Andhra Pradesh proposes special Acts, sops to attract investment

The Andhra Pradesh government has proposed a host of new steps in addition to a liberal monetary incentive regime as part of the upcoming industrial policy.

Through this policy the government seeks to increase the contribution of the manufacturing sector to the GSDP by hundred per cent, achieve a three-fold increase in investments and create employment opportunities for an additional 500,000 people by the end of 2019.

Some of the steps as a part of this grand package include a Special Investment Regions (SIRs) Act that promises operational autonomy besides self-contained physical infrastructure in the proposed SIRs, Single Window Policy Act that guarantees a time-bound and hassle-free clearance mechanism and establishment of a separate society under the name of 'AP Sunrise' to provide hand-holding services to the industries with an investment of over Rs 1,000 crore to set up, run and even exit operations.

For the foreign direct investment (FDI), the state has proposed to create a country-specific helpdesk besides offering hand-holding services and reports on cost of doing business among other things.

"...the bifurcation of Andhra Pradesh has now given the opportunity to establish the residual state as a safe haven for the investors by providing a favourable business climate, excellent infrastructure for trade and investment, law and order maintenance, peaceful industrial relations and healthy socio-economic reforms. In order to facilitate the same, formulation of a new industrial policy becomes imperative," the government said in the preamble of the draft policy document. The industry policy was drafted using a 360-degree feedback approach, it said.

The state government is giving a lot of importance to the special investment regions planned in the proposed Visakhapatnam-Chennai industrial corridor and also in the Chennai-Bangalore industrial corridor as it expects them to become the industrial hubs in the coming years.

It has proposed to create four investment regions in the Visakhapatnam-Chennai industrial corridor project, which is to be funded by the Asian Development Bank (ADB). While Visakhapatnam and Srikalahasti-Yerpedu industrial hubs were proposed under the AP Reorganisation Act, an investment region was proposed at Krishnapatnam in the Chennai-Bangalore industrial corridor by the Centre.

A couple of more special investment regions have been proposed at Nakkapally and Kakinada under the Petroleum, Chemicals and Petrochemical Investment Region.

"A Special Investment Region Act may be passed to catalyse the establishment, operation, regulation and management of special investment regions in Andhra Pradesh. It will also act as an enabler for the development of the SIRs to achieve global standards through world-class infrastructure, investor-friendly policy framework, premium civic amenities and efficient and skilled manpower availability," the government said.

Incentives

The state government has proposed to offer a variety of incentives to industries depending on the size of the investment. This is aimed at reducing the cost of capital for them besides facilitating new entry of new ones and expansion of the existing.

While the present incentive policy is being extended to all the 13 districts of the state, the proposed incentives would be restricted only to those districts that are not covered by the Centre, it said.

The government has also proposed to offer tailor-made incentives to large and mega projects. If the investment in plant and machinery ranges from Rs 250-500 crore, it will be categorised as a large industry. In the case of textiles, food processing and automobiles, this limit has been further reduced to Rs 125-250 crore.

Projects with an investment of at least Rs 500 crore come under the mega category while for food processing, textile and automobiles it will be only Rs 250 crore or an employment of 2,000 persons. The incentives applicable across the board include 100 per cent stamp duty and transfer duty on purchase of land, lease of land, 25 per cent VAT/GST reimbursement for a period of five years, infrastructure at the doorsteps of the units with a 50 per cent contribution in cost from the Industrial Infrastructure Development Fund (IIDF) to a maximum of Rs 25 crore if the investment is Rs 100-500 crore. Besides, they will also get a power subsidy of Re 1 on each unit for a period of three years.

SOPS & STEPS

• 100% stamp duty and transfer duty on land purchase, lease
   
• 25% VAT-GST reimbursement for five years
   
• 50% contribution in cost for a maximum of Rs 25 crore if investment is Rs 100-500 crore
   
• Power subsidy of Rs 1 on each unit for a period of three years
   
• Five-year VAT/GST holiday for micro industries
   
• 50% and 25% GST exemption respectively for small, medium industries
   
• Special Investment Regions Act for operational autonomy
   
• Single Window Policy Act for time-bound, hassle-free clearance
   
• Establishment of 'AP Sunrise' society for industries with an investment of over Rs 1,000 crore to set up, run and even exit operations
  

 

Country-specific helpdesk besides offering hand-holding services to attract FDI