Andhra Pradesh on Monday unveiled a new Industrial policy 2020-23, with much focus on Micro, Small and Medium (MSM)-scale industries, providing pre-approved land parcels for big investors at industrial parks. It has also identified 10 sectors including food processing, textiles, Pharma and biotechnology, Aerospace, among others as ‘thrust sectors’, for which the government will extensively reach out to investors.
A key feature of the new policy is the development of a separate industrial zoning and safety policy. The idea is to provide a risk-free investment-friendly environment for industries with minimal effect of environment. Plans were afoot to develop a new industrial policy after a spate of industrial accidents in Andhra Pradesh since May this year.
In terms of infrastructure development, the new policy plans to develop a plug and play infrastructure facilities for MSME players at affordable rates. It also aims to make available pre-approved land parcels in industrial parks and develop clusters, mega industrial parks and specific industrial parks as per local needs.
The state hopes to ensure faster turnaround time for investment proposals and to this effect has set up a central helpline desk and facilitated district-level intervention by Collectors for faster approvals. Regular meetings with bankers have also been proposed to improve access to credit.
The policy also proposes to replace the existing lease and buy options in the Andhra Pradesh Industrial Infrastructure Corporation (APIIC) land policy with a lease + buy model, where companies can pay a smaller amount upfront and will have the option to buy land after they complete 10 years of operations
Skill development
The state has also proposed 30 skill development centres and 2 skill development universities. A digital platform is also under development to help companies find skilled labour matching their requirement. Employment opportunities for the youth in the state is stated as one of the key objectives of the new industrial policy.
This comes after the state government, in November 2019, made it mandatory for existing and upcoming industries in the state to reserve 75% of jobs for locals through the passage of a new law called the Andhra Pradesh Employment of Local candidates in the Industries/Factories Bill, 2019.
MSMEs
The new policy proposes financial incentives for Micro and Small industries providing a 100% reimbursement of stamp duty and State Goods and Service Tax for five years. A power reimbursement of Rs 1 per unit for 5 years is also being made available to the sector. The state is also willing to reimburse 25% of land conversion charges Rs 10 lakh for aspiring entrepreneurs in this sector. A 15 % investment subsidy for up to Rs 20 lakh along with a 3% interest subsidy for 5 years is also part of the policy.
For Medium, large and Megaprojects, the state has linked SGST to the number of jobs provided the company to the local youth. For those employing 1000 persons, a 50% SGST can be reimbursed, 75% reimbursement for that provisioning employment between 1000 to 2000 persons and a 100 % reimbursement for those providing employment above 2000 persons.
The state has also taken an effort to include policy initiatives to boost women entrepreneurs from scheduled caste, tribe backward caste and minority communities, by reimbursing 100% stamp duty. A 50% land rebate on land cost for up to Rs 20 lakh, a 25 % land conversion rate is being provided to facilitate more women entrepreneurs. Further, SGST reimbursement, a power reimbursement of Rs 1.25 per unit and subsidy of 3% on bank interest are also being offered for 5 years.
Apart from this, the state has also come up with tailor-made incentives for Megaprojects that promise to generate more than 2,000 jobs.
The state has also launched YSR AP One a series of Cells set up to facilitate an end-to-end business support, market research assistance for companies, marketing, branding, sales support, revitalisation, investor outreach and scheme support.
Speaking to the media the Minister of Industries and Commerce for Andhra Pradesh, Mekapati Goutham Reddy said the new policy is environment friendly,, “The Chief Minister has insisted on an all-round holistic policy with empowerment being the crucial factor. The CM wanted a dynamic policy rather than a stagnant one. The idea is to be more adaptable in the post-COVID-19 era where the predictability is uncertain, the focus is to adapt as we go along,”