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Forget Bombay, flock to Cyberabad, Naidu tells finance, insurance firms

Our Correspondent in Hyderabad

Andhra Pradesh Chief Minister Nara Chandrababa Naidu on Friday reiterated his determination to develop Hyderabad as an important financial and insurance centre "in this part of the world". (Hyderabad has acquired another name -- Cyberabad -- after Naidu began hardselling the city as the finest destination for domestic and foreign investors.)

Inaugurating the two-day meet of "the India Finance Forum-2000" organised by the Confederation of Indian Industry, Naidu disclosed that the state government was in the process of earmarking space for a financial and insurance park with the best facilities on par with international standards.

"A world-class convention centre is also proposed as part of the infrastructure for this purpose. The facilities will include high-speed digital networks connected to international gateways. I hope with your help, we will be able to achieve this objective in the near future," the Chief Minister told the high-profile participations at the meet.

"I look forward to you locating your offices in Hyderabad so that you don't miss this golden opportunity," Naidu pleaded with the representatives of banks, financial institutions, insurance companies, corporate sector and public sector units participating at the two-day conference.

"Bombay is overcrowded. It is better to shift to Hyderabad," he quipped and assured the captains of industry, finance and insurance sectors on behalf of the Andhra Pradesh government that "we are committed to providing all assistance that may be required".

He pointed out that Andhra Pradesh was already implementing major infrastructure projects such as international airports at Hyderabad, roads development, water and waste management projects, etc. The state government has been using structured financial instruments for funding many of these projects.

"I recall the situation when we were planning Hitec (Hyderabad Information Technology and Engineering Consultancy) City on the outskirts and there were apprehensions that the project may not be viable as similar projects were running into problems in other cities. However, today, there is no space left unbooked in Hitec City and companies are now waiting for the second phase to be completed," he remarked.

Recounting the challenges confronting the financial sector in the context of rapid technology-led growth, he said that America witnessed faster growth in recent years largely due to rapid advances in technology.

For achieving faster, technology-driven growth, he said it was important that financial markets innovate. It is important to have greater flexibility in corporations and labour markets. It is also important to have deregulation and competition.

One reason for the outstanding performance of the US economy, he noted, has been its ability to fund innovative companies at an early stage. US venture capital funding doubled to more than $ 40 billion in 1999, he said and pointed out that much can be learnt from the experience of other countries.

"We also need to address the impact of the emerging information economy on the financial sector. The rise of the Internet poses new challenges and offers new opportunities. The distinctions between banks, brokerage firms and even grocery stores may disappear in the not-too-distant Net future. The government recognises the importance of this phenomenon," he said.

"It is for this reason that Andhra Pradesh is the first state in the country to go in for digital government. In Andhra Pradesh, we are attempting to position the state on a high growth trajectory by focussing on information technology and tourism besides sectors such as education, health and infrastructure. In the last four years, we have brought about a shift from a plateau of non-performance to a trajectory of fast growth in the state," he explained.

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