VIJAYAWADA: Out of the total 327 Memoranda of Understandings (MoUs) signed by the Industries and Commerce department as part of the ‘Partnership Summit and Sunrise Andhra Pradesh Investment Meet’ organised in Visakhapatnam for three consecutive years (2016 - 18) to establish multiple large and mega projects, only 45 projects (13%) have started operations. While another 92 projects are in the advanced stages of implementation, as many as 190 projects are either dropped or delayed.
Releasing a white paper on the performance of Industries and Commerce department between June 2014 and March 2019, Industries Minister Mekapati Goutham Reddy highlighted some of the lapses of the previous TDP government and spelt out his government’s policy for the development of industry sector and employment generation.
In the white paper, it was mentioned that despite having the provision as per the AP Reorganisation Act 2014 that the Centre will examine feasibility of the development of Vizag-Chennai Industrial Corridor (VCIC), the TDP government, instead of pursuing the matter with the Centre, had agreed to develop it with a loan of Rs 4,170 crore from Asian Development Bank (ADB). The previous government also decided to spend Rs 1,434 crore for the development of the VCIC. Subsequently, works have also been taken up under the VCIC. The loan from ADB and the additional budgetary support have put an additional burden on the State exchequer.
Land allotments
Between June 2014 and May 2019, as many as 2,931 land allotments were made by the Andhra Pradesh Industrial Infrastructure Corporation (APIIC) to companies. In the process, 14,995 acres of land was allotted and 2,931 companies proposed a total investment of Rs 75,683 crore, promising 5.28 lakh jobs. Out of 2,931 allotments, 574 (less than 20%) allottees have either implemented their projects or are under implementation.
As many as 1,939 allotments or 66% of allottees have not implemented their projects. Of these 1,939 allotments, 127 allotments (less than 4%) are within the timeline and 1,821 (62%) crossed the allowed timelines. Around 79% of total allotments were made in four districts -- Krishna, Chittoor, Visakhapatnam and Anantapur. It is seen that land allotment was not spread across the state. Thus there is an urgent need to focus on balanced industrial growth, the white paper said.
Incentives
In the past five years, based on the proposals received, State Investment Promotion Board and Cabinet have approved proposals for various incentives to certain companies. Certain proposals provided subsidy on the price of land allotted to the companies and the subsequent GOs to this effect were issued by various government departments without consulting the Industry Department or APIIC.
Based on the orders, APIIC has made allotments to 48 projects in the past 5 years where money paid by the company was lower than the cost of land fixed by APIIC’s Price Fixation & Infrastructure Committee. These allotments span across 2,923 acres in eight districts with most units in Chittoor and Anantapur (19 units each). The extent of land allotted was also highest in Chittoor (1,291 acre) and Anantapur (914 acres) for these concessional allotments. Following GOs, APIIC provided a discount on land cost for Rs 619 crore from June 2014 to June 2019.
Way Forward
To persuade the Centre to grant Special Category Status to AP
Put efforts to get VCIC included under NICDIT and get funding. Additionally, it will work with all PSUs such as HPCL, GAIL, SAIL, MECON in order to make the petrochemical complex and Kadapa Steel plant projects a reality
To make every effort to quickly disburse the incentive backlog for MSME, large and mega units
All investments to be routed only through Industries, Infrastructure, Investment and Commerce (IIIC)
From June 2014 to March 2019, the TDP government released Rs 3,675 crore (28,083 claims) towards industrial incentives, out of which Rs 1,816 crore have been released as industrial incentives