Chief Minister of Andhra Pradesh, N. Chandrababu Naidu. | Photo credit: KVS Giri

The Andhra Pradesh government has set an ambitious target of attracting investments amounting to ₹30 lakh crore. Of this, 5 lakh crore is to be “operationalized” during the Industrial Development Policy-4.0 (2024-2029).

One aspect that stands out in the policy is Speed ​​of Doing Business (SoDB), which Chief Minister N. Chandrababu Naidu has often spoken about during his interactions with entrepreneurs and in other forums. SoDB is defined as “the integration of institutions, processes, systems, and infrastructure to enable faster turnaround times.” This suggests the urgency of the government to not only roll out the red carpet for entrepreneurs but also enable them to establish their units as soon as possible in the state. Andhra Pradesh has consistently been ranked first in terms of Ease of Doing Business (EoDB). From “ease”, the emphasis has shifted to “speed”, as the government does not want the burden of following procedures to upset investors.

Another initiative is to provide subsidies to encourage the decarbonization of industries in line with the Sustainable Development Goals.

The SoDB and decarbonization subsidies are among five measures presented as the policy’s selling points.

Micro, small and medium enterprises, electronics, clean energy, food processing and industrial parks have been mentioned in the policy as areas of focus. The government offers special incentives in the form of percentage subsidies of fixed capital investment to large and mega industries that are “early stage investors”.

In a development related to this policy, the state government recently constituted a joint consultative forum with the Confederation of Indian Industry under the chairmanship of the Minister of Information, Technology and Governance in real time, Nara Lokesh, for a period of two years to act as a catalyst for promoting investment climate, industrial growth, skills, entrepreneurship and infrastructure development.

Mr. Lokesh spent a week in the United States trying to convince investors that Andhra Pradesh is a promising investment destination. He claimed to have convinced some big tech companies to expand their operations in what Mr. Naidu had touted as the “Sunrise State” during his previous term.

Last month, Tata Consultancy Services (TCS) announced the establishment of a 10,000-seat facility in Visakhapatnam city. During the Telugu Desam Party’s tenure in 2014-19, a mega manufacturing plant came up in the arid Rayalaseema region, the first outside the Visakhapatnam-Anakapalli and Nellore-Tirupati (Sri Town) industrial belts. The automobile manufacturing unit of KIA Motors was set up in Anantapur district in 2017. No multinational company or Indian company has since invested in Andhra Pradesh.

The presence of three industrial corridors in Andhra Pradesh: Visakhapatnam-Chennai; The Hyderabad-Bengaluru and Chennai-Bengaluru corridors give Andhra Pradesh a significant advantage and are bound to attract investments. All have just passed the design stage; the infrastructure is still under construction.

Talking about the manufacturing sector, Sri City is the only place where there are more mega-industries than the Visakhapatnam-Anakapalli belt. These include at least 25 Japanese companies that constitute a Japanese industrial commune.

In this context, the government is looking for big investments in Rayalaseema, where land is cheaper than the rest of the state and therefore suitable for industries to make it their destination.

Emphasis is also being placed on building seaports to tap the state’s untapped potential as a maritime gateway to South East Asian countries.

While the government has put in place the required policy framework and restored the Andhra Pradesh Economic Development Board, a conscious effort is being made to capitalize on the ‘CBN brand’, given Mr. Naidu’s image as as a “CEO” with a vision. Moreover, the ‘dual engine government’ – the TDP is an alliance with the ruling BJP at the Center – is expected to help Andhra Pradesh become an industrialized state.

Mr. Naidu has his work cut out for him as Andhra Pradesh’s image as an investor-friendly state has taken a major dent in the last five years with the YSR Congress Party focusing more on aid social. Now, Mr. Naidu will have to balance welfare and development.