City Life Hyderabad: Cyber Towers, where the young hope to be hi-tech maharajahs

INDIA'S BEACON of hope sits in countryside dotted with mounds of broken granite outside Hyderabad, the capital of the state of Andhra Pradesh.

It is a stumpy, beige- coloured cylinder; close up you see that one section of the cylinder is filled with a sheer wall of glass. The ground floor is completely open to the outside: sunshine and breezes range across it, and an atrium of Sheraton-esque drama soars 10 floors to the glass roof.

This is Cyber Towers, the first and the core building of a new city which, if all goes to plan, will soon rise among the boulders: a hi-tech city occupying 160 acres that will offer a working and living environment totally different to the rest of India. A city where a phone line can be ordered and installed in 15 minutes, with constant power at steady voltage, with pure tap water, banks with cash dispensers, restaurants, a hotel and a conference centre in easy reach. Heightening the sense of being in a foreign enclave, there is even a customs house, so imported microprocessors and satellite phones can enter India right here, far from the dust and sloth of Bombay.

In Cyber Towers, India is far away: betel-nut, which Indians love to chew and whose vermilion juice stains every metropolitan stairway, is banned. Bicycle rickshaws, beggars and bastis (shanty slums) are over the hill and far away. The future, by contrast, feels practically within reach. In March, Microsoft opened up shop on the top floor of Cyber Towers - only the firm's second research and development centre in the world - and suddenly Chandrababu's dream no longer seemed so very remote.

Chandrababu Naidu has been chief minister of the south Indian state of Andhra Pradesh (population 80 million) for four and a half years. The joint state and national elections, whose results will be known in the next fortnight, in Andhra Pradesh are in effect a referendum on his ambitions and achievements. According to the latest polls, he is running neck and neck with his Congress Party rival.

Naidu's ambition is considerable, to say the least. In a document called Vision 2020, he itemises his goals and de- scribes how to achieve them. They include total literacy by 2020, average economic growth of 9 to 10 per cent for the next 20 years, slashing the birth rate to 0.5 per cent, and transforming the state, whose economy today is dominated by agriculture and industry, into one driven by services.

The challenge is huge. Take literacy. Andhra Pradesh ranks 26 out of India's 32 states and union territories, with an overall figure of 44.1 per cent. Only 32.7 per cent of women (according to the 1991 census) can read and write. Although the number of primary schools has doubled in 40 years, thedrop-out rate is 52 per cent.

The state's growth rate has also lagged behind the national average, while years of crudely populistic government in the 1980s and early 1990s bumped up public expenditure and the state now runs a fiscal deficit of 3.4 per cent of gross domestic product.

Yet this is the state that Naidu intends, if he wins a mandate, to transform within 20 years into the first sub- continental Tiger: emulating the revolutions of Japan, Korea, Singapore and the rest.

This election is therefore a crucial hurdle. "It's the most important election not just for me but for the whole country," he told me as we buzzed above the Deccan plateau in his tiny helicopter between campaign meetings. "I'm going for reform, and if I succeed, politicians in other states will have to go for reform, too."

Andhra Pradesh has already taken some important steps. It has opened the doors to foreign investment, welcomed India's first two private power plants, and with High-Tech City has made the state a magnet for information technology companies, domestic and foreign. Software development has been India's one outstanding success in recent years, and Hyderabad is mounting a challenge to Bangalore's primacy in this field. A few hundred yards from Cyber Towers, the half-built offices of software firms such as Infotech, Baan and SoftSol dot the landscape.

But trophies such as these open Naidu to the charge that he is only making the middle-class rich. "The masses of the poor who have no drinking water and will never set eyes on a computer are untouched by these things," says one local journalist.

Naidu is aware that the success of his revolution depends on abolishing poverty, and he has launched a fleet of initiatives to achieve that. They include encouraging hundreds of groups of women in the countryside to save and start businesses together; rationalising irrigation in parched regions; and setting up urban bazaars, where farmers can sell their produce direct to city consumers, bypassing middlemen.

Poverty and unemployment in the city is a growing menace, and Naidu is fighting it with a scheme called "Chief Minister's Empowerment of Youth." Under the scheme, a group of between five and seven young people with a workable business plan receive loans of 100,000 rupees - about pounds 1,500 - to set up in business. The scheme started in March, and already hundreds of microbusinesses are taking their first hopeful steps in the dusty and crumbling back streets of Hyderabad and other towns. They include grocery stores, rice shops and a shop run by a Muslim woman and her daughters selling saris.

Perched on someone's roof, sheltered by a canopy of sacking, a skinny young man in a vest and his bubbly female partner run a photo lamination business: turning people's snaps into mantelpiece ornaments by pasting them on to wood and laminating them. Before starting in business, all these people were either poorly paid employees or sitting on their haunches doing nothing.

The scale of these enterprises remains tiny. If each of the partners can make 2,000 rupees per month - less than pounds 30 - they can stay afloat. But it is on tiny coals such as these that Chandrababu Naidu must blow if he is to turn Andhra Pradesh into the next Japan. Naidu believes he can do it.