Industrial Policy | APPSC State Specific Preparation Course - APPSC (Andhra Pradesh) PDF Download

Industrial Policy of Andhra Pradesh Government

• Andhra Pradesh Industrial Development Policy, 2015-20 aims to create modern infrastructure, boost manufacturing, promote inclusivity, encourage innovation, and generate employment opportunities.
• The government aims to make Andhra Pradesh the top choice for investors by offering a favorable business environment, exceptional infrastructure, strong law enforcement, and harmonious industrial relations.
• The focus is on establishing an ecosystem that fosters innovation and enhances global competitiveness of industries in Andhra Pradesh.
• The Government of Andhra Pradesh emphasizes sustainable industrial growth with a focus on capacity building at the grassroots level.

Labour and Skill Development under the Policy

• Andhra Pradesh State Skill Development Corporation (APSSDC) has been established to mirror the National Skill Development Corporation (NSDC).
• APSSDC will offer funding for scalable vocational training programs, along with support systems like quality assurance and information systems.
• It will identify the demand for skilled manpower, match industry-specific skill requirements, and provide courses at various education levels, including matriculation and above.

Industries Involvement in Skill Development

• Industries will be encouraged to actively participate in shaping the development of a skilled workforce. 
• They will play a key role in designing training programs that are tailored to specific sectors, responsive to industry needs, and driven by market demands. Collaboration between industries and academia will be promoted to facilitate this process.

Fiscal Incentives under Industrial Policy 2015

• Investors establishing industries in Andhra Pradesh will be eligible for incentives provided by the Government of India. The state government acknowledges the importance of sector-specific fiscal benefits to enhance the competitiveness of local businesses. Various financial incentives are available, including reimbursement of stamp duty and transfer duty for industrial land purchases.
• For large industry units, a partial reimbursement of net VAT/CST or SGST will be granted for up to 7 years from the start of commercial production or until 100% of fixed capital investment is realized, whichever comes first.
• MSME sectors will receive full reimbursement of stamp duty and transfer duty for land purchases designated for industrial use.

Export Promotion

• The policy also focuses on promoting exports to boost the economic growth of the region.
• Exportation significantly contributes to the industrial and economic growth of a region.
• With the global market trends favoring exports, long-term opportunities have emerged, creating avenues for export development.
• States must actively cultivate export markets to capitalize on these opportunities.
• Andhra Pradesh Government is incentivizing Export-oriented units to enhance exports.
• Export Industries are eligible for a 30% grant on ground rent for participating in international trade fairs, with a maximum limit of 9 sq mts.
• Export Awards will be granted to EOUs that excel in quality, research and development, and overall performance.

Access to Market

• Assistance in the form of grants is offered to Small Scale Industries for ground rent at National Exhibitions and trade fairs, capped at 9 sq mts.
• The government aids Small Scale Industries in recovering dues for goods or services sold, including interest under the Delayed Payment Act.
• Vendor Development programs and buyer-seller meets create platforms for transactions, aiding Small Scale Industries in finding market opportunities.

Andhra Pradesh Innovation & Start-up Policy

• Andhra Pradesh has a dedicated policy to foster innovation and support startups within the state.
• It aims to create an environment conducive to entrepreneurial growth and technological advancements.
• The policy includes initiatives to facilitate the establishment and growth of startups through various support mechanisms.
• The State of Andhra Pradesh envisions a future where new software products drive growth, employment, and social change.
• The Innovation and Start-up Policy aims to nurture entrepreneurship, targeting specific goals by June 30, 2019:
  • Establish 100 Incubators / Accelerators
  • Incubate 5,000 Companies & Start Ups
  • Develop 1 million sq ft of Incubation Space
  • Mobilize Rs 1000 Cr of Venture Capital for Innovation
  • Promote an Innovation Culture
  • Create a billion-dollar technology start-up locally

Industrial Corridors

• The approval of the Andhra Pradesh Industrial Corridor Development Bill in 2017 by the Assembly will facilitate the Department of Industries (DoI) in accelerating the conversion of six nodes (Visakhapatnam, Kakinada, Krishnapatnam, Hindupur, Srikalahasti-Yerpedu, and Gannavaram-Kankipadu) into industrial centers.
• With the enactment of the Bill, the groundwork has been laid for the rapid advancement of the three corridors, which play a pivotal role in realizing the government's ambitious growth objectives in terms of their contribution to the Gross State Domestic Product (GSDP).

Visakhapatnam-Chennai Industrial Corridor (VCIC)

• Description: The Visakhapatnam-Chennai Industrial Corridor (VCIC), also known as Vizag-Chennai Industrial Corridor, forms a crucial part of India's East Coast Economic Corridor (ECEC), the nation's primary coastal corridor.
• Significance: Aligned with the Golden Quadrilateral, the approximately 800-kilometer corridor is set to play a vital role in advancing India's Act East Policy and Make in India initiative.
• Connection: This corridor establishes a link between India and the Association of Southeast Asian Nations (ASEAN) and East Asian economies, pivotal players in the global manufacturing economy.
• Geographical Scope: The VCIC spans across nine districts in the state of Andhra Pradesh.
• Objectives: VCIC aims to support the Government of Andhra Pradesh (GoAP) in boosting industrial growth and generating high-quality employment opportunities.

Government Initiatives and Partnerships

• Strategic Development: The Government of India (GOI) is focused on building industrial corridors of global standards to expand the manufacturing and services sectors while creating modern urban hubs linked by advanced infrastructure.
• Role of Asian Development Bank (ADB): ADB has been chosen by the GOI as the primary partner for developing the ECEC, stretching from Kolkata to Kanyakumari. ADB has played a crucial role in shaping the VCIC by identifying the necessary infrastructure and institutional investments for fostering manufacturing-driven growth.

Special Investment Regions (SIRs)

• SIRs are designated areas with top-notch infrastructure designed to attract investments and foster the growth of Micro, Small, and Medium Enterprises (MSMEs).
• A specific policy is planned to boost MSMEs, which are crucial for the state's industrialization.
• The State Government aims to encourage investments in social and urban infrastructure to support sustainable industrial development.
• The Government of Andhra Pradesh (GoAP) will provide state-of-the-art industrial facilities in identified regions, benchmarked against global standards.

National Investment and Manufacturing Zones (NIMZs)

• The Government of India has given preliminary approval for establishing two NIMZs in Andhra Pradesh - one in Yerpedu, Chittoor district, and the other in Kanigiri, Prakasam District.
• These NIMZs are envisioned as cutting-edge industrial cities, each spanning a minimum of 5,000 hectares, serving as focal points for industrial growth and job creation.
• Land parcels in Yerpedu, Chittoor District, and Kanigiri, Prakasam District have been earmarked for NIMZ development.
• The investment for each NIMZ amounts to Rs. 30,000 crore, with the potential to generate direct employment for around 600,000 individuals.

Bottlenecks for Industrial Development in Andhra Pradesh

Industrial progress in Andhra Pradesh faces several challenges. The region, particularly the highly industrialized Hyderabad and its surroundings, has been significantly impacted by the ongoing Telangana movement. This, coupled with issues such as land scarcity and power shortages, has created a complex set of obstacles.

Power Shortage

• The lack of adequate power supply stands out as the most significant barrier to industrial growth. 
• Reports from the Federation of Andhra Pradesh Chambers of Commerce and Industry (FAPCCI) indicate that industries face power cuts amounting to 70% on a weekly basis, including a three-day power holiday. Moreover, recent tariff hikes further burden industrial operations.

Land Availability

• Given the agricultural nature of the state, suitable land for industrial expansion is limited in many districts, except for Srikakulam, Vizianagaram, and Visakhapatnam along the north coast. 
• Environmental concerns in these areas have stalled various projects, especially those related to power and minerals.