Investors’ summit in Vizag for industrial growth: Hype or reality?

Industrial growth in newly formed Andhra Pradesh has met with setbacks such as availability of land, environmental concerns and a skewed industrial policy.
Investors’ summit in Vizag for industrial growth: Hype or reality?
Investors’ summit in Vizag for industrial growth: Hype or reality?
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Visakhapatnam, the City of Destiny, is getting spruced up for a partnership summit to showcase the potential for industrial growth in the successor state of Andhra Pradesh. The summit, scheduled from February 24 to 26, is the third annual event in the series organised during the TDP government and held at the same place since 2016.

AP Chief Minister N Chandrababu Naidu, who came to power in 2014 after 10 years of political hibernation, is obligated to rebuild his truncated state as sunrise Andhra Pradesh. He promised to provide one job in each household by ushering in industrial growth. His son and IT Minister Nara Lokesh has promised 6 lakh jobs in Information Technology and Electronics sectors in the next two years.

Challenges for Naidu’s growth story

If Naidu’s double-digit growth story has to become a reality, the industry’s share in the gross state domestic product (GSDP) will have to register an impressive performance. The manufacturing sector with 21% of the GSDP ranked third after the primary and service sectors in the state economy, as per trends available from the half-yearly review. The service sector accounts for 48% of the GSDP. Naidu, left depending heavily on the service sector in scripting his growth story, gave impetus to the development of beach, religious and river tourisms. The state’s long coastline will obviously be an advantage for him.

The growth momentum is unlikely to sustain without the shifting of the investors of Andhra origin from Hyderabad. But drawing them back to their native soil is no easy task. According to a source from The Federation of Telangana and Andhra Pradesh Chambers of Commerce and Industry, 99% of industry promoters in Hyderabad are from the residuary AP state. Creating an eco-system in their favour, characterised by the availability of skilled manpower, incubation centres and industrial peace, is the biggest challenge staring Naidu in the face.

Naidu feels handicapped without the special category status tag for his state, as promised by the Centre at the time of bifurcation. The special package offered by the Modi government as a substitute for the special category status too has failed to come to Naidu’s rescue. The special category status will come with certain concessions in taxes, I-T benefits for a period of 10 years and the other industrial incentives.

What did earlier summits achieve?

Is Naidu’s talk of industrial growth mere hype or a reality? The TDP government hosted partnership summits in 2016 and 2017 in Visakhapatnam with a focus on food processing, textiles, electronics, hardware, automobiles, aerospace, defence and tourism.

Memoranda of understanding (MoUs) were committed for establishing 328 projects worth Rs 4.68 lakh crore during the first summit. The projects, if realised, would create 9.59 lakh jobs. In the second summit, the government received commitments for creating 3.58 lakh jobs through 115 projects worth Rs 1.90 lakh crore, asserts the AP Economic Survey Report-2016-17.

Have they all been realised? The government says the MoUs are in various stages of progress. But opposition parties say it is all only rhetoric, devoid of action.

Growth imbalance

The drive for industrial growth has met with hiccups such as availability of land; environmental concerns triggering violent resistance from locals as was the case in an aqua food park in AP’s west Godavari district and in the Gangavaram port; skewed industrial policy which is heavily tilted against the backward regions.

MA Gaffoor, general secretary of the Centre of Indian Trade Unions (CITU), blamed the government’s talk of development around Amaravati for the unhealthy growth. Land problems will not arise if the backward Rayalaseema and Uttarandhra regions, endowed with plenty of low cost barren lands, are chosen for the location of industries, he claimed.

Konathala Ramakrishna, former MP and leader of Uttarandhra Abhivrudhi Vedika, at an interaction with Jana Sena Party (JSP) leader Pawan Kalyan called for a holistic approach to address regional imbalances by setting up a railway zone in Visakhapatnam and a steel plant in Kadapa in line with the Centre’s commitment.

The CM sees great potential in port-led development along the 974-km stretch of the state’s coastline. But the government’s move for the modernisation and development of ports in Machilipatnam, Bhavanapadu, Gangavaram port and other places triggered massive resistance from fishermen and landowners who stood to lose their land.

The Naidu government is accused of rolling out the red carpet for overseas investors while failing to address industrial sickness. A number of jute and textiles industries were subjected to layoffs in the recent past. Gaffoor says over 1 lakh workers have lost their jobs in the jute industry alone.

Save PSUs campaign

Hundreds of workers are losing jobs in public sector companies in and around Visakhapatnam as a result of the government’s disinvestment and privatisation plans. The railway zone, intended to create employment in backward regions, is also failing to come up, fumes Gangaram, who is heading the save PSUs campaign.

The partnership summit is likely to feel the heat of unrest in industrial workers triggered by the government’s moves for disinvestment in and privatisation of public sector units such as the Visakhapatnam Steel Plant and the Dredging Corporation of India (DCI). JSP leader and actor Pawan Kalyan extended support to DCI workers striking against the privatisation plans of their profit-making firm. It is also proposed to give away the ore handling complex of the Visakhapatnam Port Trust to a private company for a throwaway price.

Hindustan Zinc Corporation, which had 800 workers, remains closed since 2013 following plans to sell off the Central government’s stake. It owns 350 acres of prime land in the heart of Visakhapatnam city.

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