Vijayawada: The Andhra Pradesh government is looking to enact the Investors Protection Act to shield existing and upcoming investments from political instability and changing trade policies, Chief Minister Nara Chandrababu Naidu told ThePrint.
Naidu spoke to ThePrint ahead of the 31st CII Partnership Summit in Visakhapatnam, whose theme this year is ‘Navigating the new world order through trade, technology, trust, and thought leadership’.
The Act is expected to be introduced in the winter session of the Andhra Pradesh Assembly after discussions with the state Cabinet. Once passed, Andhra Pradesh will become the first state to introduce a dedicated legal framework for investment protection.
The proposed legislation is part of the state government’s efforts to reassure investors that their commitments will be protected against what Naidu described as vindictive politics arising from a regime change.
The government has also introduced an escrow mechanism under which subsidies meant for corporate firms will be parked in designated accounts. Companies can withdraw the subsidy once their committed investments are brought into the state.
An escrow mechanism is an arrangement where an impartial third party temporarily holds funds until specific contractual conditions between two transacting parties have been met.
“The escrow account will be operational from 12 November. I plan to send it to the Centre once it passes the Andhra Pradesh Assembly so that Parliament and the Union Cabinet can consider passing a similar Act to assure global corporate leaders about their investment in India,” Naidu told ThePrint.
The Chief Minister said the need for such safeguards became imperative after Andhra Pradesh was left with huge liabilities and a loss of investor confidence at the end of the previous term led by the YSR Congress Party (YSRCP).
He said investors were looking for an environment built on trust, adding that a favourable business climate was essential for investments to take shape on the ground, generate employment and drive growth.
“If the 20th Century global business climate was all about ‘Thrust in Business,’ the 21st Century mantra is about ‘Trust in Business’. After we introduced the concept of ‘Speed of Doing Business’ in Andhra, it had to be supplemented by reassurance to the industrialists,” Naidu said.
Sumant Sinha, Founder-Chairman of ReNew, India’s second-largest renewable energy generation firm, praised the state government’s approach to working with investors. He spoke of the reassurance his management received while grounding thousands of crores of investment in the Rayalaseema region.
“The way the Andhra Pradesh government has worked with us is commendable. It is focused on helping firms solve any problem they have. This has been our first-hand experience,” Sinha said.
In the last 2.5 years, the TDP-led government has helped ground investments worth Rs 32.49 lakh crore, according to data from the state Industries and Investment Department. Andhra Pradesh is also targeting 150 MoUs, promising investments of Rs 10 lakh crore.
(Edited by Anupama Yadav)
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