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Andhra Pradesh emerging as an ideal destination for investments

AP govt identifies industrial zoning as a key focus area to ensure planned industrial development, says Advisor on Industries

Sridhar Lanka, Advisor to Government of AP on Industries and Commerce
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Sridhar Lanka, Advisor to Government of AP on Industries and Commerce

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Endowed with a 974-km coastline, second largest after Gujarat, plenty of natural resources and recognition as the top State in ease of doing business ranking, Andhra Pradesh has emerged as an ideal destination for investments. Having plenty of opportunities for investments in biotechnology, IT, textiles, leather, tourism, education, automotive and manufacturing sectors like steel and electronic gadgets and components, the State is on fast-track development mode in the field of industrialisation under the leadership of Chief Minister YS Jagan Mohan Reddy and Industries Minister Mekapati Goutham Reddy. The government has identified thrust areas with focus on employment opportunities to the locals, asset creation and sustained development in all 13 districts unlike in the united AP, according to Sridhar Lanka, Advisor to Government of AP on Industries and Commerce.

In an exclusive interview to Bizz Buzz, he said the State is laying basic foundation for industrial growth by providing quality human index and enhancing the living standards of the public. Port-led development is being given a fillip and the government has already sought investments into container-manufacturing to ensure faster evacuation of cargo

For micro and small enterprises, 15 per cent investment subsidy is given on fixed capital investment limited up to Rs 20 lakh, whichever is lower. The subsidy will be released only after three years of continuous operation with at least 80 per cent efficiency in all parameters i.e. employment and production

'YSR AP One', a multi-faceted business enablement centre, acts as a one- stop resource and support centre for industries to provide handholding support to investors during pre-establishment and setup of industrial units, post-setup support, backward and forward linkages and access to market and new technologies


Where does Andhra Pradesh stand in industrial development in India? Is there any timeline to improve it further?

We are creating "social infrastructure" first so that it can enable better living standards to people of the State. A welfare State can always flourish in the long run as it shall have unlimited potential for growth due to an increase in their standard of living. Whenever a government provides decent living standards to its people, that State shall prosper. Investors would want to set up businesses or units where there is stable governance and minimal living standards are assured by the government. AP is working on these lines. From June 2021, development, industrialisation and employment creation will be the focus of the government.

What are the salient features of New Industrial Policy formulated by the YSRCP Government?

The policy lays significant focus on supporting existing units, scale up and address the issues they face in addition to making the State attractive to prospective investors. The policy factors in all key interventions to unlock the potential of thrust areas. The focus of the policy is on asset creation and providing pre-cleared facilities and skill development centres which can serve as a base for growth of the State.

We have identified industrial zoning as a key focus area to ensure planned industrial development and provide a risk-free, investment-friendly environment for setting up and operating industries in the State with minimal impact on the environment.

We are introducing 'YSR AP One', a multi-faceted business enablement centre which acts as a one-stop resource and support centre for industries to provide handholding support to investors during pre-establishment and setup of industrial units, post-setup support, backward and forward linkages and access to market and new technologies

What are the incentives offered to investors? What are the focus areas for growth and creating employment opportunities?

The major incentive a prospective investor gets, under the new policy, is reimbursement of State Goods and Services Tax for five years (capped to Fixed Capital Investment) for medium, large and mega industries linked to employment creation.

The current lease and buy models for land allotment are being replaced with a composite lease plus buy model, where an industrialist gets to purchase the land after successfully running his unit for 10 years.

For MSMEs and large enterprises, 15 per cent investment subsidy is given on fixed capital investment limited up to Rs 20 lakh, whichever is lower. The industry policy offers interest subsidy of three per cent on the term loan taken for fixed capital investment by new MSEs for five years.

We are offering a special package for women entrepreneurs belonging to BC/ minority communities, 35 per cent investment subsidy on fixed capital investment limited to Rs 50 lakh for MSEs. A special package is being given to entrepreneurs belonging to SC /ST communities under Badugu Vikasam.

In all packages, the subsidy will be released only after three years of continuous operation with at least 80 per cent efficiency in all parameters i.e. employment and production.

How do you find the response to the decision to ensure 75 per cent of jobs reserved to locals?

The response has been good so far except in IT related areas where the demand for skilled workers is very high and we have received few requests from companies for some amendments, We are working on it.

What are the steps being taken to develop AP as a logistics hub?

We are building three new major ports and would like to take full natural advantage of 974-km coastline. Located very near to adjacent land locked States, AP is the ideal destination for their logistics needs. We would like to create inland waterways so that freight movement can be easily carried out. Also, we have identified the shortcomings in port related activities (like shortage of containers). We are talking to various container manufacturers to set up units near existing and upcoming ports. Already, a proposal was given to Concor and they are studying it. The State government would also like to start Maritime University for skilled labour availability in maritime related activities.

What initiatives are being taken to give a fillip to port-led development?

We are drawing up fresh plans for port-led development with focus on Machilipatnam and Ramayapatnam areas to ensure that this stretch of the central coastal hinterland realises its potential. Emphasis is being laid on promoting food processing units, textile and marine clusters and so on. Department of Industries and Commerce is working out the modalities for them.

Santosh Patnaik
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