The 1990s and 2000s were heady decades for Indian capitalist enterprise, with gross fixed capital formation in the private sector more than doubling from 12.1% to 24.7% of GDP between 1991-92 and 2011-12. It was an equally glorious period for the so-called “Andhrapreneurs”, businessmen from undivided Andhra Pradesh, mainly belonging to the Kamma, Reddy and Raju communities.
As liberalisation and globalisation threw open new sectors for private investment, alongside opportunities to leverage India’s low-cost manufacturing and technical manpower strengths in export-oriented industries such as IT and pharmaceuticals, these new capitalists with predominantly middle-to-rich peasant backgrounds made hay.
The Andhrapreneurs who thrived in the post-reform era include L Rajagopal of Lanco Group, C Visweswara Rao of Navayuga, Ramachandra Galla of Amara Raja Batteries, Rajendra Prasad Maganti of Soma Enterprise, N Nageswar Rao of Madhucon, Sridhar Cherukuri of Transstroy India, K Sambasiva Rao of Progressive Constructions, V Nageswara Rao of SEW Infrastructure, Y S Chowdary of Sujana, D Jai Ramesh of Vijai Electricals, Murali K Divi of Divi’s Laboratories, and V C Nannapaneni of Natco Pharma (all Kammas); K Anji Reddy of Dr Reddy’s Labs, P V Ramprasad Reddy of Aurobindo Pharma, G V K Reddy of GVK Group, T Subbarami Reddy of Gayatri Projects, Prathap C Reddy of Apollo Hospitals, E Sudhir Reddy of IVRCL, and Ayodhya Rami Reddy of Ramky Infra (all Reddys); and B Ramalinga Raju of Satyam Computer, A V S Raju of Nagarjuna Construction, K S Raju of Nagarjuna Fertilisers, C Srini Raju of Sri City, and D V S Raju of Gangavaram Port (all Rajus).
Grandhi Mallikarjuna Rao of GMR Group, a Komati or Arya Vysya, a traditional trading community, is the odd man out.
Many of these groups today are, however, in deep trouble. In April 2009, Satyam Computer was acquired by the Mahindra Group, following an accounting scandal involving its chairman Ramalinga Raju (D V S Raju and Srini Raju were, incidentally, part of the company’s management much before all this). Lanco, Soma, Madhucon, Transstroy, Progressive Constructions, SEW, Sujana, IVRCL, Ramky and Nagarjuna Fertilisers are all neck deep in debt, if not already gone bust. GMR and GVK are pale shadows of their former selves, when they were on an airports-, power plants-, and highways-building spree.
But for the Andhrapreneurs, the crisis isn’t just financial. It is also existential.
All the above-mentioned names are either from coastal Andhra or Rayalaseema that make up AP now, post creation of the state of Telangana in June 2014. While hailing from these two regions, their operational base has, however, been primarily in Hyderabad, the capital of undivided AP until it went to Telangana. Telangana Chief Minister K Chandrashekar Rao’s (KCR) party’s success owes to its skilfully tapping the undercurrent of resentment amongst locals against the “takeover by coastal people”.
The recent coming together of the Congress and the Telugu Desam Party (TDP) of AP Chief Minister N Chandrababu Naidu for the Telangana Assembly elections is significant for more reasons than one.
The Congress has traditionally been seen as a “Reddy party”; out of its 13 CMs in the undivided state, nine were from this community. The TDP, on the other hand, largely represented the interests of upwardly mobile Kammas. Its founder, the matinee idol N T Rama Rao, who became CM in 1983, and Naidu, NTR’s son-in-law and the promoter of a publicly-listed company (Heritage Foods Ltd) himself, are both Kammas.
For Kammas, the need to secure their business interests in Hyderabad is obvious, given that constructing a new capital city for AP — Amaravati — will take time. The Centre’s allegedly not making available enough funds for its development, and denying the state special category status after cash-rich Telangana was carved out of it, have been cited as reasons by the TDP for exiting the BJP-led National Democratic Alliance. By going a step further now — forming a ‘Prajakutami’, or people’s alliance, with the Congress — it signals a tie-up between not just two parties, but two communities that couldn’t so far see eye to eye.
The Reddys, too, have their own compulsions. The big Reddy tycoons are again mostly from coastal Andhra (especially Nellore and Guntur) and Rayalaseema. Even P V Krishna Reddy, whose Megha Engineering and Infrastructures has registered spectacular growth in the last 3-4 years, and which is executing the Telangana government’s Rs 80,000-odd crore Kaleshwaram lift irrigation project, comes from Krishna district. But Reddys are present in large numbers in Telangana as well — and they suddenly find themselves without power in both states.
KCR is a Velama, also a landed community, though numerically smaller. While AP has had non-Reddy, non-Kamma CMs before, he is probably the first one who isn’t a political lightweight. KCR has not only sought to project himself as Telangana’s creator — somebody who gave wing to the movement for a separate state — but also to promote businessmen who aren’t “outsiders”.
There are a few industrialists from KCR’s own community — Jupally Rameswar Rao of My Home Constructions, G Ravender Rao of Yashoda Hospitals, J Nrupender Rao of Pennar Industries, and C M Ramesh of Rithwik Projects. However, they aren’t in the league of the Andhrapreneurs. The last named person, moreover, is a TDP Member of Parliament and a Velama from Rayalaseema’s Kadapa district.
For the Congress, a tie-up with the TDP may not be easy to sell in Telangana. Senior party leader S Jaipal Reddy has tried to counter KCR’s barbs at the Prajakutami, by stating that it is the ruling Telangana Rashtra Samithi that has “sold out to Andhra contractors”. The KCR government, he claims, has awarded contracts worth over Rs 77,000 crore to non-Telangana businesses.
Either way, what seemed a non-contest of an election — Telangana votes on December 7 — has, with the formation of an unlikely alliance, opened up new possibilities.