VIJAYAWADA: AP Chambers of Commerce & Industry Federation requested the government to announce a dedicated escrow account mechanism for industrial incentives (as promised by Chief Minister Nara Chandrababu Naidu during the recent global summit), ensuring timely and predictable release of approved incentives.
This will go a long way in restoring industry confidence and easing the cash-flow pressures faced by MSMEs.
In this context, we also seek adequate budgetary allocation for pending and future industrial incentives, in line with policy commitments, the Chamber mentioned in the formal letter submitted to Finance Minister Payyavula Keshav, ahead of the State Budget 2026-27.
AP Chambers further requested the introduction of a one-time VAT dispute resolution scheme to unlock blocked capital (estimated as `5000 crore), reduce long-pending litigation, and significantly improve ease of doing business. The scheme will also help the government to mobilise huge revenue.
Seeking to government to expedite the completion and operationalisation of 175 MSME parks planned to set up in each Assembly Constituency with common infra and also plug-and-play infrastructure in some parks, the Chambers wanted to focus on node-level development within industrial corridors, so that policy announcements translate into tangible industrial activity across regions.
The Chambers submitted that rationalisation of the Professional Tax framework would substantially reduce the taxes and also compliance burden on MSMEs, which form the backbone of employment and economic activity in the State.
“At present, property tax assessment in urban local bodies (ULBs) is limited to only two categories-Residential and Commercial-with no separate classification for industrial units. As a result, industries are being assessed under the commercial category, leading to disproportionate and abnormal tax increases. Given the distinct functional and statutory requirements of industrial units, including mandatory safety, environmental, and operational norms, we request the Government to consider introducing a separate ‘Industrial’ property tax classification with a rational and transparent assessment mechanism, to ensure fairness, predictability, and support for industrial and MSME growth,” the Chambers mentioned in the letter.
It requested the Government to rationalise fuel taxes and bring down diesel prices to ensure AP remains competitive with neighbouring states and to reduce cost pressures on industry and MSMEs.