Hyderabad: Chief Minister Chandrababu Naidu has unveiled six policies to accelerate industrial growth in Andhra Pradesh, in a bid to fulfil his poll promises of creating wealth to uplift the financially weaker sections and provide 20 lakh jobs to skilled youth.
The policies involve industrial development, integrated clean energy, MSME (micro, small and medium enterprises) and entrepreneur development, food processing, electronics manufacturing, and private industrial parks. Through these, the Naidu government envisages about 20 lakh jobs while aiming to attract over Rs 40-lakh crore investment in five years from 2024 to 2029.
The Andhra Pradesh cabinet approved the policies in one go at Amaravati Wednesday. The policies, Naidu later said, are game-changing for AP, adding that his administration will plough ahead with the ‘Think Globally-Act Globally’ slogan to create wealth and more opportunities for people, especially the youth.
Naidu said that during his previous tenure as the first CM of the truncated state from 2014 to 2019, Andhra Pradesh saw a significant transformation in its industrial landscape, driven by progressive industrial and sectoral policies, which attracted major industries such as Kia Motors.
“However, in the past five years, there has been a noticeable shift in focus away from economic growth, leading many industries to shift to other states. Today, we are committed to reigniting the momentum by offering an enabling ecosystem and competitive incentives to attract back industries to the state,” he said.
The CM further said that he expected coastal Andhra to become a global aqua-hub and Rayalaseema “the fruit basket”.
“Once (the under construction) Bhogapuram airport comes into use, Visakhapatnam will become the knowledge economy address,” he said.
“We have achieved ease of doing business. Now, the focus is on the speed of doing business. We will give single-desk approvals and provide resolutions. One application to the AP Economic Development Board is enough,” Naidu added, speaking to reporters later. “IAS officers will be assigned as escort officers to foreign investors, for the latter to set shop here without any hassle.”
Officials said AP’s new industrial policies are now among the most attractive in the country. The AP Industrial Development Policy (AP IDP 4.0)—the anchor policy for all large and mega investments—alone targets an investment figure of Rs 30 lakh crore in the manufacturing sector, while aiming to operationalise investments of Rs five lakh crore during the policy period, according to an industrial department note.
Targeting foreign direct investment (FDI) of Rs 83,000 crore (USD 10 billion), the AP IDP 4.0 wants exports from the state to double to Rs 33,200 crore and aims to create five lakh jobs in the manufacturing sectors.
The AP IDP 4.0 categorises companies into four types—sub-large investing Rs 50-500 crore, large Rs 501-1,000 crore, mega Rs 1,001-5,000 crore, and ultra mega investing above Rs 5,001 crore.
The government is proposing a capital subsidy of 30 percent of the fixed capital investment (FCI) as an incentive for early bird projects. Companies that promise higher employment will get up to 10 percent higher incentives.
In a first in the country, companies that reduce carbon footprint through pollution or waste minimisation and power, water efficiency initiatives will get an additional de-carbonisation subsidy of up to six percent of the FCI, N. Yuvaraj, secretary of industries, told ThePrint.
Officials said the incentive structure has been kept simple, without linkages to market risks.
Moreover, the policy attempts to create a favourable business ecosystem by, for instance, inviting private participation in the development and operation of industrial parks. It also has provisions for industrial housing development within a 5 km radius of parks. It even encourages industries to adopt Industrial Training Institutes (ITIs) for captive training and recruiting skilled talent.
The policy includes provisions for rationalising tariffs for water, power, and layout approvals, among others, to reduce production costs. It has initiatives for consolidating land parcels along the Government of India-approved industrial nodes for cluster-specific park development. It also provides for continuous engagement at regular intervals with industries to understand the ground issues and an integrated digital platform for tracking, tracing and monitoring issues for early resolution.
‘One Family, One Entrepreneur by 2030’
The MSME and Entrepreneur Development Policy (AP MEDP 4.0) aims to create an entrepreneur in every family in Andhra Pradesh by 2030.
The policy proposes a Ratan Tata Innovation Hub for entrepreneur development. Its headquarters will be at Amaravati, and five zonal centres will cover all regions in the state.
Led by major industry groups, the centres will focus on mentorship, financial support, knowledge transmission, and legal aid for entrepreneurs and facilitate venture capital tie-ups. There will also be efforts towards their integration with universities.
The incentive structure is straightforward to ensure MSMEs can claim benefits easily. First-generation entrepreneurs will get priority. Enterprises wholly owned and operated by backward classes, SC/ST, women, or specially-abled entrepreneurs will get a 10 percent higher capital subsidy to ensure inclusivity.
Moreover, the policy proposes a dedicated corpus of Rs 500 crore for credit access, the revival of sick units, technology transfer, and the promotion of specific products, such as coir.
The AP Food Processing Policy 4.0 targets investments of Rs 30,000 crore in the manufacturing sector, creation of three lakh jobs, and exports amounting to USD 15 billion.
Moreover, the policy proposes notification of three tribal districts in AP as organic zones and commodity boards for mango, banana & cashew crops.
AP Electronics Manufacturing Policy 4.0 targets investments of Rs 84,000 crore from all electronic categories, the creation of five lakh jobs, and a production value of Rs 4.2 lakh crore.
A 100 percent reimbursement of net SGST (state goods and services tax) for five years, a power subsidy of Rs one per unit for five years, and a 100 percent reimbursement on stamp duty charges are among the proposed operational incentives. The policy also includes recruitment assistance of Rs 4,000/month for a first-time male employee and Rs 6,000/month for a first-time female employee for six months after a year of operations.
The sub-sector focus of the policy is on manufacturing IoT (Internet of Things) devices across sectors, including health and medicine, logistics, agriculture, and surveillance.
The AP industries department formulated the above policies, whereas the AP energy department formulated the Integrated Clean Energy Policy (AP ICE 4.0). The policy is to attract Rs 10 lakh crore investments and create 7.5 lakh employment opportunities.
The incentives for wind, solar and hybrid projects include government and private land offered on a lease basis — at Rs 31,000/acre/year and exemption from NALA charges for land conversion.
“Incentives for renewable energy manufacturing projects include capital subsidy of 25 percent on FCI of plant, captive generating plant and captive mines, 100 percent reimbursement of net SGST on sale of products, 25 percent exemption of industrial water charges for 10 years, and power subsidy of Rs one/unit for 10 years,” K. Vijayanand, special chief secretary of energy, told ThePrint.
The policy also proposes a green energy and circular economy university under the public-private partnership mode.
AP officials said the policies are an output of comprehensive consultations with industry veterans and benchmark studies and align with the election manifesto promises of the Telugu Desam Party-combine.
“All the policies are designed to be forward-looking, aiming to boost industrial growth by focusing on job creation, fostering entrepreneurship, addressing climate change, and ultimately generating wealth for the state,” said a senior official.
(Edited by Madhurita Goswami)