The environment created for the state of Andhra Pradesh has made the industrial community sit up and pay attention. If today the industrial giants are looking at this state as a potential investment destination, it is only because of its dynamic chief minister and his industry-friendly policies with swift implementation along with his clean and transparent governance.
All we need is a little help from the Centre before the state reaches its self-propelling growth that no one can stop. With the third-longest coastline of 975 kilometres, a proposed new smart capital, balanced regional development approach, hardworking vibrant educated population and forward-thinking leadership, Andhra Pradesh is raring to go.
By complying with all the 80 reforms (187 reform action points) contained in the Business Reform Action Plan 2019 released by the Department for Promotion of Industry and Internal Trade (DPIIT) and acquiring the first position in the Ease of Doing Business rankings, Andhra Pradesh under the leadership of CM Jagan Mohan Reddy has proved itself as the most-sought-after investment destination in India. The 12 reform areas where the state excelled include access to information and transparency, single-window system, land administration and transfer, land availability and allotment, environment registration enablers, construction permit and labour regulation enablers, obtaining utility permits, paying taxes, inspection enablers, contract enforcement (courts) and sector-specific measures.
Andhra, home to over 300 industrial parks, has a thriving industrial sector that grew by about 5.7% in 2019-20 due to its efforts to ensure actual ease of doing business with a low cost of starting an enterprise and quick single-desk approvals with 99.9% compliance. It was also the first state to announce a `1,100 crore restart package to bail out MSMEs after the impact of the pandemic. The restart package included the payment of all sanctioned but outstanding incentives to MSME units, a waiver of three months fixed demand charges for MSMEs, deferment of power minimum demand charges for three months for large and mega units, working capital loans and preferential market access for MSEs.
This, along with schemes like Dr YSR Navodayam (one-time restructuring of MSME loans), is testimony to the state’s commitment to industrialisation. The YSRCP government also unveiled its Industrial Policy 2020-23 this year, which intends to provide world-class infrastructure, skilled labour and a zero-hassle setup for an industry-friendly environment. Aerospace and defence, food processing, pharmaceuticals, textiles, petrochemicals, electronics, automobiles, toys and furniture, footwear and leather, machinery and precision equipment are the areas identified as thrust sectors under the policy.
With 70.9% of Andhra Pradesh’s population in the working age, the second-highest in India, one of the key objectives of the policy would be to involve as many people in these sectors as possible and develop their skills. This would significantly boost the state’s economy, which is primarily agriculture-based. Further, it promises to provide end-to-end hand-holding of entrepreneurs via its ‘YSR AP One’—a one-stop resource and support centre for industries.
While keeping in mind an equal growth of industrialists from SC and ST communities, the Andhra Pradesh government also launched the ‘Jagananna YSR Badugu Vikasam’ as part of its special industrial policy 2020-23. This includes special incentives of upto `1 crore, compulsory allotment of land in spaces belonging to the Andhra Pradesh Industrial Infrastructure Corporation, waiver of stamp duty and concession in power charges, among others, for the SC and ST community industrialists.
Additionally, the state government has also decided to conduct Samagra Parishrama Survey 2020 (comprehensive industrial survey) to capture industry requirements in order to understand the need for skilled, semi-skilled and unskilled labour across various sectors. The primary objective of the survey would be to identify gaps in the supply chain of the industrial units and bridge them by providing skilling and reskilling programmes as per National Skills Qualification Framework (NSQF) standards.
The above efforts and rankings provide a holistic picture of the preparedness of Andhra in becoming a major industrial centre of India. The YSRCP’s efforts tell a story that the state government has been successful in providing an attractive regulatory environment for industries to flourish in the state. What is now left is the much-required assistance from the Central government by giving the Special Category Status (SCS) to the state. Andhra Pradesh has been reeling under dual pressure.
The significant loss of revenue due to its bifurcation in 2014 leading to the loss of the capital Hyderabad and the negative impact of the pandemic on the economy of the state have pushed the financial position of Andhra to a precipice. Thus, the demand for special category status for Andhra Pradesh becomes more pronounced in this time. To name a few benefits the SCS would accord to Andhra—it would get special Central assistance grants, assistance for externally aided projects being given as 90% grants (as opposed to loans, for others), excise duty concessions and tax breaks to attract industry to its territory.
This precisely is the need of the hour for AP, which has proved itself in all reform action points listed by the Centre. A state that has worked tirelessly to achieve the same must be rewarded by helping it attract industries via special category status. Besides, unlike the restrictions that were faced during the 14th Finance Commission, the 15th Finance Commission has given a free pass to the Central government to grant SCS to any state.
The Finance Commission in its report has stated: “Some states have requested special category status. This does not constitute part of the mandate of the 15th Finance Commission and remains entirely in the domain of the Union government, which can take an appropriate decision.” Thus, this helps the case of granting a SCS to Andhra Pradesh that, with its continuous efforts, would help India reach its pinnacle in industrial growth.
Vijayasai Reddy V (venumbaka.vr@sansad.nic.in)
MP, YSRCP Parliamentary Party Leader and National General Secretary