A bid to attract investors : Valley Vision

Andhra Pradesh Chief Minister N. Chandrababu Naidu.
| Photo Credit: K.V.S. Giri

The Andhra Pradesh government has set an ambitious target of attracting investments amounting to ₹30 lakh crore. Of this, ₹5 lakh crore is to be ‘operationalised’ during the Industrial Development Policy-4.0 (2024-2029).

One aspect that stands out in the Policy is the Speed of Doing Business (SoDB), which Chief Minister N. Chandrababu Naidu has often spoken about during his interactions with entrepreneurs and at other fora. SoDB is defined as the “integration of institutions, processes, systems and infrastructure to enable faster turnaround times”. It suggests the government’s urgency in not just rolling out the red carpet for entrepreneurs, but also enabling them to establish their units in the shortest possible time in the State. Andhra Pradesh has been consistently ranked first in the Ease of Doing Business (EoDB). From ‘ease’, the focus has shifted to ‘speed’ because the government does not want the burden of compliance with procedures to antagonise investors.

Another initiative is to provide subsidies to encourage the decarbonisation of industries in alignment with Sustainable Development Goals.

The SoDB and decarbonisation subsidies are among the five measures showcased as the policy’s selling points.

Micro, Small and Medium Enterprises, electronics, clean energy, food processing, and industrial parks have been mentioned in the Policy as the thrust areas. The government is offering special incentives in the form of subsidies as a percentage of fixed capital investment to large and mega industries who are ‘early bird investors’.

In a development related to the Policy, the State government has recently constituted a joint consultative forum with the Confederation of Indian Industry under the chairmanship of the Minister for Information and Technology and Real-Time Governance, Nara Lokesh, for two years to act as a catalyst for the promotion of the investment climate, industrial growth, skill, entrepreneurship and infrastructure development.

Mr. Lokesh was in the U.S. for a week trying to convince investors that Andhra Pradesh is a promising investment destination. He claimed that he had convinced some big tech companies to expand their operations in what Mr. Naidu had showcased as the ‘Sunrise State’ in his previous stint.

Last month, Tata Consultancy Services (TCS) announced that it would establish a 10,000-seater facility in Visakhapatnam city. During the Telugu Desam Party’s tenure in 2014-19, a mega manufacturing plant came up in the parched Rayalaseema region, the first outside the industrial belts of Visakhapatnam-Anakapalli and Nellore-Tirupati (Sri City). The KIA Motors’ car manufacturing unit came up in Anantapur district in 2017. No multinational corporation or Indian company has since invested in Andhra Pradesh.

The presence of three industrial corridors in Andhra Pradesh — the Visakhapatnam-Chennai; Hyderabad-Bengaluru and Chennai-Bengaluru corridors — give Andhra Pradesh a significant advantage and are bound to attract investments. All of them have just passed the designing stage; infrastructure is still in the works.

Speaking of the manufacturing sector, Sri City is the only place where there are more mega industries compared to the Visakhapatnam-Anakapalli belt. These include at least 25 Japanese companies that constitute a Japanese Industrial Township.

Against this backdrop, the government is scouting for big investments in Rayalaseema where land is cheaper compared to the rest of the State and therefore suitable for industries to make it their destination.

There is also an emphasis on the construction of seaports to realise the State’s untapped potential as a maritime gateway to Southeast Asian countries.

While the government has put in place the required policy framework and restored the Andhra Pradesh Economic Development Board, a conscious effort is being made to capitalise on ‘Brand CBN’, given Mr. Naidu’s image as a ‘CEO’ with a vision. Besides, the ‘double engine government’ — the TDP is an alliance with the BJP, which is the ruling party at the Centre — is expected to help Andhra Pradesh’s efforts to emerge as an industrialised State.

Mr. Naidu has his task cut out as Andhra Pradesh’s image as an investor-friendly State suffered a major dent in the last five years as the YSR Congress Party focused more on welfare. Now, Mr. Naidu will have to balance welfare and development.