IT'S seven in the morning, but the most heavily protected home in Hyderabad's upscale Jubilee Hills is already humming with activity. Walkie-talkie and carbine-toting securitymen patrol the gates, safari-clad bureaucrats bustle around with files, sundry officials work phones, fax machines, photocopiers. Inside his cosy little wood-and-marble home-office, Nara Chandrababu Naidu is hard at work, signing files, listening to mandarins telling him about works-in-progress, power outages, coffee plantations, Naxalite attacks, a fawning newspaper editorial, a proposal from the Hindujas. Then there are invitations and meetings to be fixed: a Mark Tully interview, a Ford Foundation pow-wow, appointments with software sultans in the United States next month.
Suddenly, Naidu gets fidgety, turns to his Hewlett-Packard PC, and logs on to the Chief Minister's Information Systems, his live information powerhouse developed by NIIT and Andhra Pradesh Technological Services. Charts and graphics pop up on the screen. He surfs to the state's power generation status menu. "Why are these seven feeders affected?" he asks an official, moving to an icon with the mouse. Otherwise, the tell-all screen brings good tidings: generation is at 102.6 megawatts, plant load factor (PLF) is 67.12 per cent today, cumulative PLF since April has been 79.59 per cent. "And hey," he tells his men, "I need two more columns here, I need to know how many transformers are failing every day." Then he works the phones to the state electricity board chief, and tells him the same.
One hour later, bleary-eyed officials huddle up on sofas in an anteroom as Naidu gets cracking on a presentation on the status of ongoing projects in the state. An officer clicks open a Digital laptop, and Microsoft Project charts light up the screen. Again, the chief minister is finicky about the minutiae. "What about the clarity of letters on the screen?" Typeface size expanded, colour changed, problem solved. But now the graphics of a rural water supply project peeves him: some project updates are more than a week old. "What's wrong with you people?" he barks. "Look, we've got this loan, we've got to pay this money back with interest, so I want you people to set your targets daily. Daily. You get what I mean?" He's evidently alluding to the Rs 2,200 crore he wrangled for his Andhra Pradesh Economic Restructuring Programme (APERP) from World Bank in June.
N. Chandrababu Naidu, chief executive officer, Andhra Pradesh Inc. Yes, more and more people are referring to this scruffy-bearded, regulation khadi shirt-cotton trouser-sandal-clad, halting-English-speaking man as India's best CEO rather than CM. Many call him India's only politician with a 21st century vision. And perhaps the only chief minister in independent India whose objectives and achievements are difficult to describe without using terms out of classic management texts.
He's downsizing government, benchmarking his state against global standards, following a clear long-term strategic vision based on the concept of core competencies, creating a networked information-based society, branding Andhra Pradesh as the promised land for global investors. He looks at himself in CEO terms, and even refers to the people of the state as the shareholders for whom he has to maximise profits: "There is an imperative need to induct more professionalism and greater accountability and transparency in the processes of governance. Political leaders in government will necessarily have to conduct themselves in a manner which is more like chief executives of large and complex corporates. " In his conversation, his allusions range from US-based management guru C.K. Prahalad's theories to Mahathir Mohammad and New York City's successful crime crackdown. There's vision here.
This from the helmsman of one of India's largest poor states with a population of 73 million and many socio-economic fundamentals—literacy, per capita income—below the national average. "I want to make Andhra Pradesh the number one state in the country in 10 years time in terms of the standard of living of its people," he bluntly tells Outlook, gazing at a luminescent poster of the Hongkong skyline in his sprawling office. "Nothing less will satisfy me. I'm running against time."
Naidu has been running against time from the day he wrested power 35 months ago after unseating his fabled father-in-law N.T. Rama Rao in a palace coup, with the state on the brink of bankruptcy. "There was no money to even pay wages," recalls P. Ashok Gajapati Raju, the avuncular finance minister. Like a bull in a china shop, the 48-year-old poker-faced chief minister junked traditional vote-grabbing populism in a dizzy reforms run. He rolled back subsidies, hiked prices of electricity and water supplied to farmers, partially scrapped prohibition to bring in tax revenues, increased taxes and bus fares. The results have been spectacular: his government has mopped up a handsome Rs 2,099 crore in additional revenues from these reforms in the past two years alone; the partial lifting of prohibition is bringing in another Rs 1,800 crore. Then World Bank singled out the state for its first multi-sectoral state-level investment operation in India—Naidu's biggest coup.
"Andhra Pradesh," gushes World Bank's director (operations) Caio K. Koch-Wesner, "has clearly demonstrated its commitment to reforms." Says Edwin Lim, the Bank's country director for India: "The chief minister has taken strong steps to address pressing fiscal and sectoral difficulties." US-based investment bank Goldman Sachs sees him as a "sincere, committed leader who does not shy away from taking bold, though politically hard decisions."
Core competency: Naidu's manic obsession with infotech is of course the first thing you notice. In his plush 1,000-sq ft office outfitted with a Sony high-projection television set, he works on an IBM PC, while his secretaries lug a powerful IBM 770 ThinkPad stashed with his database on the road. He has also put a snazzy and informative state home page on the net (www.andhrapradesh.com), the first state government to have done so. Says Ajay Khanna, senior director, Confederation of Indian Industries (CII): "Andhra Pradesh had no heavy industry, which not only brings in revenue but also boosts employment. So he chose infotech which is the industry of the future and there are no limits to growth." The results are beginning to show:
The planet's largest software firm, Microsoft Corporation, has announced it will set up a software development centre in Hyderabad, only the second of its kind outside its base in Seattle. Oracle Corporation is following suit, as are some Indian software giants.
The first phase of Hyderabad Information Technology and Engineering Consultancy City (Hitec City), Naidu's crown jewel, on the outskirts of the state capital, opens next month. Envisioned as Asia's largest infotech park, this Rs 1,500-crore state-of-the-art facility is spread over 158 acres and will house the hottest IT players at home and abroad. Over 60 per cent of the space in the glittering circular 10-storey intelligent building has been already sold out.
Opening this year also is the Indian Institute of Information Technology (IIIT), another Naidu brainchild. It will churn out some 5,000 computer professionals annually from schools set up by such infotech monsters as IBM, Microsoft, Oracle, Satyam and Metamor. The institute also plans to rope in Bangalore-based Indian Institute of Science, and the IITs in Chennai and Mumbai to develop an inter-university network between Indian and American institutes in collaboration with Carnegie Mellon University.
In a complete break from tradition, the CII this year chose Naidu, a politician, as the chairman of its National Committee on Information Technology. "He is farsighted, he has done work to change his administration and see that the changes are implemented," explains Khanna. "He actually behaves more like a chief executive than a chief minister."
The Efficiency Principle: What is nothing short of revolutionary is the way Naidu is bringing infotech to governance to slash red tape, make government more accountable and bring relief to the harassed common man. The aim: to bring a range of citizen services over networks (see box: Wiring up the Government). Provoking this was a study which found there were 47 levels in government; and that a file had to go through an average of 11 levels to get approval in Naidu's secretariat. "Did you know," he jests, "that in our travel allowance bills, an officer has to certify that he has not used a government elephant or boat to travel? Unthinkable, isn't it, after 50 years of independence?" Now he plans to set up the Human Resources Development Institute Of Andhra Pradesh to train government staff in collaboration with the Washington-based IBM Institute Of Electronic Government.
Capital Structuring: Naidu's background has helped in pursuing such brutish commitment to reforms. Holding a masters degree in economics, he tinkered with computers even when he joined TDP as its general secretary in 1985, setting up a comprehensive database of its three lakh members (the information was subsequently lost). Even as he held various party positions and became a minister during the NTR regime, he successfully ran Heritage Foods, a Hyderabad-based dairy products firm (authorised capital: Rs 10 crore) which he launched four years ago to exploit the milk boom in his native Chittoor district. "He knows a lot about capital markets, and is extremely financia-lly savvy," says Yuga-ndhar of Karvy Consultants, the world's second largest shareholder-servicing company which handled a public issue for Naidu's company. It was oversubscribed more than 30 times.
But where is the money coming from to bankroll Naidu's grand vision in such cash-strapped, recessionary times? With his credibility on the rise, his credit rating seems to be soaring. "Money is no problem," he keeps telling sceptical officers, while hardselling his grand projects. "The challenge is to use the money properly." For one, the handsome World Bank loan—reasonably cheap money at 10 per cent interest, but conditionalities on debt and revenue gaps attached—should take care of the critical upgradation of rural infrastructure and services. The private sector is being involved in the infotech projects. Some 38 public sector undertakings in the state are being reviewed for disinvestment or privatisation. Raising money from the public is the other path being vigorously pursued: the Andhra Pradesh Power Development Corporation, for example, floated a Rs 100-crore bond issue recently. It ended up raking in Rs 524 crore!
Emboldened by this, Naidu has now decided to float a Rs 500-crore bond to clean up Andhra Pradesh. The money will go in cleaning sewers, fixing drains and sweeping streets.
Smartselling: Naidu is a master at this. Last fortnight, he charmed a 128-strong who's who audience at Bengal Initiative—a Calcutta-based think-tank—gabfest. No boring speeches, but a swank audiovisual presentation on how he's remaking Andhra Pradesh did the job. He called his citizens stake-holders, branded his government SMART (simple, moral, accountable, responsive, transparent) and cleverly invoked the sayings of Tagore, Churchill and Bill Gates to push his arguments. "No babu, only Chandrababu!" screamed a pithy slogan. The audience gave him a standing ovation.
Last year, in Delhi, he cajoled US ambassador Frank Wisner into securing an exclusive 20-minute meeting with Gates. As soon as his officers clicked open the Digital Highnote Ultra notebook for a 15-minute presentation on software opportunities in Andhra Pradesh, Gates was impressed. "That's a very good machine you're using," he said. The meeting finally stretched to 45 minutes. "Bill asked a number of questions," remembers Randeep Sudan, special secretary to the chief minister, who was at the meeting. "We had managed to break the ice fast." Now Naidu says he will get Gates to Hyderabad to visit Hitec City after it opens. "Naidu has vision and he shares his vision, he communicates it," says Y.S. Rajan, technology advisor to the Government of India. "Even to think of a vision for 2020 requires a lot of calibre.
Vikram Sarabhai had a vision in 1964. He visualised that the television and telephone would reach every nook and corner of the country. At that time, it sounded like a joke, but today, it has happened. Today, Naidu has that kind of a vision, and given the efforts that he is making, it will definitely bear fruit in the future."
The Downside: For the hurryup chief minister, the road ahead could still be strewn with pitfalls. Till now he's bravely fobbed off spirited resistance to his reforms. Last month, APSEB workers went on a five-day strike, but the chief minister held his ground (only 40 per cent of the electricity supplied was getting billed due to leakages and tampering; post-reforms, 70 per cent is billed). Then Andhra Pradesh Road Transport Corporation employees struck work for 14 days after Naidu sacked 800 drivers found to have joined its rolls on forged licences. "We were firm," says finance minister Raju, "and the workers resumed work." State Congress president Y.S. Rajasekhara Reddy says Naidu is splurging to pander to the "hype" surrounding him. "The government does not have money to help farmers in financial distress. But huge amounts are spent on his publicity campaigns."
Then there are doomsayers who predict that Naidu could be leading the state into a debt trap with his heavy borrowings. Even by government estimates, total debt will rise to 24.1 per cent of the gross state domestic product (GSDP) in five years, up from 22.6 per cent today. The legacy of fis-cal indiscipline still haunts his regime: even after a fine performance last year, the government had to pump in Rs 840 crore into the electricity board to help pay its wages and bills; and this year, the rescue tranche could reach Rs 1,000 crore. The fiscal reform programme linked to the World Bank loan, however, has been set out: deficit is aimed to be reined in at 2. 5 per cent of the GSDP in five years, down from 3 per cent this fiscal year; and capital expenditure is expected to double to 2.5 per cent of the GSDP in five years.
We are walking a tight-rope," admits Raju, "but we aren't wobbly. There's tremendous scope for further improvement." And nobody possibly knows this better than Naidu himself. The pace he has set for himself is nothing short of amazing. You can almost smell the rubber burning.
The Workaholic: A balmy morning is just breaking over Hyderabad. In the basement of his two-storey home, his staff is working at breakneck speed, cutting and pasting news reports from the 23 district morningers that their boss goes through at the crack of dawn and marks for action to be taken. This is before he wakes up at four, goes through his yoga, treadmill and a chapati-and-coffee breakfast to get ready for the day. There are meetings and meetings throughout his 18-hour workday schedule, seven days a week. "The chief minister's secretariat never really closes," says S.V. Prasad, Naidu's hyperactive secretary. "He works non-stop." Sure enough, his four-car convoy hits the road at ten for a meeting with joint collectors and revenue divisional officers of 23 districts at the chandeliered Jubilee Hall.
There the chief minister urges them to hurry up. "Everyone wants power," he tells them. "Politicians want power, bureaucrats want power. I want to remove such discretionary powers. And you all have to work faster to bring in results." An hour later, in a wood-panelled meeting room in the secretariat, Naidu is closeted with admen in a media strategy meeting to sell his state. "No need to praise me or anyone in the government in this meeting please," he tells his spin doctors. "This is serious work. Now can we see the videos please." Slick feel-good promos—one has images of rural Andhra mor-phing into a Singapore-type highrise glass-and-granite city—fill a Samsung TV screen. Then he wants a "topnotch" market research agency hired to find out whether the "images are registering with the people inside and outside the state".
When evening calls, Naidu patiently answers questions from viewers in a dial-in programme in a campy Doordarshan studio. Some 68,000 calls are choking the lines during the 30-minute show, but only 15 calls get through. "Sir, all are not working like you, sir," howls a caller, before reeling off his litany of woes. For the CEO of Andhra Pradesh, that's possibly the only obstacle to going down in the history books as a visionary.