Chief Minister N Chandrababu Naidu, who is pitching AP as ‘Sunrise State’, has come up with an investment-friendly industrial policy aiming to attract Rs 12.5 lakh crore in the next 15 years.
It was Chief Minister N Chandrababu Naidu, who in his earlier stint as the CM, swung the predominantly agrarian economy of Andhra Pradesh to a state with substantial industrial contribution. During the period 1993-94 to 2003-04, industrial contribution rose substantially in AP by 1.74 %. However, subsequently from 2003-04 to 2013-14, the state could not consolidate the gains made earlier and in fact lost momentum despite the golden opportunity presented by a vibrant economy and buoyant revenues. As a result the industry sector in the state decelerated and its share fell from 24.33% to 20.62%.
Acutely aware of the importance of industry as an engine to propel growth and provide employment, Chief Minister N Chandrababu Naidu is presently making a concerted effort to make the residuary state of Andhra Pradesh investor friendly.
Towards this end, the Andhra Pradesh government has set an ambitious target of attracting investments worth Rs 12.5 lakh crore in the next 15 years. As part of this, it has unveiled the ‘Industry Mission 2015-20’.
Launching the mission along with the new single-desk clearance portal in Visakhapatnam recently, Chief Minister N Chandrababu Naidu termed AP to be the best investment destination in the country.
“The share of industrial sector output in the state GDP at present is about 21 per cent. We are targeting to increase this to 30 per cent by 2029,” the Chief Minister said, adding the state was looking at attracting investment worth Rs 2 lakh crore in the next five years and create one million jobs during the period.
“Last fiscal, the country’s GDP grew 7.4 per cent while AP had achieved a growth rate of 8.4 per cent. Our target is to attain a sustainable double-digit growth starting this year,” he said.
Assuring industrialists of all facilities like land, water, power and infrastructure, the CM listed out many initiatives, including acquiring one million acres for setting up industries, besides ensuring availability of water and power.
Given that recent surveys estimate India’s growth rate will surpass global superpowers like the United States, the Industry Mission of Andhra Pradesh will contribute to ‘Make in India’ initiative which will give a major thrust to the national as well as state’s economy.
Industrial development policy aims to increase the contribution of manufacturing in GSDP from 9.95% in 2013-14 to 15% by 2020, the Chief Minister said, adding further that it aims to increase the contribution of industries to GSDP from 20.7% in 2013-14 to 25% by 2020.
The efforts of State Government have not gone unnoticed by the industry. “The situation is not the same anymore. The Andhra Pradesh government is pushing and Chandrababu Naidu is a good salesman,” said Rafeeque Ahmed, chairman, Federation of Indian Chambers of Commerce and Industry, Tamil Nadu. Japanese truck maker Isuzu, which had initially considered Chennai for a factory, recently invested $3,000 crore in Sri City.
“The world is bullish about India and Andhra Pradesh in particular,” he said addressing a galaxy of industrialists from across the world, who came to attend the function and participate in an interactive session with him. The state is set to emerge very strong individually in the coming years as an industry-friendly policy has been formulated, which will be implemented in the right earnest, the Chief Minister said.
Expressing confidence over his Double Digit Growth agenda, the CM said, “Double digit growth is a realistic and achievable target for both the country and the State.” He said the State was rich in minerals and had a good working climate. “Visakhapatnam in particular is the major port city in the State and suitable for investment in all sectors. It will emerge as the economic capital of the state,” he said.
Land Allotment to Companies
On the occasion, the Chief Minister also handed over letters of allotment of land to four companies: Asian Paints for setting up a manufacturing unit in Visakhapatnam district with an investment of Rs. 1,300 crore; ONGC for laying a gas pipeline near Kakinada with an investment of Rs. 355 crore; Kribhco for setting up a fertiliser unit in Nellore district with an investment of Rs. 630 crore; and Kurlon for setting up a mattress unit in Chittoor district with an investment of Rs. 70 crore.
MoUs worth 35,745 Cr Signed
The State Government also signed 46 MoUs with 46 companies from India as well as from countries like Japan, UAE, Canada, etc, attracting total investment worth Rs 35,745 crore during the event. These MoUs include investments in sectors such as petrochemicals, infrastructure, electronics, manufacturing, food processing, textile, automobiles, and others, thereby generating 72,210 new jobs in the state. As part of the MoUs signed, 48 units will be set up in the state, spanning across various districts. Among these, one company will set up three units. Among the units, 17 will come up in Chittoor district, six each in Kurnool and East Godavari, three in West Godavari, two each in Nellore, Kadapa, Anantapur, Visakhapatnam, Guntur and Krishna and one in Prakasam district.
HP to set up refinery
Among the MoUs signed was that also with Hindustan Petroleum Corporation Limited (HPCL), for investing nearly Rs 17,000 crore in setting up a 9 mmtpa refinery at its existing facility at Malkapuram in Vizag that currently has an 8.3 mmpta capacity refinery. HPCL director (refineries) BK Namdeo said the new facility would be used for producing motor spirits and diesel and that environment friendly technology will be used by HPCL to develop the refinery. He said the project will be completed within 42 months from the time environment clearance is issued by the Centre.
Auto Policy Unveiled
Naidu also unveiled the AP automobile and auto components policy, aiming for Rs 20,000 crore investments, as well as the biotechnology policy and textile policy gunning for investments worth Rs 6,000 crore each. As per the policy, the auto component companies will receive various incentives and concessions from the state government for promoting automotive manufacturing in Andhra Pradesh.
Isuzu makes use of new Auto Policy
Isuzu Motors India Pvt Ltd, a subsidiary of Isuzu Motors, Japan, which is setting up its manufacturing plant at Sri City, signed an MoU with the state government to facilitate investment by its suppliers under the state’s Automobile and Auto Component policy 2015-20. Takashi Kikuchi, managing director, Isuzu Motors India, inked the MoU with state government in the presence of Chief Minister Naidu. Seven auto component companies nominated by Isuzu Motors India also inked MoUs with the state government. Kikuchi said, “The Sri City-located facility would likely commence commercial operations by early 2016, with the initial production capacity at an annual 50,000 units. This would be scaled up to 120,000 units a year, with the accumulated investment of Rs 3,000 crore, and was expected to generate around 3,000 jobs.”
Japanese interest in capital
After the launch of the AP government’s Industry Mission in Visakhapatnam, the CM headed to New Delhi for a bilateral meeting with Yoichi Miyazawa, Minister for Economic Trade and Industry, Japan. During the meeting, Miyazawa informed the Chief Minister that the Japanese ministry had conducted a preliminary study on Andhra Pradesh and identified certain areas of collaboration in the State, including capital city construction.
Investments flowing in
Due to the efforts of the Government during this one year, the State has been able to secure more than one lakh crore worth investments. While investments worth Rs 82,708 cr by large industries, creating a job potential for 4,24,408, were grounded, another Rs 19,000 cr was invested by MSME sector, creating 12,08,642 jobs after this Government took over. The State Investment Promotion Board approved 8 mega investment proposals with a total investment of Rs 25,286 cr. If the aggressive policies adopted by the State Government are anything to go by, it would be safe to say that the target of attracting Rs 2 lakh crore investments by 2020 would be easily crossed.