The state is focused approach to attract around Rs 2.5 lakh crore investment in various thrust sectors to create 2.5 lakh employment.
Andhra Pradesh has been ranked no. 4 in the country on SDG India Index rankings for 2020-21. The state has also been ranked as the top state in the country since 2015-16 for the ‘Ease of Doing Business’ by the Government of India
Being at helm of the seventh-largest state by area covering an area of 162,975 km2 (62,925 sq mi) and tenth-most-populous state in India, Andhra Pradesh Chief Minister Jaganmohan Reddy has set the agenda for the equitable and inclusive Industrial and Infrastructure Development with a focused approach to attract around Rs 2.5 lakh crore investment in various thrust sectors to create 2.5 lakh employment.
In an interaction with TheNFAPost Editor-in-Chief N V Vijayakumar, Andhra Chief Minister Jaganmohan Reddy amplifies his mega plan to develop three Industrial Corridors under the “National Industrial Corridor Development Programme” and Petroleum and Petrochemical Investment Regions (PCPIR) along with a focussed approach on industrial growth with investments of Large & Mega project categories in areas lik Automotive and Auto components, Agro and Food processing, Biotechnology, Bulk drugs and Pharmaceuticals, Electronics, Textile, among others.
How do you differentiate Andhra Pradesh and its investment potential?
Andhra Pradesh is a coastal state with double digit growth rate of 11.43% p.a. (2021-22), contributing 5.05% of Indian GDP (@ constant prices). More than 4.7% of the country’s national highway (7,165 km) and more than 6.1% of country’s railway network (7,714 Km) is located in Andhra Pradesh. According to AP State Warehousing Corporation (SWC), the State owned godowns have storage capacity 676 MMT, operating with utilization of 80%.
My State is focusing and promoting emerging sectors that are in demand globally (while ensuring the sustainability aspects). Renewable Energy has been our focus, we are expanding the RE base through support to the green energy, EV manufacturing, ethanol manufacturing and pumped storage. Some of the other priority areas are economic corridors, petrochemical regions, bulk drug parks, logistics policy etc.
Can you give an overview of infrastructure for Industrial Development?
Andhra Pradesh is the only state implementing three Industrial Corridors under the “National Industrial Corridor Development Programme”, which will boost industrialization across the state. These corridors are:
Visakhapatnam – Chennai Industrial Corridor (VCIC)
Chennai – Bengaluru Industrial Corridor (CBIC)
Hyderabad -Bangalore Industrial Corridor (HBIC)
Industrial plots, only post complete pre-clearance and zoning, in order to facilitate fast set up and risk-free operation. Develop MSME Parks with basic facilities. Offer Plug & play facilities including ready built factory shell. Develop Mega industrial parks with sector specific common facilities.
Also constituted Industrial water SPVs wherever required to bring water to door steps & explore options to make power available for industries at cheaper price. Setup of Incubation centers to encourage start ups in hi tech industries.
The government of Andhra Pradesh places significant thrust on adoption of sustainable green measures across industries in the state. Common facilities like Waste water treatment, Continuous Emission Monitoring System (CEMS) etc. would be setup in new APIIC Industrial parks.
Our government is setting up 26 secondary food processing units at one in each parliamentary constituency, with an investment of Rs.3500 Cr, holding potential to create direct employment to 10,000 people and indirect employment to 23,000 people.
We are also developing 9 new fishing harbors in two phases with an outlay of approx. Rs 4,000 Cr of investment. These facilities will benefit 60,000 fishermen directly and will create additional employment of 35,000 from allied activities such as ice plants, cold storages, pre-processing, fish transport, marketing which will be operationalized by 2023-24 in a phased manner.
What is the kind of investments that have been coming to Andhra Pradesh ?
A- The state of Andhra Pradesh has embarked on a journey of consistent growth, towards Sustainable Development. It has been ranked no. 4 in the country on SDG India Index rankings for 2020-21. The state has also been ranked as the top state in the country since 2015-16 for the ‘Ease of Doing Business’ by the Government of India, offering a robust industrial infrastructure, first-class connectivity and skilled workforce, making it a globally competitive investment destination.
All these investments in the state are a clear indication of the opportunities that come to light for the MSMEs, strengthening the industrialisation wave in Andhra Pradesh.
The MSME sector in AP has been resilient to the pandemic. Despite the Covid-19 pandemic, 38,200 MSMEs were established during the year 2020-21, with an investment of Rs. 4985.04 crores and providing employment to 2,81,199 persons. This is a positive indicator for the growth of MSMEs in the state.
The Government of Andhra Pradesh intends to provide the best-in-class infrastructure, zero hassle setup, skilled labor availability and end to end handholding support for units to provide an industry friendly environment at par with the international standards. In addition, the focus of the Government is to reduce risk of doing business to the extent possible.
One of the key highlights is the proposal to setup a multi-faceted business enablement centre, christened as “YSR AP One” which will be a one stop shop offering business/ and investor support services.
The state government has organized over 200+ CEO, Embassy, and In-bound delegation interactions, 50+ Sector-specific roadshows and 15 Ministerial-led national and international investment roadshows since 2019-20.
One such investment outreach is the Dubai Expo2020 led by the Late Minister Sh. Gowtham Reddy to Dubai from 14 Feb to 17 Feb 2022 showcasing 12 themes to various investors, including Advantage Andhra Pradesh, chemicals and petrochemicals, Agri and food processing, renewable energy and electric mobility, IT and electronics, tourism and culture, economic growth, environment and social governance, industrial parks, and health hubs.
What are the focus sectors of the government as part of Global Investors Summit 2023?
A- The following sectors have been identified as thrust areas for which the state government is undertaking extensive investor outreach. These are –
1. Chemicals & Petrochemicals
2. Pharmaceuticals & Bulk Drugs
3. Textiles & Apparels
4. Automobiles & Auto Components
5. Electronics & IT
6. Agro & Food Processing
7. Engineering
8. Medical Devices
9. Defence & Aerospace
10. Machinery & Equipment
11. MSME
12. Futuristic Segments of Industry
i. Industry 4.0 Manufacturing
ii. Biotechnology,
iii. Green Hydrogen
iv. Electric Vehicles
v. Renewable Energy Components Manufacture
The industry sector grew at a growth rate of 12.78% during FY 2021 – 22. Key industry segments contributing to the industrial growth in terms of investments of Large & Mega project category are Automotive and Auto components, in Andhra Pradesh include Agro and Food processing, Biotechnology, Bulk drugs and Pharmaceuticals, Electronics, Textile, among others.
It must be noted here that Andhra Pradesh currently houses over 534 Industrial estates and 293 industrial parks with prominent ones like Sri City, APSEZ, Jawaharlal Nehru Pharma City, Brandix India Apparel City (BIAC), etc.
The other major industrial projects that are currently in progress include Visakhapatnam- Chennai Industrial Corridor (VCIC), Chennai Bengaluru Industrial Corridor (CBIC) and Hyderabad Bengaluru Industrial Corridor (HBIC).
Total exports from Andhra Pradesh in 2021-22 is about Rs. 1,57,398 Cr ($ 19 Bn USD) with a growth rate of 13% CAGR in the last three years. The major exports from the State are Drugs & Pharmaceuticals, Marine products, Agriculture produce, and Agro- based products, Handicrafts, and Engineering products.
What are the steps being taken by the AP government to attract more investments?
Our Industrial policy is a major pull towards the state. The core theme of the industrial policy of Andhra Pradesh is to provide support to industries across the business value chain – from approvals to setup & going beyond setup, supporting operations & scaling up.
We would like to mention some salient features of the policy :
MSME ReStart Package and Release of Industrial Incentives for Revival –
Factoring the hardships faced by the MSMEs during the Covid-19 pandemic, we have also launched the Rs 962.42 Crore ‘ReSTART’ Package in May 2020 which helped about 8,000 MSMEs to restart their operations.
We have released over Rs 1,160 crores towards incentives to 11,115 units in last two years since 2020. MSME : 11,059 units || Rs. 1325 Crores and L&M: 56 units || 334.85 crores
We have also supported MSMEs by restructuring the loans / providing them with additional working capital loans, where over 1,08,292 MSME accounts were restructured with an amount of Rs 3,236.52 crores under YSR Navodayam.
Can you elaborate on the State Industrial Policy and other interventions?
We have envisaged to attract new MSME enterprises as part of AP MSME Vision 2030. Towards this, we have launched the ‘AP Industrial Development Policy 2020-23’ with a special emphasis on MSME sector. With special focus on SC / ST Entrepreneurs, we have also released ‘YSR Badugu Vikasam Policy 2020-23’ for handholding and their rapid growth.
Further we brought in Oxygen Manufacturing Policy 2020-22, Retail Parks Policy 2021- 26, AP IT and Electronics Policy 2021-24 for attracting high-end technology investments with a renewed focus on serving the needs of the state.
To offer Special incentives for women entrepreneurs belonging to SC/ST/BC and Minority Communities. With reserve 16.2% and 6 % of plot area in the APIIC parks for SC and ST Entrepreneurs respectively. A dedicated cell under for handholding SC/ST/BC/Minority category entrepreneurs
AP is home to the country’s second longest coastline giving it access to global trading routes through ports, that can serve vast stretches of Indian hinterlands. Therefore, we are bringing the ‘Integrated Exports and Logistics Policy’ inline with vision of the ‘PM Gati Shakti National Infrastructure Master Plan”. We are developing ‘Exports-led Infrastructure’ with upcoming ports, airports, road and rail connectivity to the hinterland, to drastically reduce the cost of logistics, make our manufacturers globally competitive and there-by our exports, scalable.
Where do you stand in the Ease of Doing Business?
The state is ranked no. 1 consistently since 2019, as per the Business Reform Action Plan under Ease of Doing Business. We have successfully implemented over 301 reforms under the Business Reform Action Plan 2020-21. For the year 2022, we have submitted 352 reforms to Govt of India, of which 151 reforms have been already approved.
Further, we have launched “Industries-Spandana” as a One-Stop grievance redressal/query resolution platform for industries. In addition to lodging and tracking the real-time status of industry-related queries and grievances, the platform also offers “Business Advisory Services” to aspiring budding entrepreneurs, providing access to opportunities in the state.
Quality manpower is very much required for steady growth of Industry. How you are looking at Education and Skill Development initiatives in the state?
Andhra Pradesh has over 71% of its total population under working-age group. There- by, to bridge the skill gap between industry and academia and to ensure continuous supply of workforce, we are establishing 26 world class skill colleges one in each parliamentary constituency, 1 addl. skill college in Pulivendula, and 1 Skill University, with a curriculum developed based on industry needs. High end Skill University to focus on cutting edge analytics and industry 4.0 (smart manufacturing using IoT, predictive maintenance).
We have launched ‘Mana Badi Naadu-Nedu’ to strengthen the infrastructure and transform the existing infrastructure of schools – from primary education to technical education. Further, under ‘Jagananna Amma Vodi’, over INR 5715.32 crores in financial assistance has been transferred to 43.96 lakh eligible mothers for sending children to schools. Under the Jagananna Vidya Deevana programme, 2,17,238 students from the Scheduled Castes, 45,450 students from the Scheduled Tribes, 5,30,995 children from the Backward Class, 1,02,707 students from the Kapu community, and 70,964 students from minority communities are receiving benefits.
We have also embarked on a “Samagra Parishrama Survey 2020” (Comprehensive Industrial Survey) to capture industry requirements that will map the need for skilled, semi-skilled and unskilled labour across the state and sectors, especially MSMEs.
The Government of Andhra Pradesh envisages to align the existing technical and vocational education and training (TVET) ecosystem to the industrial demand and making the candidate market relevant with the ultimate objective to provide gainful employment. Further the Government desires to improve the efficiency of scheme delivery at the grass root level. The first steps taken by the Government in this direction are creation of ward secretariates and reorganization of districts by increasing the number of districts from 13 to 26. Similarly for grass root level penetration of skill development the following skill ecosystem is being envisaged:
i. Skill Hub – Skill hub is a legislative assembly constituency level unit that is envisaged to primarily cater to the industrial manpower requirement of the respective legislative assembly.
ii. Skill colleges – Skill colleges are parliamentary constituency level unit that is envisaged to primarily cater to the respective sectoral manpower requirement of the district and the state.
iii. Skill University – Skill University is a state level institution that will oversee the functioning of finishing skill colleges and skill hubs.
What are the investment targets the AP government has set for itself for next two to three years? How do you plan to achieve the targets?
The government has 88 projects are under active implementation with total investment of Rs 2,35,125.60 Crore with a potential to create employment to 2,36,806 persons.
Further, the Govt AP is offering park-level incentives at YSR Jagananna Mega Industrial Hub, under the YSR Jagananna Mega Industrial Hub Policy 2021-24 to attract an investment of INR 25,000 Cr with a potential to generate employment for 75,000 people, and and YSR Electronics Manufacturing Cluster Policy 2021-24 to attract an investment of Rs 9,000 Cr with a potential to generate employment for about 25,000 people.
The objectives set for the next 2 to 3 yrs. are as follows :
– To create employment for the youth of the state
– To match the national average in industrial GVA per capita
– To plan balanced growth across regions and communities
– To achieve environmentally sustainable growth
Which are achievable through the following guiding principles mentioned below:
– Equal focus on both existing units and prospective investors: GoAP focus on supporting existing units scale up and address the issues they face in addition to making state attractive to prospective investors as it believes that addressing issues of existing units is critical to industrial growth of the state
– Ensure that the key unlocks for focus sectors are factored in the interventions: Detailed sector specific initiatives are incorporated as key interventions to unlock the potential of the thrust sectors in Andhra Pradesh.
– Focus on asset creation in both infrastructure and skill pool development: The focus of the policy is on asset creation – providing ready built pre-cleared facilities and skill development centers which can serve as base for growth of state
– Reduce upfront cost and time of setup: Reducing cost and time to setup, by laying emphasis on making available ready built facilities at lower upfront cost on lease bases.
– Focus on de-risking businesses through end to end handholding support : Emphasizing on supporting units across entire value chain by including interventions to support units address issues across strategy, financing, marketing, operations improvement etc.
– Special support for socioeconomic progress of SC/ST/BC and Minority Communities especially women : The ID policy to lay special importance to encourage increased participation of SC/ST/ BC and Minority communities especially women
What are the incentives being offered to attract investments?
A- 100% Reimbursement of net SGST accrued to the State for 5 years or 100% fixed capital investment, whichever is lower, from the date of commencement of commercial production, linked to employment.
Direct Employment Generated SGST reimbursement
<1000 50%
1000 to 2000 75%
2000+ 100%
Projects with direct employment generation of 2,000 will be accorded a mega- industry status.
The Government may extend tailor-made benefits to mega projects to suit particular investment requirements on case to case basis based on the gestation period, pioneering nature, locational aspects, technology, project’s importance to the state’s industrial growth and its ability to generate large scale employment for people, overall economic impact or revenues for the state.
GoAP places significant thrust on adoption of sustainable green measures across industries in the state. Common facilities like Waste water treatment, Continuous Emission Monitoring System (CEMS) etc. would be setup in new APIIC Industrial parks.
Under the “YSR Japananna Mega Industrial Hub Policy 2020-23” and the “AP Electronics Policy 2021-24” offering UPTO 100% of Fixed Capital Investment (FCI) through provision of the state- level PLI incentives on the top of Govt of India PLI to offer incremental advantage to the investors. In addition to the PLI, there will be further investor benefits in terms of financial incentives and subsidies, especially for utilities like power invoiced at just Rs 4.50 per unit at YSR EMC.
Another notable feature of the policy is that deemed approvals will be provided to industrial units in notified EMCs for manufacturing of both White and green categories of Electronics industry, with a condition to formalize all approvals within 3 years. This would ensure faster operation set-up so that the benefits of production would reach all strata of the society sooner.
What efforts are being made to tap the experience of successful industrialists from Andhra Pradesh to attract more investors into the State?
A- We are not only looking at successful industrialist but also inspiring industrialists , for which YSR AP One: A multi-faceted end to end business enablement centre GoAP recognizes the utmost importance of the following for any new/existing investor for their success-
– Handholding during pre-establishment and setup of the unit
– Providing efficient post setup support
– Ensuring backward and forward linkages
– Accessing market and new technologies among others
To this extent, the government will integrate services from multiple state agencies under ‘YSR AP One’, a central multi-faceted capability center which will offer the following 10 services to ensure that the investors are set up on the path for success.
Entrepreneurship Facilitation Cell to maintain repository of business models and plans and support aspiring entrepreneurs in the state with knowledge support to start new venture
Market Research Cell to undertake market research, develop sector wise resource repository of market updates and new developments.
Marketing and Branding Cell to support businesses in marketing their products locally and globally. This cell also builds and promotes state specific brands (e.g. Guntur Chilly)
Sales Support Cell to connect units in state with potential buyers. This cell will operate as Key Account Managers (KAM) for various exporters, distributors, and retailer both in the country and across the world
Scheme Support Cell to support units in state in availing central and state government schemes.
MSME Revitalization Cell to proactively assess MSMEs and revive and reposition sick MSMEs. It also provides seed capital fund for MSMEs Business Enablement Cell supports businesses in getting all approvals and addressing all grievances that may rise post setup
Investor Reach-out Cell with priority sector and geography desks for focus investor reach out
Incentive Management Cell to assess unit performance, estimate incentives and ensure timely disbursement of incentive
Special Category Cell to handhold SC/ST/BC/Minority entrepreneurs throughout the life cycle.
And while doing this, we are not losing the focus on inclusiveness. For e.g. our nine fishing harbours are integrated with coastal community development covering coastal tourism & disaster risk reduction, these project alone with create over a lakh new direct and indirect jobs. Similarly, better outcomes for the people of Andhra remains our primary focus.