AP Approves 59.69 Crore Incentives for Heritage: Conflict of Interest Row Surfaces

The Andhra Pradesh government has issued orders sanctioning substantial financial incentives from the state exchequer to Heritage Foods, a company owned by Chief Minister Chandrababu Naidu’s family.

According to official orders, incentives worth ₹59.69 crore have been approved for the company, which is expected to generate employment for just 35 people.

The decision was taken during a meeting of the State Investment Promotion Board (SIPB) and later cleared by the Cabinet, both chaired by Chief Minister Chandrababu Naidu. Following this, Industries Department Secretary Yuvaraj issued the formal orders on Tuesday.

Expansion, Not a New Project

Notably, this is not a new industrial project. The incentives are being extended for the expansion and technological upgradation of an existing Heritage Foods unit located at Kashipentla village in Chandragiri mandal of Tirupati district.

The expansion is estimated to cost ₹209.68 crore, but will create employment for only 35 individuals.

The move has drawn attention as it involves approving significant financial benefits from the public treasury for the expansion of a company owned by the Chief Minister’s family.

Incentives Under Food Processing Policy 4.0

The project has been granted ‘mega project’ status under the AP Food Processing Policy 4.0, making it eligible for various incentives.

Following the expansion, the company is expected to significantly boost production:

Flavoured milk production to increase by 131%

Paneer production to increase by 400%

Ghee production to surge by 566%

This is expected to substantially enhance the company’s revenues and profitability.

Breakdown of ₹59.69 Crore Incentives

As per the government order, the incentives will be disbursed over a period of five years. The components include:

₹34.93 crore subsidy for technology upgradation

₹17.80 crore reimbursement of 100% SGST for five years

₹0.98 crore power subsidy (₹1 per unit for five years)

₹0.98 crore exemption on electricity duty for five years

₹5 crore interest subsidy

These incentives collectively amount to ₹59.69 crore, placing a significant burden on the state exchequer.

Contradiction with CM’s Assembly Statement

The development has sparked criticism in light of Chief Minister Chandrababu Naidu’s earlier statement in the Assembly during the recent budget session.

He had said: “Heritage is our family company. Our family members run it. It has not received any benefits from the government so far. We have never sought government support. From the beginning, our policy has been not to expect anything from the government.”

However, the latest Cabinet decision—taken in a meeting attended by the Chief Minister and Minister Nara Lokesh—appears to contradict this stance, as it approves significant financial benefits to the same family-owned company.

Past Allocations Raise Further Questions

Officials point out that this is not the first time Heritage has received government support.

During the 2014–19 period, the government reportedly allocated:

10 acres in Krishna district near the capital for a cattle feed unit

10 acres in Nellore district for Heritage Foods

6.46 acres in Anantapur district

Critics argue that despite such allocations, claims that the company never benefited from government support are misleading.

Proposal and Approval Process

The process unfolded as follows:

Heritage Foods submitted a proposal to expand its milk processing unit in Kashipentla village, with an investment of ₹209.68 crore and employment potential for 35 people, seeking special incentives.

The proposal was reviewed on the 12th of last month by the State Investment Promotion Committee chaired by the Chief Secretary, which made recommendations.

These recommendations were then placed before the SIPB meeting on the 18th, chaired by the Chief Minister.

The SIPB subsequently recommended granting special incentives up to ₹59.69 crore, as requested by the company.

Questions Over Public Funds and Governance

The decision has triggered debate over conflict of interest, governance ethics, and prioritisation of public funds.

While the government justifies the incentives under industrial promotion policies, the relatively low job creation (35 jobs) compared to the high fiscal outgo (₹59.69 crore) has raised concerns.

Additionally, the fact that the beneficiary company is directly linked to the Chief Minister’s family has intensified scrutiny, with critics questioning whether due process and ethical boundaries have been maintained.

The contrast between earlier public statements and current policy decisions has further fueled political and administrative debate over transparency and accountability in the state’s industrial incentive framework.