Andhra Pradesh Investment Feature

Giant leap For Andhra Pradesh

Investments worth Rs 3,07,178 crs in the pipeline; CM happy clearing investments worth Rs 25,672 crs in one day compared to Rs 37,993 crs in last 7 years

Andhra Pradesh made a gian leap in the industrial map of the country in one day. The Chief Minister N Kiran Kumar Reddy on a single day cleared industrial investment worth Rs 25,672.40 crores (compared to Rs 37,993 crs in Major industries in last 7years) at the State Investment Promotion Board meeting at Secretariat on last Wednesday (23rd Feb). He has cleared 25 units with an employment potential of 41,406 which will bring revenue to the State Government through VAT Rs 878.30 crores annually. It is not only a boon but a record in the industrial growth of the State.

The Chief Minister was informed that investments worth Rs 3,07,178 crores are either under implementation or on the pipeline. These include Bharat Dynamics Limited units at Anantapur for manufacturing missiles, NTPV-BHEL Power Plant Equipment Project at Mannavaram, Srikalahasthi (for which the Prime Minister has laid the foundation stone recently), Bharat Electronics Limited at Anantapur etc.

This one day investment clearance of Rs 25,672 crores is compared to a total of Rs 37,993 crores investment in Major and Medium Industries from 2004 to 2011. However there was also an investment of Rs 13,105 crores in Small Scale and Tiny Industries during this period thus a total of Rs 51,098 crores. The average investment between 2000 to 2004 was a mere Rs 37,036 crores in Major and Medium industries and between 1995 and 2000 was only Rs 11,058 crores.

The new Industries cleared by the SIPB are in the categories of Food & Agro (5 units), Automobile (3), Cement (7), Glass (1), Steel and Ferro Alloy (5), Mineral (sand) (1), Chemical (1), Ceramic (1) and Tyres (1) spread over 14 districts. The State is expected to get a total VAT of rs 878.00 crores. Meanwhile the Chief Minister ordered that the incentives due (reimbursements of VAT etc) to the new units should be cleared at the earliest.

The New State Industrial Policy offers the best incentives and infrastructural facilities to investors and new industries. The Power tariff for industries in Andhra Pradesh is also the lowest in the country. Meanwhile SIPB agreed to exempt the new industrial units form payment of Electricity duty on captive power generation for self consumption. The new 25 units cleared by the Chief Minister and SIPB will be spread over 14 districts of East Godavari, Krishna, Nellore, Srikakulam, Vizianagaram, West Godavari, Anantapur, Chittoor, Kadapa, Kurnool, Adilabad, Mahbubnagar, Medak and Nalgonda.

The Investments in the pipeline include Rs 50,000 crores in the next four years. The public sector investments to the State are flooding. Six PSUs have already submitted proposals to the Government for investing Rs 44,800 crores. The Industries officials have informed that this amount may further increase. The HPCL has decided to develop refinery complex at Visakhapatnam by investing Rs 40,000 crores. This project is being set up in the PCIPIR. 

Chief Minister said the ultimate objective of the Government is to make Andhra Pradesh as the Number One industrialized State surpassing developed States like Gujarat, Maharashtra, Tamil Nadu and Karnataka. Officials said the latest industrial policy envisages to achieve a manufacturing growth rate of about 17%; create additional employment of over 5 lakh persons per year — 2 lakh directly and 3 lakh indirectly; with special focus on Micro, Small and Medium Enterprises (MSMEs) and Food Processing; facilitate reduction of regional and sub-sector imbalances; leverage the existing sectoral strengths as well as the natural resources for value addition.
Rising Andhra Pradesh
Andhra Pradesh, a much preferred destination for Investment…

Investment friendly, business friendly… The new look of Andhra Pradesh

Growth and inclusive economic development are the key focus areas for the State of Andhra Pradesh. A vital component of both is to attract investments. And Andhra Pradesh is taking aggressive steps for investment promotion in its varied industries. The focus is echoed in the words of the Chief Minister of Andhra Pradesh, N. Kiran Kumar Reddy, “This most happening and progressive State is recognized as the best investment destination in the country by the RBI. You have glorious and unlimited opportunities. You have the best infrastructure and lowest power tariff. You have the most pro-active Government and innovative industrial and IT policy. You have the single window clearance system, transparent procedures and ever friendly bureaucracy. You have the best international airport at Hyderabad and number of Institutes of excellence. All your interests will be taken care of.”

Inherent Strengths of Andhra Pradesh

Adding to the pro-active initiatives of the Government is the natural advantage which the state has in terms of its resources. Andhra Pradesh, with its rich natural resources, cultural heritage, world class infrastructure, skilled human resources and cosmopolitan outlook of people is developing into a much preferred business hub. The State has the longest coastline in the country and is extremely rich in natural resources be it oil, natural gas, coal, limestone, diamonds, gold.. 

The opportunity presented by the state is vast. According to Shri N. Kiran Kumar Reddy, Chief Minister, the state is now bestowed with four major ports and three more ports are under development. In addition to the already developed Rajiv Gandhi international airport at Hyderabad, all other airports in the State are now under upgradation. A natural gas grid is under formulation. Besides, the environment is very conducive for investments as law and order is well under control. The state is home for religious harmony with people of different faiths living together and practicing their religions in a harmonious environment. 

Andhra Pradesh has attracted industries across the segment like IT, Biotechnology, Pharma, Airlines, Business Schools, Educational enterprises, manufacturing industries… The state has won accolades for its proactive business environment. The latest World Bank survey report titled, ‘Doing Business in India, 2009’ has ranked Hyderabad as the 2nd best metro city. The CII has adjudged Andhra Pradesh as the best performing state in the manufacturing sector amongst the four southern states. It is ranked 3rd state in attracting high investments across segments comprising the infrastructure, manufacturing and service industries. 

Investment opportunities are abundant specifically in the manufacturing sector which includes the food processing, floriculture, agro processing, petrochemicals, metals, textiles, leather, mining, transport equipment, telecom and so on… The infrastructure sector is rife with opportunities, be it the areas of power, ports, roads, bridges, telecom facilities, development of coasts, waterways… Financial services, R&D and Tourism, particularly medical tourism, offer plenty of scope for investment. A project in any sector is viable with incentives from the Government and the availability of natural and human resources. Other pluses include: vibrant rise of 71 of the top 500 global corporates, 208 industrial development areas and industrial estates with basic facilities, Software technology park at Hyderabad, units of multi-national software companies and so on…

State Government Initiatives

The State Government is aggressively pursuing its goal of attracting investment in the State by working towards creating an environment and infrastructure in the State which will in turn attract investments. This policy works for both foreign direct investments and domestic investments in manufacturing, mining and infrastructure sectors. 

Industrial and Investment Promotion Policy — 2010-2015

The State has launched its new Industrial and Investment Promotion Policy (IIPP) for 2010-2015. A very ambitious policy, the best industrial policy in the country, it targets a growth of 17% an manufacturing, a total investment of Rs 75,000 crores over the five year period or an annual investment of Rs 15,000 crores. To spur investments, subsidy for micro and small enterprises has been raised from Rs 15 lakhs to Rs 20 lakhs. The policy offers a host of incentives more so targeting the micro, small and medium enterprises (MSMEs). The policy aims to transform Andhra Pradesh into a top investment destination in India and reduce both regional and sectoral imbalances. The thrust areas of the policy are MSMEs and food processing units.

March 2011

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