The Government's liberalisation and economic reforms programme aims at rapid and substantial economic growth and integration with the global economy in a harmonised manner.
The Andhra Pradesh Industrial Policy 2005-10 is aimed at promoting industrialisation in the state. Incentives are being given to attract investment in this sector. The policy promises 100 per cent stamp duty and transfer duty reimbursement. Giving in to the long standing demands of the industry with respect to high power cost, the state has decided to reimburse 0.016 cents per unit. Large industries will especially gain as an Industrial Promotion Fund has been set up to cater to their specific problems on a case-to-case basis.
The objectives of the policy are:
- To promote Andhra Pradesh as an attractive destination for industrial investment
- To market Andhra Pradesh as a competitive destination for foreign investment
- To attract and develop appropriate entrepreneurial leadership, management and HRD systems
- To improve infrastructure by facilitating investment in industrial infrastructure in private sector
- To encourage establishment of New Tiny and Small Scale Industries particularly in rural areas to achieve the twin objectives of employment generation and utilisation of local resources
- To encourage cluster concept to make the industries globally competitive
- To develop effective regulatory mechanism for entry and operation of firms
- To create a market driven environment with the private sector being the primary engine of growth Industrial Infrastructure Development Fund of US$ 37.23 million has been created to provide infrastructure to industry.
Development of quality infrastructure for industrial growth through private participation has been given highest priority. In line with this objective, the Government has constituted the Infrastructure Authority (IA) for the rapid development of physical and social infrastructure in the state and to attract private sector participation in the designing, financing, construction, operation and maintenance of infrastructure projects.
The Government has provided all the recognised industrial areas with facilities such as roads, electricity, water, drainage etc. In addition, allied infrastructure such as uninterrupted power supply, telecommunication facilities including Internet connectivity and information kiosks, transportation links from industrial areas to towns have also been provided.
The Government besides creating quality infrastructure, is laying emphasis on creation and maintenance of critical infrastructure required in the industrial estates. Ongoing schemes like Industrial Infrastructure Development Fund (NDF) and Critical Infrastructure Balancing Fund (CIBF) are to be continued.
Special Economic Zone Policy
The Government of India is enacting a Special Economic Zone Act for streamlining the development of SEZs in the country. The State Government would leverage the act for the advantage of SEZs in various parts of the state for balanced trade and commerce with liberal tax, fiscal and administrative regime.
Technology is the key element contributing to productivity, quality, competitiveness and market acceptability of products. In a rapidly changing global scenario, technology and business incubators have emerged as useful instruments for innovation.
To provide technological support to the local industries, the Government of Andhra Pradesh, Confederation of Indian Industry (CM) and Technology Information Forecasting & Assessment Council (TIFAC) jointly promoted Andhra Pradesh Technology Development and Promotion Centre (APTDC) for transfer of technologies, providing technological know-how, commercialisation of technologies, technology upgradation etc.
In line with this objective, APTDC is in the process of developing "T" Incubator - a technology incubation programme which is an innovative system designed to assist entrepreneurs in the development of new technology based firms.
Apart from this, the Indian School of Business "K-hub" was developed to create linkages among the technology providers, academicians, incubators and business development services. This will help promote development of high quality entrepreneurship and pool & share international best practices in incubation/ mentoring processes.
Export plays a major role in the industrial and economic development. In order to boost exports, the State Government is offering a special package of incentives to Export Oriented Units (EOUs).
- Sales tax exemption on purchase of raw materials for EOUs
- Andhra Pradesh State Financial Corporation (APSFC) will extend financial assistance to EOUs at concessional interest rates
- Export industries will be given a 30 per cent grant for ground rent for participation in the international trade fairs, subject to a maximum limit of 9 sq mt
- To sensitise exporters, programmes will be conducted with the assistance of EAN India and SISI on bar-coding
- Export awards will be provided to EOUs to recognise best performing units with respect to quality, R.&D and performance
- A state-of-the-art external information centre to be set up in collaboration with local chambers of commerce and associations and reputed organisations for dissemination of information and assistance to the export fraternity of the state
In order to address the specific problems of existing large industries, the Government may offer a special package of fiscal benefits on a case-to-case basis. Exact fiscal benefits would be decided by State Investment Promotion Board (SIPB) from time to time depending on the nature of the project, investment, location, employment etc. An Industrial Promotion Fund with adequate provision will be created for this purpose. Guidelines and modalities for operating the fund will be decided by the SIPB.
Intellectual Property Rights
Intellectual Property Rights like any other property right, allow the creator or owner of a patent, trademark or copyright to benefit from his own work or investment. To encourage industries for innovation in product development, 50 per cent of the expenditure incurred in obtaining the patent will be reimbursed to enable the industry to protect the invention.
In order to encourage innovation, units having patents for products would be given purchase preference in all purchases made by government departments.
Fostering industry clusters
Clusters allow small local enterprises to make more effective use of underutilised resources (small scale savings or family labour) generating incomes that they cannot otherwise avail of while operating in isolation.
The Government of Andhra Pradesh has identified six industrial clusters for development under "Industrial Infrastructure Up-gradation 30 Scheme". Two clusters, namely, Pharma Cluster near Hyderabad and Auto Components Cluster in Vijayawada have already been approved by the Government of India for assistance and these are in the process of development.
The other four clusters, namely, Marine Food Processing Cluster in Bheemavaram, Powerloom Cluster in Sircilla, Leather Cluster in Hyderabad and Precision Engineering Tools and Components in Ranga Reddy are under consideration by the Government of India. Apart from the above, fourteen more clusters are in the process of development under the assistance of the Development Commissioner Small Scale Industry (DCSSI).
The Government accords highest priority to promotion of clusters in the state. The individual units in the clusters are eligible for the general incentives offered by the Government under the policy. Apart from this, clusters are also eligible for a special package of incentives for which the State Government has created a fund under the cluster development programme.
To capitalise on the natural resources and other advantages available in the sub-regions, the Government has proposed to develop industrial corridors in various parts of the state for sustainable and equitable industrial development.
The state has undertaken wide-ranging measures to nurture its industries: simplified, less restrictive regulations, labour and fiscal reforms, incentives etc. In line with this objective, the state has enacted a law for single-window clearances. It is the first state in the country to have a law for single-window clearances, which ensures that all clearances to investors are given within a specified period. The state has been qualified as "flexible" in its approach to labour regulations and "good" for its simplification of rules and regulations. It introduced the self-certification concept, common annual returns in place of multiple returns with simplified registers and zero inspection regime through accredited agencies.
Information Technology Policy
Special Package for Small and Medium Enterprises (SMEs)
- Power: IT is classified under industrial units for the purpose of levying the industrial power tariff ince
- Rebate on cost of land: IT/ITeS companies establishing their own facilities on clear government land are eligible for a rebate in cost of land calculated at the rate of US$ 487.80 per job created. This rebate in not available on acquired land
- Stamp duty: 100 per cent reimbursement of stamp duty, transfer duty and registration fee has to be paid by IT and telecommunication companies
- Zoning regulations and special stipulations for IT parks on private land and IT campus: IT/ITeS units will be exempt from the zoning regulations and from the payment of conversion fee
- Urban land ceiling (ULC) exemption: Private land owners will be allowed exemption under ULC for development of IT parks with a minimum extent of 25 acres in the periphery of city limits and beyond. They will be allowed exemption under the same with a minimum of 5 acres within city limits subject to payment of prescribed fee
- Training incentive: An incentive of US$ 48.78 per candidate will be provided to training centres, which successfully trained candidates in communication/soft skills and provide employment in reputed IT/ITeS companies
- This package is for IT industry units with a turnover less than US$ 2.43 million and more than US$ 0.24 million per annum
- Power: 25 per cent rebate on power tariff in the first three years of operations and conversion to industrial power tariff
- Reimbursement of 50 per cent exhibition subsidy: For participating in international exhibitions limited to 9 sq. m. of space for the stall rent payable for participation in international events notified by IT&C Department.
- Allotment of land: Government will attempt to reserve land for preferred allotment to SMEs in other locations. Criteria for allotment will be prepared separately.
- IT exporters associations: Government will support associations such as HYSEA, NASSCOM, STPI, IEG or any such organisation (as decided by the committee) in creating libraries for making available materials on trends in technology, market intelligence, research reports and analysis, etc., by contributing US$ 0.024 million per annum for development of the SME sector by making such material available at these libraries
- US$ 0.024 million as recruitment assistance for employing minimum 100 employees in IT and 200 employees in IteS within one year of commencement of commercial operations in Hyderabad and around, upto 50 km
- A special package of incentives will be offered to mega projects. Such projects will be defined as projects creating employment for more than 1,000 persons in the case of IT and 1,500 persons in the case of ITeS. An investment of above US$ 12.195 will be considered as a mega project.
Fields under target
- To take a detailed inventory of the bio-resources in the state
- To encourage R&D
- To develop high-quality infrastructure
- To provide special incentives to biotech industry
- To create an enabling environment and simplify procedures
- To facilitate the flow of venture capital funds and address issues such as intellectual property rights
- Agriculture Biotechnology
- Industrial Biotechnology
- Inputs to the industry (hardware suppliers – instrumentation and chemicals)
- Marine Biotechnology
- Forest and environment-focussed biotechnology
- Contract research in all areas of biotechnology and related areas
- Encouraging R&D
- Infrastructure development
- Sales tax related to land for biotech parks/activities, exemption from power cuts, labour concessions, land and grants for training institutes, land for housing, and mega projects
- Human Resource Development
- Creating an enabling environment
- Funding biotech activities
- Protecting intellectual property rights
Tourism Policy 2006
Incentives and Concessions
- To create a unique selling proposition and a brand image for the state to ensure right positioning and focus of the state on the India and world tourism map
- To create and differentiate tourism products across segments, such as ecotourism, pilgrimage, heritage, business, sports, spiritual, health, leisure and rural tourism
- To provide incentives and concessions to tourism projects to be set up in special tourism areas if they assure sustainable employment generation, promote rural tourism, promote commercially viable projects, etc.
- To develop tourism sector through PPP
- To adopt a single window clearance system
- Concessional allotment of land on long lease of 33 years. For mega projects, lease period exceeding 33 years and lease rent shall be 10 percent of market value and reviewed every five years
- An investment subsidy of 20 per cent of the project cost limited to US$ 0.048 million
- Investment subsidy of 15 per cent of the project cost limited to US$ 0.048 million for upgradation of existing hotels
- 100 per cent reimbursement of stamp duty and transfer fee on purchase of land or lease of land meant for the project
- Reimbursement of 25 per cent of value-added tax paid for a period of five years
- Reimbursement of 25 per cent of luxury tax by new hotels for a period of five years
- Reimbursement of 25 per cent of entertainment tax for multiplexes in theme parks and urban entertainment centres for a period of five years limited to 100 per cent of the project cost for projects more than US$ 1.219 million and located in notified tourism areas or special tourism areas
- Floor area index relaxation
- Automatic conversion/exemption from land use zoning regulations
Mines and Mineral Policy
- The state has improved mineral administration through interaction with the district-level officers and stakeholders
- Thrust is being given on pre-fixed time disposal of mineral concession applications to bring additional areas under mining and resource mobilisation
- Government extends support for grounding of high-tech and innovative value-added mineral projects under single window industrial clearance
- Aim is to serve as a guiding force to translate the mineral potential into reality with the objective of eco-friendly and sustainable mining
- The government, through Andhra Pradesh Mineral Development Corporation Ltd., intends to enter oil and natural gas exploration and coal mining in other states. The government is contemplating levying cess on semi-precious stone areas, seignorage fee on weightment basis for granite and has plans to levy prorated basis royalty on limestone consumed by cement companies
By 2020, Andhra Pradesh will have a modernised and vibrant agroindustry, bringing organised activity into rural regions. Agro industry will create higher incomes, export earnings and employment in rural areas, thus, stemming migration to cities. In addition, the state will have established an unbeatable lead over other Indian states in various agricultural sectors in which it has significant strengths.