The Andhra Pradesh government is facing criticism over the scale of incentives and concessions being extended to major corporate entities setting up data centre projects in the state.
Social activists and human rights forums allege that the public exchequer is bearing enormous costs without corresponding employment benefits.
On Friday, the state government announced substantial incentives for a giga-scale artificial intelligence data centre proposed by Reliance Industries in Vizianagaram district.
According to officials, the cumulative value of concessions and incentives being provided to the project could be close to Rs 20,000 crore.
An analyst said concessions could be justified if they were given to industries that provide large-scale employment and long-term benefits to local youth and the state economy.
“But the present policy framework appears disproportionately favourable to large corporate entities, without ensuring adequate returns and benefits to the state,” he criticised.
Andhra Pradesh IT Minister Nara Lokesh has repeatedly maintained that the government is offering subsidies and land at discounted rates primarily to generate substantial employment opportunities.
However, critics say these claims do not match the actual employment potential of the projects being approved.
For example, in the case of the proposed Reliance AI data centre, the government order reportedly mentions only the possibility of around 1,000 jobs, with no guaranteed employment commitment.
Officials argue that even if all the projected jobs materialise, the scale of government incentives would effectively amount to nearly Rs 20 crore in subsidies per job created.
Some senior bureaucrats have also privately questioned the rationale behind such large concessions.
One IAS officer reportedly remarked that instead of granting Rs 20,000 crore worth of incentives to a corporate giant like Reliance Industries, the government could directly support unemployed youth with financial assistance and generate broader economic benefits for the state.
Environmental concerns are also emerging as a major issue surrounding the rapid push for data centres.
Experts have warned that large-scale AI and cloud infrastructure projects consume enormous quantities of electricity and water, while also contributing to long-term environmental stress.
Similar concerns were earlier raised over data centre projects associated with Google and the Adani Group.
While corporations stand to gain heavily from public subsidies, the state government is projecting these projects as transformational investments for Andhra Pradesh, without adequately disclosing the fiscal burden or long-term environmental implications.
