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Claim for credit and the KIA Story

by Sharath
571 views Hyderabad

After YSRCP assumed power in 2019, the credit war regarding the KIA Motors facility in Anantapur started between the YSRCP and the TDP. Finance Minister Buggana Rajendranath Reddy sparked off an interesting debate by claiming that the global automobile giant set up its manufacturing unit in the State based on a request made by the late Y.S. Rajasekhara Reddy when he was the chief minister way back in 2007. Interestingly, during the 2019 general elections campaign, the BJP unit of Andhra Pradesh has broadcasted that the KIA plant was set up as a result of the Prime Minister Narendra Modi’s endeavours during his visit to Korea. The claim for credit itself shows the success of the plant. 

The irrefutable truth is that the KIA plant in Anantapur district is a result of active interventions for investment by then Chief Minister N. Chandrababu Naidu. With a speculation of around 12000 Cr, the previous Chief Minister Chandrababu Naidu gave adequate backend prerequisite to building up the plant and infrastructural offices, including the arrangement of 600 acres-odd section of land, power gracefully, and even water flexibly from the Gollapalle repository. 

Industries and investments have drifted into Andhra Pradesh as a result of solid modern strategies introduced by N. Chandrababu Naidu. The previous Government headed by Naidu advocated a unique and investor-friendly mechanism of giving clearances within 3 weeks for the fresh investment proposals. 

The circumstances have clearly changed ever since the new Government in the State was voted into power. Discretionary measures of the new Government under Jagan Mohan Reddy have resulted in significant investment slump, while some have either withdrawn from existing projects or their projects have been cancelled by the Government. Others in retrospect, feel hostile to invest. Industries in Andhra Pradesh are enduring either by moving ceaselessly to different states or decreasing their net investment in this risk-prone state. 

One such subjective choice taken by Jagan Mohan Reddy’s 75% reservation to young people in privately owned businesses. Numerous media reports have cited that Kia Motors had internal discussions about how awkward it would be to incorporate such predatory demands. 

When the Local MP threatened KIA Management:

At the inaugural program of the first KIA car, the Hindupur MP Goratla Madhav allegedly ill-treated the company representatives. The electronic and social media platforms went viral with visuals of Gorantla Madhav saying “I will see that you bow your head in front of Jagan Mohan Reddy. I will complain about this matter to him, you (Kia) still dreaming that you are in Naidu’s rule, wake up.” These remarks illustrated the arrogant attitude of YSRCP and its leaders towards the investors.

The threat coincided with rumours of KIA plant and its ancillary units moving to Tamil Nadu, however, the KIA management mentioned there was no truth in the rumours and the plant will remain functional in at Anantapur, but there are chances of ancillary units of KIA shifting to other states, presumably Tamil Nadu.

The Chandrababu Naidu Government allotted land to KIA for its subsidiary units at a low value  of Rs. 6 lakh per section of land. But the new YSRCP Government increased the land rates to Rs. 60 lakh per section of land. This move has supposedly pushed Kia to reconsider moving its ancillary units to Tamil Nadu. 

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