Interview: Andhra Minister speaks on investments, industry in the state, and more

Andhra Pradesh is said to have drawn investments worth Rs 13.41 lakh crores through 378 Memorandums of Understanding (MoU) that were signed in March at the Global Investors Summit (GIS) at Visakhapatnam organised by the YS Jagan Mohan Reddy led state government. 

The GIS at Visakhapatnam was also an important image boost for the ruling YSR Congress Party (YSRCP) government in Andhra Pradesh which is often charged by the main opposition Telugu Desam Party (TDP) of scuttling the development of Amaravati as a state capital and economic hub. TDP supremo and former chief minister N Chandrababu Naidu had envisaged it to be the state’s new capital after its bifurcation in 2014. However, the YSRCP government is firm on its plan to have three capitals — Amaravati as a legislative capital, Visakhapatnam as the executive capital and Kurnool as the judicial capital. The government also wants to develop Visakhapatnam as an investment hub. 

In an interview with TNM, Andhra Pradesh Industries Minister Gudivada Amarnath explained how the state government plans to bring in investments and set up new industries at a time when it is still shifting capitals.   

Which all sectors do the projects coming to Andhra Pradesh fall under?

The projects are being generated in the areas of hydrogen storage, greenfield airports, and three major sea ports along the coastline. Apart from this, we will also be building a bulk drug park in Kakinada.

What kind of support is the government providing the investors ?

We have created a single portal for approval of all the requirements including electricity, water, land, incentives, labour, building permission, and more, making it easier not just for large companies, but also for Micro, Small and Medium Enterprises (MSME) and start-ups to invest. We have enhanced the facilitation process to ensure transparency.

The Andhra Land Reforms Act has been amended to improve ease of land procurement. We have created a single window agency that will help in time-bound reverse handling and also to regularly consult with the industry for their requirements. 

How many MOUs have been signed at the GIS, and how many have been realised so far? What challenges has the government identified in turning the MoUs into reality?

At the investment summit held in March this year, we garnered investments totalling Rs 13,12,120 crore, with an employment potential of 6,05,733 persons. As of today, we have been able to realise an investment of Rs 3,38,706 crore and are in the process of creating employment of 2,27,609 persons. Already, 12 companies have gone into production, while four are under trial production, 13 have already erected machinery, and 20 have started civil works.

A major challenge that we see is the financial closure [company meets the financial requirements for setting up investment] of the MoUs. From the government’s side, we are ensuring that the land required is allotted to them on a priority basis via the green channel. We are also letting them know that financial closure is the most important part to start operations. From previous experience, we know that companies that have not done financial closure face a lot of hurdles at later stages.

Vizag is going to become an Information Technology (IT) hub, and environmentalists are saying that natural resources will be depleted. Already, pharma industries have occupied a lot of space. Environmentalists say there is no space and local residents are worried about concerns like traffic, fire safety, and pollution.

If you look at Visakhapatnam, it is the only place in India where you can mix work with leisure. With this work-with-leisure concept, we are inviting companies mostly in backend operations to start operations. Since backend and/or Business Process Outsourcing (BPO) companies work 24x7, they need an environment where the employee can feel at home and also can have a good leisure time. Visakhapatnam, one of the best beach cities in India, is the location for companies scouting for this kind of location.

As far as pollution is concerned, BPO and/or backend operation companies don’t utilise much natural resources. They just need an ecosystem where they can get a quality lifestyle and affordable living.

What is the government planning to do to attract investments in Visakhapatnam to turn it into an IT hub that can challenge Hyderabad and Bangalore? 

I see a very healthy competition between Visakhapatnam, Hyderabad, and Bangalore. All three cities have their own advantages and disadvantages. Visakhapatnam, being the youngest of all, would like to take the best practices from both cities and complement it with better ones. The largest coastline city, Visakhapatnam can certainly boast of a very employer-employee friendly environment as the natural feel-good factor of having a beach adds to its advantage.  

What has happened to all the investment announcements made during the previous government at Amaravati?

We have come to know that only 10% of the MoUs (signed during the earlier regime) have actually landed. Even though big numbers were announced in the media through the mega advertising hype created then, the actual numbers of companies that are grounded [production begun] are very low. MOUs signed in the TDP regime did not go through scrutiny and legal vetting. In the earlier regime, land was allotted as per a pick-and-choose policy, but they could not achieve the financial closure, due to which the projects could not be implemented. 

The Andhra Pradesh government claims energy projects will bring in investment of Rs 8.8 lakh crore. This is the highest investment in the state. There is criticism that investment in other sectors are very nominal in number. 

Investments in the energy sector are considered to be the blue-eyed sector in present India and Andhra Pradesh is able to attract investments in that sector. It speaks about the investment friendly environment, incentives being planned, and the business climate that is prevailing in the state. Andhra Pradesh is ranked number two in investments in the energy sector and very soon, we want to become number one.

What are the strategies to expedite the work?

Strategies to expedite the work are identifying large land tracts, and clearing all the legal hurdles before being allotted to any sector. This not only saves a lot of time for companies to start their actual work, but also helps the government get revenue from day one. 

By when will the major projects begin? Is there a timeline that the government has in mind?

We are hoping that by the end of March 2024, major energy projects in Andhra Pradesh will be implemented and the revenue generation will start.

How much employment do you think these projects will generate? How many skilled and unskilled labourers will be involved?

A good number of skilled labour has been identified to meet the demand of energy projects in Andhra Pradesh. Apart from this, we are imparting training via AP Skill Development to meet industry demands.

Is the government satisfied with the investments now or are there plans to attract bigger players?

As of now, our focus is to get all the MoUs grounded at the earliest and make sure that they are comfortable here.

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