Telangana feels left out after Union Cabinet nod for semicon projects in A.P., Punjab, Odisha

Union Cabinet’s approval on Tuesday (August 12) for two projects in Odisha and one each in Punjab and neighbouring Andhra Pradesh, together entailing an investment of ₹4,600 crore, under the India Semiconductor Mission (ISM) is bound to raise hackles in Telangana.

Coming amid a intensive pitch of Telangana to host such projects, the development is set to become the latest tool for the Congress-ruled government to voice concerns over alleged discrimination against the State. Providing credence would be the presumable interest semiconductor companies have been evincing in anchoring the projects in Telangana.

At another level, Chief Minister’s A.Revanth Reddy’s government is also likely to face heat from principal opposition BRS over the development. How much of fodder it will provide to the K.Chandrashekar Rao-led party is anyone’s guess, especially since it had also in the past questioned Centre’s decision over the location of some projects.

Hours after the Union Cabinet decision, highly placed sources in State government reiterated Telangana remains a highly favourable environment for semiconductor manufacturing. Blaming the Centre of maintaining a bias against Telangana, they said such an approach will eventually result in concentration of semiconductor ecosystem in BJP-favoured States and in the process negate Telangana’s policy attractiveness, infrastructure robustness and political stability.

During their Delhi visits, Chief Minister A.Revanth Reddy and Minister for IT and Industries D. Sridhar Babu had met Union ministers seeking Centre’s approval for semiconductor projects in the State. As recent as in July, Mr. Reddy had met Union Minister for IT Ashwini Vaishnaw urging the latter to expeditiously approve the semiconductor projects in the State. He had appealed to the Union Minister for approval of the proposed ASIP project and micro LED display fab project by Crystal Matrix.

An official note on the Union Cabinet decision showed Advanced System in Package Technologies (ASIP) will be setting up a semiconductor manufacturing unit in Andhra Pradesh, under technology tie-up with APACT Co of South Korea, with an annual capacity of 96 million units. The manufactured products will find applications in mobile phones, set-top boxes, automobile applications and other electronic products.

Sources in the State government said ASIP Technologies was originally meant to set up a ₹890 crore OSAT/ATMP facility in Electronics Manufacturing Cluster (EMC) at Maheshwaram, near Hyderabad. Telangana government had allocated 10 acres at a subsidised rate, along with a package of other fiscal benefits. The plans to setup facility in Telangana were in steady progress as ASIP had applied for incentives under ISM and received clearance from both the Techno financial Advisory Group and the Ministry of Finance, they said.

To support their argument of BJP allegedly snatching away projects meant for Telangana, they cited the 46 acres allotted to a Kaynes group company at Kongara Kalan, near Hyderabad, for a ₹2,800 crore OSAT and compound semiconductor facility in which 2,000 direct jobs were envisaged. Telangana offered customised benefits to facilitate the setting up of its semicon plant. An MoU was also signed but the project was relocated to Sanand in Gujarat following what the sources described as intervention and preferential allocation by the Union government.

Apart from highlighting the world-class infrastructure, favourable environment and world-class research and development centres, the State government had announced multiple facilitating projects, including plans to a dry port in Hyderabad and connect it to a sea port in A.P. with a dedicated road and rail corridor, they said.