AP asks Centre not to extend 'special' incentive package beyond '07

To restrain companies from shifting to other states

Peeved at the companies shifting their units to Uttaranchal and other places which enjoy the special category status, the Andhra Pradesh government has asked the Government of India not to extend the incentive package currently available to those states beyond 2007.

"The present central incentive policy for the special category states will be effective up to 2007. So there is nothing we can do till that time. But our government has impressed upon the Prime Minister, citing the adverse effect of the package on states like us, not to extend it any further," chief minister Y S Rajasekhara Reddy said here today.

Addressing an executive committee meeting of the Federation of Indian Chambers of Commerce and Industry (Ficci), attended by several industrialists, the chief minister said that he was concerned about the effects of the Centre's move on Andhra Pradesh which had already witnessed a lean decade of investments.

Disclosing that investors from abroad, including Sri Lanka, have started looking at Andhra Pradesh due to new opportunities and advantages available here, the chief minister, however, said that he wanted Indian players to make use of these opportunities before others enter the scene.

"Primary and secondary sectors are the topmost on my government's agenda. We will extend the best of all that you need to start your operations in the state. We have already reduced industrial power tariff and provided power subsidy. We will also ensure that power tariff is reduced every year," the chief minister told the meeting.

Highlighting the availability of additional gas from 2007-08 in the Krishna-Godavari Basin, Reddy said that his government wants this gas to be made available at a reasonable rates.

"The Prime Minister has positively responded for constituting a regulatory mechanism to determine the gas prices to ensure fair play," he said.

Replying to a question on the uncertainty of the exact schedule for the commencement of production, the chief minister assured that the additional gas production by both Reliance Industries and ONGC would be available by the end of 2007 or by early 2008. 

He said that companies like ONGC and Reliance would be involved in the proposed Andhra Pradesh gas grid project.

To encourage wind farm sector in the state, the chief minister promised to bring down the quantum of energy required to compensate transmission losses from the existing 28 per cent to a single digit level.

Earlier, Ficci president Onkar S Kanwar presented a study to the chief minister on the potential areas for industrial promotion in Andhra Pradesh.

He suggested Reddy to consider transforming Visakhapatnam Port along the lines of Jebel Ali Free Port of Dubai and launching a cruise from Viskhapatnam to Port Blair.

He also said that flexible labour laws, reduction of indirect tax burden on goods and minimising administrative hassles are required to promote healthy investment environment.