HYDERABAD: The Sakala Janula Samme and frequent power holidays in the past 32 days have caused industry a loss of Rs 8,750 crore, according to the Federation of Andhra Pradesh Chambers of Commerce and Industry (FAPCCI). This loss translates to 2.9 per cent of industry's annual production in Andhra Pradesh besides dragging the state's GDP down by 0.72 per cent.
The collective job loss across the state due to social unrest and economic distress is estimated at about 60,000 in the past one month.
In a representation to chief minister Kiran Kumar Reddy, the federation said the industrial situation was quite critical and deteriorating by the day with power available only for three working days in a week including four-hour power cuts during peak hours.
This meets only 40 per cent of industry's power requirement and, as a result, companies are losing 60 per cent of their production capacity. "Many micro, small and medium enterprises have become sick and many are on the verge of becoming sick. Even medium and large units have plunged into financial problems," said V S Raju, FAPCCI president.
The growing industrial sickness was leading to stagnation or even negative industrial growth, with attendant ill effects such as drop in tax revenues affecting the state’s developmental and welfare schemes. "The investor's confidence is also shaken. New investments and expansions are either being cancelled or delayed." The share of manufacturing sector in the state is around 11 per cent as against the country’s share of 16 per cent of GDP.
While the Union government has set a target of 25 per cent, with all these issues, it would be a herculean task to raise it to 25 per cent, he said. "The strikes, rasta-rokos and power cuts are compounding the problems of industry, which is already being impacted by the slowdown in the world economy mainly due to sovereign debt problems faced by Europe and the US," Raju said. Another major concern to the state is that the Delhi-Mumbai industrial corridor and the state of Gujarat are attracting huge investments from within the country and abroad, the FAPCCI said.