Loss up to Rs 500 crore per day due to bandhs

HYDERABAD: Uncertain business climate primarily due to frequent bandhs and ambiguity over a separate Telangana are causing an estimated financial loss of `400 crore to `500 crore per day, according to Federation of AP Chambers of Commerce and Industry (FAPCCI). Bandhs were called on 17 days so far this year resulting in job loss of about 20,000 in the manufacturing sector and another 40,000 in the services sector including IT and BPOs. In the recent past, over 60 companies have decided to set up facilities in locations other than Andhra Pradesh, while some of the existing companies such as Xerox, Convergys, Quad Cable, Surana Group and Kedia Infotech have partly folded up operations here in favour of other cities. Subsequently, industrial growth in the state fell to about 6 per cent, much below the national average of above 8 per cent. “Andhra Pradesh’s growth rate always used to be 20 per cent higher than the national average. Currently, it is 20 per cent less than the country’s average,” said Devendra Surana, senior vice-president of FAPCCI. Neighbouring states like Karnataka, Tamil Nadu and Gujarat are surging ahead with a double-digit growth of over 14 per cent.Speaking to media at an event organised by FAPCCI on ‘Frequent bandhs - Loss of production and exports’, Surana said the business sentiment has been affected and companies prefer to opt for locations like Pune, Bangalore, Chennai and Gurgaon to Hyderabad. A case in point was the government’s effort to rope in automotive major Peugeot Citreon, which reportedly chose Chennai. “Recently, Xerox shifted its base to Bangalore, while Convergys channelled its call centre jobs to Bangalore,” Surana said. Citing his own experience, he said companies are forced to shell out additional expenditure during bandhs. “I have to deliver spare parts for car producers Hyundai and Maruti in Chennai, and what usually is matter of `20,000 for transport will cost me `5 lakh by air,” he said, adding that clients are demanding him to either shift base to Chennai or pull out altogether. On one side the protestors are agitating in demand for job opportunities while on the other hand they are responsible for the loss of valuable opportunities for growth because of the bandhs, Surana said.Association member M M Sreeram said in the longer run if IT companies pull out, there will be no demand for colleges offering technical courses, affecting the education sector too. The members appealed to political parties and the public to consider the negative impact on state’s economy and put an end to the culture of frequent bandhs.