensure rewards and punishments to officials based on their performance. An online tracking system put in place last year does the necessary reviews. "There is a need for a radical rethink of what is holding back the country," says Naidu. "We must change the mindset of the bureaucracy and every effort must be made to give greater freedom to private enterprise."

But as Dr Kallam Anji Reddy, chairman, Dr Reddy's Laboratories, cautions, "Naidu must spread his enthusiasm in a virulent manner if we are to get huge investments." For, without the much-needed funds, the chief minister may not find himself at the helm of the state he envisions as the country's cyber capital.