ANDHRA PRADESH AUGUST 2015 THE RICE GRANARY OF INDIA. For updated information, please visit

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2 Executive Summary... 3 Re-organisation Act, Advantage State..7 Andhra Pradesh An Introduction.. 8 Infrastructure Status..22 Business Opportunities Doing Business in Andhra Pradesh.. 52 State Acts & Policies... 60

3 EXECUTIVE SUMMARY (1/2) Proposed industrial corridor Vizag among top five ports in India The proposed Visakhapatnam-Chennai industrial corridor is expected to attract an investment of US$ 16.7 billion in years and will create more than 50,000 jobs. The Visakhapatnam port ranks amongst the top five of 13 major ports in the country. By the end of 2015, it is projected to handle 85.0 million tonnes of cargo. In 2015, Visakhapatnam port has announced to construct two new berths worth US$ 103 million. The ports are projected to be ready by Seemandhra, comprising Rayalaseema and coastal Andhra, has most of the power projects of undivided Andhra Pradesh. Coal based power plants are mostly located in the state due to proximity to the ports. FDI investment scattered across state FDI in Andhra Pradesh is scattered across the state both in Coastal Andhra and Rayalaseema. Largest exporter of marine products Andhra Pradesh is one of the largest producers of brackish water shrimps and freshwater prawns. It contributes more than 20 per cent to the country s total marine exports. Power surplus state Source: Andhra Pradesh state portal, Central Electricity Authority, Indian Port Association, DIPP 3

4 EXECUTIVE SUMMARY (2/2) Home to various pharma players Tourist destinations Rich in hydrocarbon and mineral resources Setting up PCPIR and NIMZs Large number of operational SEZs Various pharmaceutical companies have set up their manufacturing hubs in Visakhapatnam and Srikakulam districts. The state provides ample growth opportunities due to availability of ports, pharma city, large parcels of land for expansion etc. The state has a large coast line of nearly 974 kms, temple destinations, lush green forests and spicy cuisine which have led to increase in domestic tourism in the last few years. Ecotourism projects are also being developed after assessing the situation on ground. According to the Director General of Hydrocarbons (DGH), Andhra Pradesh has huge oil and gas reserves; the state is also rich in mineral resources which include manganese, limestone, mica, steatite, copper, graphite, etc. The state is in the process of setting up two National Investment and Manufacturing Zones in Chittoor and Prakasam districts. Moreover, the upcoming PCPIR in the region would boost refining, petrochemicals and chemical industries. Andhra Pradesh has 29 operational SEZs in the state across diversified sectors located mainly across Visakhapatnam, East Godavari and Nellore. Source: Andhra Pradesh state portal PCPIR: Petroleum, Chemicals and Petrochemicals Investment Region 4

5 REORGANISATION ACT, 2014 (1/2) Andhra Pradesh Reorganisation Act, 2014 or the Telangana Act is a parliamentary declaration of the bifurcation of Andhra Pradesh state into two states, Telangana and residuary Andhra Pradesh (Seemandhra). The act consisted of the aspects of division of assets and liabilities, the boundaries of the proposed new states and status of the capital city Hyderabad after the separation of the state. Common capital and Governor Police forces High Court Greater Hyderabad Municipal Corporation area of Hyderabad would be the common capital for the states for a period not more than 10 years. Both states to have a common Governor. Central government to provide assistance to raise additional forces. New training centre for Seemandhra would be established. High Court at Hyderabad would be a common High Court till a separate High Court is established for Seemandhra. The expenditure is to be allocated on the basis of population ratio. Central government to make appropriate grants, provide adequate benefits and incentives in the form of a special development package for Seemandhra. This will ensure expansion of physical and social infrastructure. Special development package 5

6 REORGANISATION ACT, 2014 (2/2) For central government employees, an advisory committee would be appointed to draw up guidelines and take up the allocation exercise. For state government employees, district, zonal and multi-zonal cadres falling in one of the successor states are deemed to be allotted to that state; else employees would be allocated based on options. Services of employees Water resources Energy Two separate boards would be created by the central government for Krishna and Godavari Rivers to look after administration, regulation, maintenance and operation of notified projects. Existing PPAs would continue; units of APGENCO and assets of APTRANSCO would be divided based on location. Central power would be allotted on actual energy consumption trend. The Government of India shall take steps to establish institutions of national importance in the newly formed state. The Government of India shall establish one AIIMS-type super-specialty hospital-cum-teaching institution. Admissions in higher, technical and medical education would be common for ten years. Quotas under article 371-D would also continue. Higher education New capital Central government to provide financial support for creation of a new capital. An expert committee to be constituted by the central government to study various alternatives and make a recommendation within six months. 6

7 ADVANTAGE: Installed power capacity: 10,034 MW Long coastline High economic growth Growing demand April 2015 GSDP expanded at a Compound Annual Growth Rate (CAGR) of 11 per cent between and to US$ 85.8 billion. Per capita income improved at a CAGR of 9.9 per cent between and to US$ 1,493. Andhra Pradesh is a leading agricultural state and plans to bring out a white paper for further Advantage agricultural progress. Adequate power generation capacity Andhra Pradesh Most of the coal-based power plants are located in the coastal regions due to their connectivity to the ports. As gas production from Krishna Godavari Basin (KG basin) picks up, gas based power plants will generate more power leading to the state to become a power surplus state. A 6,000 MW nuclear power plant is to be set up in Srikakulam District. A 974-km long coastline provides numerous opportunities for the state to develop a number of ports. Currently has 14 notified non-major ports and one major port (in Visakhapatnam). The coastline and ports open opportunities for hydrocarbons, developing LNG terminals, setting up of pharmaceutical, aqua and agri corridors. 2020E Installed power capacity: ~20,000 MW Rich in hydrocarbon reserves According to DGH, the state has huge oil and natural gas reserves. The KG basin in the east coast has been categorised as a region with proven commercial productivity of hydrocarbons by DGH. Over 39,000 sq km stretch in Kadapa district has been earmarked by DGH as a potential exploration site for rare natural resources. Source: Andhra Pradesh state portal DGH: Director General of Hydrocarbons, GSDP: Gross State Domestic Product 7

8 FACT FILE Most commonly spoken language is Telugu. Urdu, Hindi, Tamil, Kannada and Oriya are the other languages used. Andhra Pradesh Parameters Capital Source: Maps of India Andhra Pradesh is located in the southern peninsula of India and has a coast line of 974 km. The state of Andhra Pradesh is bound by Chhattisgarh on the north, Odisha on the northeast, Telangana and Karnataka on the west, Tamil Nadu on the south, and the Bay of Bengal on the east. Visakhapatnam, Vijayawada, Tirupati, Rajahmundry, Guntur, Kakinada, Ongole, Nellore and Kurnool are some of the key cities in the state. Hyderabad^ Geographical area (sq km) 160,205 Administrative districts (No) 13 Population density (persons per sq km) 308 Total population (million) 49.5 Male population (million) 24.7 Female population (million) 24.7 Sex ratio (females per 1,000 males) 996 Literacy rate (%) 67.4 Source: Andhra Pradesh state portal ^Share with Telangana for 10 years 8

9 IN FIGURES (1/2) Parameter Andhra Pradesh All states Economy Directorate of Economics & Statistics of Andhra Pradesh, Central Statistics Office GSDP growth rate (%) Directorate of Economics & Statistics of Andhra Pradesh, Central Statistics Office Per capita GSDP (US$) 1,824 1, Directorate of Economics & Statistics of Andhra Pradesh, Central Statistics Office 11,275.29* 272, Central Electricity Authority, as of May 2015 Wireless subscribers (No) 71,578,461** 973,347,094 Telecom Regulatory Authority of India-April 2015 Broadband subscribers (No) 4,810,000*** 100,760,000 Telecom Regulatory Authority of India-April 2015 National Highway length (km) 4,423 92, National Highway Authority of India April-2015 Major and minor ports (No) India Ports Association Airports Authority of India GSDP as a percentage of all states GSDP Source Physical Infrastructure Installed power capacity (MW) Airports (No) ^For undivided state, *As of June 2015, **As of May 2015, ***As of March

10 IN FIGURES (2/2) Andhra Pradesh All states Source Literacy rate (%) Census 2011 Birth rate (per 1,000 population) SRS Bulletin, October Department of Industrial Policy & Promotion, April 2000 to March ,414.2 CMIE ( ) PPP projects (No) 120 1,409 DEA, Ministry of Finance, Government of India SEZs (No) Notified as of March 2015, Ministry of Commerce & Industry, Department of Commerce Parameter Social Indicators Investment FDI equity inflows (US$ billion) Outstanding investments (US$ billion)^ Industrial Infrastructure ^For undivided state, PPP: Public-Private Partnership, SEZ: Special Economic Zone, SRS: Sample Registration System 10

11 ECONOMIC SNAPSHOT GSDP GSDP of Andhra Pradesh at current prices (in US$ billion) Between and , the average annual GSDP growth rate was 11 per cent. CAGR 11% Growth was mainly driven by industrial and services sectors. 52,7 51,4 85,8 70,1 77,3 75,5 77,0 57, , ,1 33, At current prices, Andhra Pradesh s gross state domestic product (GSDP) was US$ 85.8 billion over Source: Directorate of Economics & Statistics of Andhra Pradesh, Central Statistics Office 11

12 ECONOMIC SNAPSHOT NSDP NSDP of Andhra Pradesh at current prices (in US$ billion) CAGR 10.9% Between and , the average annual NSDP growth rate was about 10.9 per cent. 47,4 46,6 76,1 52, , ,1 30,1 68,6 66,7 68,2 63, At current prices, Andhra Pradesh s net state domestic product (NSDP) was estimated at US$ 76.1 billion over Source: Directorate of Economics & Statistics of Andhra Pradesh, Central Statistics Office 12

13 ECONOMIC SNAPSHOT PER CAPITA GSDP GSDP per capita of Andhra Pradesh at current prices (in US$) Average per capita GSDP rose at a CAGR of 10.9 per cent between and CAGR 10.9% Andhra Pradesh s per capita GSDP increased to US$ 1,824 during from US$ over Source: Directorate of Economics & Statistics of Andhra Pradesh, Central Statistics Office 13

14 ECONOMIC SNAPSHOT PER CAPITA NSDP NSDP per capita of Andhra Pradesh at current prices (in US$) Average per capita NSDP increased at a CAGR of 10.7 per cent between and CAGR 10.7% Andhra Pradesh s per capita NSDP grew from US$ during to US$ 1,616 over Source: Directorate of Economics & Statistics of Andhra Pradesh, Central Statistics Office 14

15 ECONOMIC SNAPSHOT PER CAPITA INCOME , CAGR 9.9% Average per capita income increased at a CAGR of 9.9 per cent between and Per capita Income of Andhra Pradesh at current prices (in US$) 579 Andhra Pradesh s per capita income grew from US$ during to US$ 1,493 over Source: Directorate of Economics & Statistics of Andhra Pradesh, Central Statistics Office, Andhra Pradesh state portal 15

16 ECONOMIC SNAPSHOT PERCENTAGE DISTRIBUTION OF GSDP During , the services sector accounted for per cent, followed by agriculture (27.59 per cent) and industry (20.62 per cent). The services sector grew the fastest at a CAGR of 11.8 per cent in , followed by industry (CAGR of 10.5 per cent) and agriculture (CAGR of 10.2 per cent) between and GSDP composition by sector CAGR 48,50% 11.8% 21,60% 10.5% 29,90% 10.2% Agriculture 51,79% 20,62% 27,59% Industry Services Source: Andhra Pradesh state portal 16

17 ECONOMIC SNAPSHOT AGRICULTURAL SCENARIO During , total gross area under crop production in Andhra Pradesh was 16.8 million hectares. Area under production 000 Ha ( ) Crop production 000 tonnes ( ) 2,772 6, ,218* Cereals & millets 3,210 9,363 Sugarcane, cotton, tobacco and groundnut are some of the other major crops produced in the state. Pulses 1, * Total food grains 4,584 11,664* The state has the groundnut rich Rayalseema area, which accounts for nearly 90 per cent of state s production of groundnut. This area also produces most of the sugarcane in the state. Groundnut 1, * Oilseeds 1,974 1,988 Vegetables 159 6,554* During , total production of oilseeds in the state was estimated at 1.5 million tonnes. Fruits 618 9,589* Cotton ,543.0 Fodder crops NA Overall production of cereals and millets during stood at 9.3 million tonnes. Major food grains produced in Andhra Pradesh are rice, maize and pulses. Crop Rice Maize Source: Andhra Pradesh state portal NA Not Available, *

18 ECONOMIC SNAPSHOT IRRIGATION As of May 2014, 48.1 per cent of the irrigation in the state was dependent on canal water, more than 37.6 per cent on ground water and 10.3 per cent on tank water. The undivided state has embarked on water projects in the country called Jalayagnam with an estimated cost of nearly US$ 20 billion. This water management program was introduced in 2009 to bring a larger parcel of land in the undivided Andhra Pradesh under irrigation. Currently, out of the 29 major irrigation projects in Seemandhra, 10 are completed and 14 projects are ongoing. Moreover, of the 63 medium irrigation projects, 50 are completed and 11 are ongoing. The completion of the ongoing projects will further help the state to increase penetration of canal water harvesting and irrigate the large tracts of arid and dry land in the southern part of the state. Jalayagnam project status - May 2014 Numbers Area covered (million acres) Completed Ongoing Contemplated Major irrigation projects Medium irrigation projects Numbers Area covered (million acres) Completed Ongoing Contemplated Source: Andhra Pradesh state portal In January 2015, the Andhra Pradesh cabinet announced to revamp the Jalayagnam programme to ensure completion of projects on time. 18

19 ECONOMIC SNAPSHOT EXPORTS Export of marine products has increased from US$ million in to US$ 1,607.8 million in Andhra Pradesh accounted for nearly 50% of the country s marine exports Exports from the state have increased from US$ 5,529.9 million in to US$ 15,409.9 million in The major exports from the state are drugs, pharmaceuticals and allied chemicals and plastics, agriculture and agro based products, engineering products, minerals and mineral products, handicrafts and carpets, textiles, leather, animal and marine products. Total exports turnover from Vizag Port (million tonnes) Exports from Visakhapatnam Port, one of 13 major ports in India, stood at 25 million tonnes during The port has also emerged as the leading port in marine exports in India. By 2015, the port is expected to handle 85 million tonnes of cargo Source: Port of Visakhapatnam 19

20 ECONOMIC SNAPSHOT EXPORTS Andhra Pradesh exports by commodity (US$ million) Commodity Agri based and forest products 1, , , , , , ,867.3 Leather, animal and marine products ,607.7 Mineral and mineral products , , ,531.9 Handloom and textile ,002.3 Handicrafts and carpets , Drug, pharmaceutical and allied chemical plastics 2, , , , , , ,800.4 Engineering item 1, , , , , , ,488.4 Electronics and electronics parts Software (IT & ITeS) 6, , , , , , ,931 Andhra Pradesh 14, , , , , , ,409.9 Source: Andhra Pradesh State Portal NA: Not Available 20

21 ANNUAL BUDGET State government of Andhra Pradesh proposed a budget of US$ billion for State annual budget (in per cent) State annual budget (in per cent) Commodity Commodity Agriculture & allied services 7.74 Housing 0.79 Rural development Urban development 2.80 Irrigation & flood Control 4.65 Welfare 6.56 Energy 3.86 Labour and employment 0.25 Industry & minerals 0.60 Social security & welfare 1.01 Transport 7.41 General services General economic services 3.02 General education Sports & youth services 0.07 Technical education 0.66 Art & culture 0.04 Medical 5.07 Water supply, sanitation 0.78 Source: State Budget

22 PHYSICAL INFRASTRUCTURE ROADS Road network across the state Recently, the finance minister stated that the master plan for both the projects will be ready soon and development work will start within the proposed timeline. Moreover, the government has also planned to identify important towns and cities in the state and build a network of express highways connecting those important cities. Road length (km) Road type Source: Andhra Pradesh state portal As of , the state was connected via 4,423 km of national highways and 76,896 km of other roads. National highways 4,423 Total roads 76,896 Black top and asphalt 46,839 Concrete/metalled/unmetalled 30,057 The proposed Chennai Visakhapatnam corridor under the Reorganisation Act will aid development of road projects. Source: Andhra Pradesh state portal The proposed Chennai-Bangalore corridor is anticipated to further support development of road projects in the region. 22

23 PHYSICAL INFRASTRUCTURE RAILWAYS & METRO RAIL The state is well connected through the rail network. Visakhapatnam, the largest city in the state, has rail accessibility to nine district headquarters out of 13 in the new state. The city is also well connected to the neighbouring states of Odisha and Chhattisgarh. The state is also planning to form a separate railway zone, namely South Coast Railway, with Vizag as its headquarter. The Union Government has also planned to develop metro rail projects at three locations in the state, including Visakhapatnam, Guntur and Vijayawada. The Visakhapatnam project, estimated to cost US$ million, will develop four important routes that are not well connected currently. Rail network across the state Vizag is proposed to be the headquarter of the zone as the region houses major industrial as well as commercial establishments and is a busy railway junction in terms of passenger and freight traffic. The new zone will consist of Waltair Division of the East Coast Railway (ECoR) as well as Vijayawada, Guntur and Guntakal divisions of South Central Railway. The government has also planned to set up a high speed train between Hyderabad and the new capital city to ease traffic movement between the two states. Source: Maps of India 23

24 PHYSICAL INFRASTRUCTURE AIRPORTS Andhra Pradesh has eight operational airports/air strips at Visakhapatnam, Tirupati, Rajahmundry, Vijayawada, Bobbili, Nagarjuna Sagar and Puttaparthi. Airports across the state Apart from these, Donakonda airport is non-operational (closed) whereas four are under development in Nellore, Kurnool, Ongole and Kadapa. Visakhapatnam, also popular as Vizag, has an international airport, which is under the Navy's command. Airport statistics Passenger traffic-tirupathi airport 245,049 Nos Passenger traffic-hyderabad airport 10,404,353 Nos Passenger traffic-visakhapatnam airport 1,099,480 Nos Aircraft movement-tirupathi airport 2,985 Nos Aircraft movement-hyderabad airport 94,057 Nos Aircraft movement-visakhapatnam airport 11,445 Nos Cargo handled-tirupathi airport 6.0 tonnes Cargo handled-hyderabad airport 98,899 tonnes Cargo handled-visakhapatnam airport 2,812 tonnes Source: Andhra Pradesh state portal, Airports Authority of India 24

25 PHYSICAL INFRASTRUCTURE PORTS Andhra Pradesh has a 974 km long coastline and the second highest cargo handling port. Visakhapatnam port traffic (million tonnes) The Visakhapatnam port ranks amongst the top five of 13 major ports in the country. During , it handled million tonnes of cargo. 64,0 59,0 58,5 55, * 67, , ,0 The extension of the existing container terminal and the modernisation and upgrading of the iron ore handling complex will enable the port to increase its cargo handling capacity in the near term Other than Visakhapatnam, the state has five more operational ports. Apart from these, seven more ports are under development and three are proposed to be developed Coking coal, iron ore, petroleum products and thermal coal are some of the key products handled by the port. It also has a high volume of container traffic. Source: Port of Visakhapatnam, *Until March 2015 The first project, estimated to cost over US$ 100 million, has been awarded to the Visakha Container Terminal Private Ltd and the second, estimated to cost US$ million, was awarded to Essar Ports. 25

26 PHYSICAL INFRASTRUCTURE POWER As of June 2015, Andhra Pradesh had a total installed power generation capacity of nearly 20,745^ MW. Andhra Pradesh alone accounts for a installed capacity of 11, MW. Out of this state utility contributes 4, MW, private utilities contributes 4, MW and central contributes 1, MW. Thermal power is the major contributor in the installed capacity of the state with 7, MW followed by renewable energy with 1,946 MW. Installed power capacity (MW) The state has nine hydro power projects under operation and one under development. Moreover, the state has one operational wind power project. Most of the coal based power plants are located in the coastal regions because of their connectivity to the ports. The state also has three thermal power projects under operation, two projects under development and two projects under construction. Per capita consumption of electricity in Andhra Pradesh stood at kwh during The state is planning to add another 8,400 MW power by Source: Central Electricity Authority *As of June 2015 based on Business Line citation ^Including Telangana In July 2015, ReNew Power established a joint venture with Chinese solar power company Hareon Solar for the development of a 72 MWsolar power project in Andhra Pradesh. 26

27 DEVELOPMENT PROJECTS: SEZs (1/2) Andhra Pradesh Industrial Infrastructure Corporation (APIIC) is the agency responsible for the supervision and execution of SEZs in the state. As of March 2015, the state has 29 operational SEZs in the state across diversified sectors which include textiles and apparel, food processing, footwear and leather products, multi-product, pharma, IT SEZs etc. Some of the operational SEZs in Andhra Pradesh Name/Developer Andhra Pradesh Industrial Infrastructure Corporation Ltd Location Primary industry Vishakhapatnam Multi-product, IT/ITeS Achutapuram, Visakhapatnam Textile Mandal, Visakhapatnam Pharmaceuticals Chippada Village, Visakhapatnam Pharmaceuticals Mandal Tada, Nellore Footwear Hetero Infrastructure Nakkapalli Pharmaceuticals Parry Infrastructure Kakinada Food processing East Godavari IT/ITeS IFFCO Kisan SEZ Nellore Multi product Bharatiya International SEZ Nellore Leather sector Andhra Pradesh Industrial Infrastructure Corporation Ltd Nellore Multi product Brandix India Apparel City Private Ltd Ramky Pharma City Pvt Ltd Divi s Laboratories Apache SEZ Development India Andhra Pradesh Industrial Infrastructure Corporation Ltd Source: SEZ: Special Economic Zone 27

28 DEVELOPMENT PROJECTS: SEZs (2/2) Andhra Pradesh has four SEZs with valid in-principle approvals and 33 SEZs with formal approvals, as of March SEZs with valid in-principle approvals Name/Developer Location Primary industry NH-5 between Prakasam and Nellore District Building materials Ananthapur Multi-product M/s Drugs & Pharmaceuticals Manufactures Association Nakkapalli Mandal, Visakhapatnam Pharmaceuticals /APIs/formulations M/s Vivimed Labs Ltd Boyapalem, Naruva & Chittivalasa villages, Ranasthalam Mandal, Srikakulam Chemicals & pharmaceuticals Visakhapatnam Petroleum and oil & gas industry South Coast Infrastructure Development Co of Andhra Pradesh Private Ltd (SCIDCAP) Lepakshi Knowledge Hub Private Ltd M/s Planet SEZ Private Limited Source: 28

29 KEY PUBLIC-PRIVATE PARTNERSHIP (PPP) PROJECTS Sector Project cost (US$ million) Stage Roads and bridges 2.4 Under construction Solid waste management Under construction Ports (excluding captive) Under construction Tourism 6.6 Under construction Bay park at Rushikonda Visakhapatnam Tourism 6.3 Under construction Dispensary site at Maddilapalem Common infrastructure for industrial parks, SEZ 2.0 Under construction Machilipatnam port development Ports (excluding captive) Under construction Five star hotel Shilparamam Madhapur Hyderabad Tourism 39.3 Under construction Golf course at Shamirpet RR district Tourism 9.5 Under construction SPA hotel and training centre in beauty care and hospitality management Tourism 16.6 Under construction Three star hotel with health spa project Tourism 8.3 Under construction Project name Design construction finance operation maintenance of 2 lane bridge across Musi river of Miryalguda Kodad Road including approa Integrated solid waste management (3800 TPD) for Hyderabad Vodarevu Nizampatnam ports and port based corridor development Family entertainment center and 3 Star hotel canal guest house at Vijayawada Source: Department of Economic Affairs, Government of India, Converted using flat exchange rate of INR 60.28/US$ 29

30 DEVELOPMENT PROJECTS: INVESTMENT AND MANUFACTURING ZONES During the tenure of the last central government, the state received in-principle approval from the government for setting up two National Investment and Manufacturing Zones (NIMZs) in Chittoor and Prakasam districts. The state will develop NIMZs as integrated industrial townships, with state of the art infrastructure and land use on the basis of zoning, clean and energy efficient technology, necessary social infrastructure and skill development facilities. They are expected to attract investment of around US$ 10 million and would have an employment potential of 0.3 million each. Two new NIMZs The state government is planning to set up the new capital for the state between Vijayawada and Guntur, which will be based on the draft master plan by International Enterprise Singapore. Moreover, in September 2014, the government announced plans to develop 3 mega cities and 14 smart cities across the state as part of the decentralised development agenda. New capital city and 10 smart cities The proposed Visakhapatnam-Chennai industrial corridor is expected to attract investments of US$ 16.7 billion and will create more than 50,000 jobs. This will be developed in two or three phases spanning more than 15 years. Moreover, Visakhapatnam has been included in the upcoming Chennai-Bangalore Industrial Corridor. The former will provide a thrust to industrial development across various districts and villages in the state along the stretch of the corridor, whereas the latter will lead to development across Anantapur, Chittoor and Nellore. Industrial corridors 30

31 PHYSICAL INFRASTRUCTURE TELECOM According to the Telecom Regulatory Authority of India (TRAI), undivided Andhra Pradesh had nearly 71.5 million wireless subscribers and 1.8 million wireline subscribers as of May According to the Department of Telecommunications, Government of India, the undivided state had 4,314^ telephone exchanges and 128,776^ public call offices (PCOs) as of May The overall tele-density in undivided Andhra Pradesh stood at 75.8^ per cent as of May Optical fibre cable networks of BSNL with 44,500^ km, Reliance with 6,000^ km, Bharat with 3,450^ km and Tata with 1,700^ km provide a wide range of communication networks to Andhra Pradesh. As of May 2015, there were 18,098^ post offices in the state. BSNL announced that there will be no charge of inter-state roaming between Telangana and Seemandhra until In August 2015, Xiaomi established a tie up with Foxconn for the assembling of smartphones in Sri City, an industrial park in Chittoor district of Andhra Pradesh. Telecom infrastructure (as of May 2015) Wireless subscribers 71,578,461 Wire-line subscribers 1,845,876 Broadband subscribers^ 4,810,000* Telephone exchanges^ 4,314 Public Call Offices (PCOs)^ 128,776 Source: Telecom Regulatory Authority of India, India Post *As of March 2014 ^For undivided Andhra Pradesh BSNL: Bharat Sanchar Nigam Limited In 2024 when the licensing of spectrum ends, a new spectrum auction would be conducted for the two states and the norms would be set at that time for inter-state roaming. 31

32 SOCIAL INFRASTRUCTURE EDUCATION Andhra Pradesh has a literacy rate of 67.4 per cent, according to provisional data released by Census During , 8.1 million students were enrolled in 60,659 schools. There were 40,929 primary schools, 9,575 upper primary schools, 9,994 high schools and 161 higher secondary schools. The total number of teachers reached 104,047. Classes Number of schools ( ) (I-V) 42,440 (I-VII/VIII) 8,964 (I-XII) 178 (I-X) 976 (VI-X) 10,674 In medical education, Andhra Pradesh has 21 medical colleges with eight in the government sector. Andhra Pradesh has 20 state run universities, with 10 in the coastal Andhra region and the other 10 in the Rayalaseema region. The State Reorganisation Act has ensured the retention of existing admission quotas in educational institutions for a period of 10 years. In order to provide equal benefits to the students of the newly formed states, the government has given its nod to set up an IIT, an IIM, three central universities, an IISER and an IIIT among other institutes in Andhra Pradesh. Course Junior colleges Number of colleges ( ) Number of students enrolled 3, ,762 B Ed training colleges ,049 Engineering ,588 Pharmacy colleges ,040 MBA colleges Polytechnics ,980 Source: Commissioner & Director of School Education, Andhra Pradesh state portal For updated information, pl*ease visit 32

33 SOCIAL INFRASTRUCTURE HEALTH As of , Andhra Pradesh had 1,624 primary health centres and 41,675 beds. State also had 280 allopathic hospitals as of Moreover, the state also had three ayurvedic hospitals and three homoeopathic hospitals. Major hospitals Apollo Hospital Care Hospital Recently, various super-specialty hospitals are coming up across the state mainly in the coastal area of Vijayawada. The city is anticipated to become the largest destination for medicare in coastal Andhra. Various hospitals are planning to set up operations in the state and some are in the process of expanding their existing facilities. This includes doubling of bed strength by The Krishna Institute of Medical Science and setting up of three hospitals comprising of 800 beds by Apollo Group. Moreover, a central government funded health institute, similar to All India Institute of Medical Sciences, is expected to come up in Vijayawada. The government has already sanctioned US$ 200 million as the first instalment for the purpose and another US$ 48.7 million has been sanctioned for the development of all the hospitals in Krishna district. The GVK Group is planning a specialty hospital and medical college in Sri City multi-product economic zone, Andhra Pradesh. Manipal Hospital Krishna Institute of Medical Sciences Health indicators ( ) Birth rate* 17.4 Infant mortality rate** 39 Medical facilities ( ) Hospitals 460 Primary health centres 1,624 Dispensaries 1837 Regular doctors 6,,087 Contract doctors 876 Beds available 41,765 Source: Andhra Pradesh state portal, *Per thousand persons, **Per thousand live births 33

34 SPORTS AND CULTURAL INFRASTRUCTURE There are several sports complexes in the state spreading across Visakhapatnam, Tirupati and other cities. Although cricket and tennis are the major sports, other games are also popular. Stadiums and sports complexes in Visakhapatnam Aqua Sports Complex Visakhapatnam has seven cricket stadiums which are used for Ranji Trophy matches whereas a few of them are also used for one day international matches. The city has a golf course named the East Point Golf Club. Port Trust Golden Jubilee Stadium The Tirupati temple and Kanakadurga temple makes the state one of the leading religious tourism spots in the country. Indira Priyadarshini Stadium South Eastern Railway Stadium Police Stadium Steel Plant Township Stadium Zinc Stadium Moreover, the project for developing the beach corridor from Visakhapatnam to Bhimili is progressing rapidly and tenders have been called for development of RK Beach and Rishikonda. Furthermore, the state s long coastline offers high potential to develop beach resorts that can turn into tourist hotspots. Other revenue generating tourist hotspots of the state include the Buddhist sites in Krishna and Guntur districts and the Chandragiri Fort in Chittoor. GITAM Engineering College Synthetic Tennis Court ACA-Visakhapatnam District Cricket Association's Stadium Golden Jubilee Indoor Stadium Swarnabharathi Indoor Stadium GITAM Indoor Sports Stadium Andhra University Grounds 34

35 SMART CITY (1/2) In September 2014, Andhra Pradesh government proposed to develop 14 smart cities. Major towns which are anticipated to be developed as smart cities are Kakinada and Rajahmundry Srikakulam, Vizianagaram, Guntur, Nellore, Prakasam, Anantapur and Kurnool. Additionally Kadapa town would be developed into Industrial smart city. Water supply, solid waste management, sewerage, multimodal transport, cyber connectivity, roads, airports, railways and social infrastructure are the key aspects of the smart city project in Andhra Pradesh. In Andhra Pradesh majority of the proposed smart cities are located in special investment regions or special economic zones with reformed regulations and tax structures which makes it highly attractive for foreign investments. In January 2015, the state government of Andhra Pradesh announced to set up its own smart cities. Government of India is planning to invest US$ 115 billion for the development of 100 smart cities across the country till Out of these, 46 cities and towns are from Telangana and Andhra Pradesh. In August 2014, the Andhra Pradesh state government sent a list of few cities for inclusion in the Centre's smart city project. The state government has decided to set up its own smart cities in the areas of Krishna and Guntur, Tirupati and Rajahmundry. In order to convert Andhra Pradesh into a impeccably smart state, the state government has laid out few plans such as a five-grid network, mission-mode administrative initiatives, new-age university and institutions and a 21st century capital city. In the similar direction the state government is also taking actions towards energy, gas, farming and IT sectors for the effective development of 21st century capital city. Apart from the development of smart cities, state government is also planning to build or convert villages, universities, institutes of higher learning and R&D institutions in a smarter way. Source: TechSci Research & news articles 35

36 SMART CITY (2/2) Increasing investments towards smart cities and capital city are expected to create strong growth opportunities for various sectors such as power, water, oil & gas, transportation infrastructure and optical fibre communications. Under optical fibre grid, connectivity of the optical fibre is expected to reach all households in every village and the road grid is anticipated to connect with every village and port. Under the water grid, the government is planning to avail separate pipelines for industry, agriculture and domestic consumption. Under the gas grid, the resources from Krishna Godavari Basin (KG-basin) and other gas resources would be transported to every industry and every household for LPG and CNG. The state has already been sanctioned an LNG terminal in 2014, which will be set up by Petronet LNG Ltd. Andhra Pradesh state government announced plans to construct the new capital city of Andhra Pradesh on the southern side of Krishna river (near Vijayawada). The master plan for the construction has been submitted by International Enterprise Singapore (IES). The state government represented the capital city area as a production and trading hub in various sectors such as IT, ITes, electronics, auto and agriculture-processing. Vijayawada is represented as the business and trading hub in IT, ITeS, electronics, auto and agriculture processing, whereas, Guntur as an agriculture, processing and textile trading hub. Source: TechSci Research & News Articles 36

37 INDUSTRIAL INFRASTRUCTURE Andhra Pradesh Industrial Infrastructure Corporation filed the applications on line with Development Commissioner MSME for the following 10 Industrial clusters for in principle approval / Government of India grant. Location of Industrial Cluster Type of Cluster No of Acres Project Cost (US$ Million) Makavaripalem-Visakhapatnam Aluminum & General Engineering cluster Kopparthi-Kadapa Engineering Cluster Gandrajuaplli-Chittoor Silk & Garments cluster Peddapuram-E.G Distt Traditional Food cluster Mangalagiri-Guntur Distt General Engineering Park Machilipatnam-Krishna Distt Upgradation of existing Imitation Jewellery park Palakollu-W.G. Distt Upgradation of existing Coir park Palasa-Srikakulam Distt Upgradation of existing Cashew park Source: APIIC, *US$ 1= INR 60 37

38 KEY INDUSTRIES IT AND IT-ENABLED SERVICES (1/4) Andhra Pradesh accounts for 2 per cent of the country s IT export turnover and about 1.8 per cent of the employment by June The government is planning to make the state an IT power house in the coming years. According to an announcement made by the Minister for Information Technology in July 2014, Visakhapatnam is set to be developed into the IT capital of the state. These include allocation of an SEZ to Wipro, 10 acres to Tech Mahindra & 13 acres to Society for Applied Microwave Electronics Engineering and Research. Apart from Visakhapatnam, cities such as Vijayawada, Tirupati, Kakinada and Anantapur will also be developed into IT hubs. Madhurawada, located in the north-east of Visakhapatnam, has already been developed as an IT hub. Various IT firms have been allocated land in this area to develop and start their operations while few of them are already operational. Big brands such as IBM, Tech Mahindra and Wipro already operate in Vizag. Moreover the city has close to three universities which produce more than 35,000 IT graduates every year. As part of the state government's commitment to transform Vizag into a major IT hub, lands have been allocated to three major companies. Source: Andhra Pradesh IT department, News articles 38

39 KEY INDUSTRIES IT AND IT-ENABLED SERVICES (2/4) Andhra Pradesh government is planning to set up Information Technology Investment Regions (ITIR) in Visakhapatnam, Anantapur, Vijayawada, Tirupati, Kakinada and Chittoor districts. A detailed report on the proposed Visakhapatnam ITIR, which would spread across 12,000 acres, has been prepared and submitted to the state government and is expected to be implemented over a period of 25 years in two phases. Tirupati/Anantapur/ Nellore ITIR Another ITIR is proposed to be set up across 4,000 acres of land near the international airport at Tirupati, 4,000 acres of land at Anantapur, near Karnataka border and another 4,000 acres at APIIC s industrial corridor of Chittoor-Nellore. Investment potential of US$ 40.4 billion from Vizag Proposed ITIRs Visakhapatnam ITIR The state expects the Visakhapatnam ITIR project to have an investment potential of US$ 7.5 billion and revenue of US$ 6.2 billion. Direct and indirect employment generated from the project is estimated at 0.43 million and 1.71 million, respectively, once it is fully functional. Source: News articles 39

40 KEY INDUSTRIES IT AND IT-ENABLED SERVICES (3/4) In , IT exports from Andhra Pradesh stood at nearly US$ 4,931 million and employ nearly 18,440 people. In order to increase the contribution of IT exports and employment from Seemandhra, the state has drafted a guideline to address the key determinants of successful growth in the IT and electronics sectors. Parameter Contribution from Seemandhra Exporting units registered with STPI 27 Export turnover of STPI units (US$ million) Employment ('000s) 4 Major indicator Goal to be achieved by 2020 Make all government to citizens and government to business services available online and on mobile To attain number one position in etaal by 2017 and maintain it through 2020 Share in the national IT exports 5 per cent Investments in IT US$ 2 billion by 2017 & US$ 5 billion by 2020 Investments in electronics manufacturing US$ 5 billion by 2017 and US$ 10 billion by 2020 Employment created in electronics and IT 0.3 million by 2018 and 0.5 million by 2020 Broadband penetration Gigabit connectivity to all gram panchayats by 2017 and to all villages by 2020 Source: Andhra Pradesh IT vision 40

41 KEY INDUSTRIES IT AND IT-ENABLED SERVICES (4/4) Tech Mahindra, part of Mahindra Group conglomerate and headquartered at Mumbai, provides information technology, networking technology solutions and business support services to the telecommunications industry. The company, having operations in Visakhapatnam, merged with Mahindra on March 21, 2012 and together the new entity serves 540 corporate customers across 49 countries. The company reported a revenue of US$ 3.2 billion financial year IBM is a leading global IT services and solutions provider, with operations in over 170 countries across the world. Products offered by the company s Indian operations include software, storage, systems and servers and semiconductors. IBM has been present in India since Since inception, IBM in India has expanded its operations considerably, with regional headquarters in Bengaluru and presence in over 200 cities and towns across the country; including a global delivery centre in Visakhapatnam. Established in 1945, Wipro ventured into the IT services industry in the 1990s. The company was among the pioneers in developing the Offshore Development Centre concept in India. In order to focus on core IT business, it separated its non-it businesses into a separate entity named Wipro Enterprises Limited with effect from 31 March Currently, the former company provides information technology, consulting and outsourcing services to over 900 clients across more than 175 cities across 6 continents. In 2012, the company opened a delivery centre in Vishakhapatnam. The company has an employee base of 146,053 and posted revenues of US$ 6.9 billion during financial year Tech Mahindra IBM Wipro 41

42 KEY INDUSTRIES PHARMACEUTICALS (1/2) Andhra Pradesh is home to many global and national pharma players; various companies have set up their manufacturing hubs in Visakhapatnam and Srikakulam districts. Parawada, Nakkapalli, Pydibhimavaram and Ranasthalam are the largest pharma manufacturing centres in the state that have attracted several investments, particularly in bulk drug sector. While Parwada and Nakkapali are located in Vishakapatnam, the other two are located in Srikakulam. Jawaharlal Nehru Pharma City, an integrated industrial park located in Visakhapatnam, has various bulk drug manufacturers, pharmaceutical companies and fine chemical manufacturers, with nearly 45 pharmaceutical companies. The state provides ample opportunities for pharma companies due to availability of ports, pharma city, international airport, large parcels of land for expansion and good effluent treatment facilities. Various global pharma companies have already set up their manufacturing hubs across the state which include Japanese and US giants such as Eisai, Ajinomoto, Mylan and Hospira. Few of the national players to set up their manufacturing hubs in the state include Dr Reddy's Laboratories, Aurobindo Pharma, Hetero Drugs etc. A 40-member high level team has been set up by the state government to provide directions to new investments in the pharmaceuticals sector. In August 2015, the state government of Andhra Pradesh has announced that the US-based pharma company Mylan is planning to invest US$ 5 billion in Andhra Pradesh. Some of the key players Eisai Granules India Hospira Dr Reddy's Laboratories Aurobindo Pharma Mylan Omnichem Source: News articles 42

43 KEY INDUSTRIES PHARMACEUTICALS (2/2) Aurobindo Pharma Ltd Founded in 1986, Aurobindo Pharma is an India based pharmaceutical manufacturing company. The company, which manufactures generic pharmaceuticals and active pharmaceutical ingredients, markets these products across 125 countries. The company has a manufacturing plant in Vizag. During , the company reported revenues of US$ 1.3 billion. Dr Reddy's Laboratories Incorporated in 1984, Dr Reddy's Laboratories manufactures and markets a wide range of pharmaceuticals across domestic and overseas markets. The company s products include generic formulations, APIs, bio-similars etc. It has expanded its presence across the globe through steady organic growth, partnerships and acquisitions. During , the company reported revenues of US$ 1.6 billion. Mylan Laboratories Ltd (formerly known as Matrix Laboratories Ltd) is a subsidiary of USbased Mylan Inc and has one USFDA-approved facility in Visakhapatnam. It is one of the world s largest manufacturers and suppliers of active pharmaceutical ingredients (APIs) for a wide range of therapeutic categories including antibacterials, central nervous system agents, antihistamine/anti-asthmatics, cardiovasculars, antivirals, antidiabetics, antifungals, proton pump inhibitors and pain management drugs. Granules India is a Indian pharmaceutical company with manufacturing facilities spreading across India and China. The company serves customers across 60 countries with four facilities in India, which includes Vizag and a fifth facility in Jingmen, China. The company recently acquired Auctus Pharma and is looking towards further expansion of its business through both organic and inorganic routes. Mylan Laboratories Ltd Granules India Ltd 43

44 KEY INDUSTRIES APPARELS AND TEXTILES Andhra Pradesh produces medium grade and superior long staple varieties of cotton. During , the state produced nearly 1,543 thousand tons of cotton. In 2015, state government plans to set up two mega handloom clusters with an investment of US$ 16.5 million in each of them at Mangalagiri and Chirala in the state. Few of the major cotton producing districts in the state include Vizianagaram, East Godavari, Guntur, Prakasam and Kurnool. Andhra Pradesh has emerged as a large textile processing centre. There are nearly 100 mills in the state, with coastal Andhra having a lion s share. The undivided Andhra Pradesh government has identified the textile sector as one of the long term growth engines. To utilise the potential of the sector, the government has established five Apparel Export Parks (AEPs) and seven textile parks. It has proposed to establish a few more AEPs and textile parks in the state. There are over 150 spinning mills including a number of 100 per cent export oriented units with state-of-the-art machinery; producing cotton, synthetic and blended yarns in the undivided state. Between April 2006 and February 2012, 55 handloom clusters were sanctioned under the Integrated Handlooms Development Scheme in the Seemandhra and Telangana regions. Handloom and textile exports for undivided Andhra Pradesh (in US$ million) 1.152, ,00 CAGR 28.9% FY 07 FY 08 FY 09 FY 10 FY 11 FY 12 FY 13 FY 14 FY 15 Source: Andhra Pradesh Socio-Economic Survey , News articles, 44

45 KEY INDUSTRIES AGRI AND PROCESSED FOOD SECTOR (1/3) The presence of rich climatic and soil conditions is expected to make Seemandhra a major agricultural belt. Few of the leading crops produced in the state include rice, chilly, oilseeds, cotton, pulses and gram. Seafood exports from Andhra Pradesh (in US$ million) 1,269.0 The state s Krishna, Guntur, East and West Godavari districts have good irrigation facilities which help it to produce a large amount of rice. The state produced 6.86 million tonnes of rice, 1.1 million tonnes of pulses, 1.98 million tonnes of oil seeds and 1.54 million tonnes of cotton during the financial year The districts of Nellore, Krishna and Guntur are very fertile, with above average production of cereals, pulses, groundnut and cotton. CAGR 44.7% 565,7 199,9 199, ,1 286, * Source: Vizag Industrial Scan Industrial newspaper, Andhra Pradesh state portal, *Till November

46 KEY INDUSTRIES AGRI AND PROCESSED FOOD SECTOR (2/3) Australia has a plan to invest in the state to develop it as the marine processing hub of the country as a part of which, it has invited the ministry to attend the seafood convention in Perth in October In , undivided AP claimed the highest record in fish production with 20 lakh tonnes and contribution of lakh tonnes by AP alone. The state government proposed to set up a fish landing centre at West Godavari district with an estimated cost of US$ 2.6 million. The state government has proposed to set up an aqua park at Bhimavaram in 60 acres with an investment of US$ 58.7 million. 46

47 KEY INDUSTRIES AGRI AND PROCESSED FOOD SECTOR (3/3) Mondelez India Foods Ltd Mondelez India Foods Ltd is part of Mondelēz International, Inc. It operates in five categories chocolate confectionery, beverages, biscuits, gum and candy. The company s key brands in India include Cadbury Dairy Milk, Bournvita, 5 Star, Perk, Bournville, Celebrations, Gems, Halls, Éclairs, Bubbaloo, Tang and Oreo. The company is planning to launch a Cadbury chocolate production plant in Chittoor district with an estimated cost of US$ million and would commence production from mid Cargill maintains a number of businesses in India, with operations including handling and processing of a wide range of products such as refined oils, grain and oilseeds, sugar, cotton and animal feed. Cargill s presence in India has been growing since it began a joint venture (JV) operation in In 2006, it entered into a JV and subsequently took over a leading shrimp feed manufacturing farm in Rajahmundry. It has also entered into a JV with EID Parry for a sugar refinery at Kakinada in the state. ITC is a large Indian business conglomerate with diverse business interests including agrifoods, paper, fast moving consumer goods, lifestyle and retailing and hotels. Over , its revenue was around US$ 5.9 billion. A substantial part of ITC s agri-business is located in Andhra Pradesh. The company has a unit in Anaparti and Chirala, and a research centre in Rajamundhry. The company also runs its innovative internet based e-choupal initiative in the state for the benefit of farmers. APDDCF runs 12 dairy plants and manufactures milk products under the Vijaya brand. These plants together have a production capacity of 2,437 thousand litres per day. Products include butter, ultra-high-temperature (UHT) milk, milk powder, ghee, flavoured milk, khoya, kulfi and processed cheese. It is one of the 15 dairy cooperatives operating under the National Dairy Development Board (NDDB). It ensures MSP to the farmers and timely pick up of milk. Cargill India Pvt Ltd ITC Andhra Pradesh Dairy Development Cooperative Federation (APDDCF) 47

48 KEY INDUSTRIES TOURISM Andhra Pradesh is known for its pristine beaches, sacred places of worship, lush green forests, spicy cuisine and hospitable people. The state continued to witness increase in domestic tourist arrivals over the last few years. Number of tourist increased to million in 2014 from million recorded in Most of the tourist destinations in the state are concentrated in Visakhapatnam, Simhachalam, Araku and the beaches of East and West Godavari. Tirupati and Bhadrachalam are major temple destinations attracting a large chunk of travellers. The Tourism Corporation has already initiated the process and is working towards the development of a beach corridor from Visakhapatnam to Bhimili which includes the RK Beach and Rishikonda. Moreover, wild life tourism can be developed at Pulikat Lake in Nellore and the Kolleru Lake in Krishna and West Godavari districts. Arrival of domestic tourists in Andhra Pradesh (in million) 104,2 103,6 115,0 123,4 131, Few of the prospective locations that can be developed for tourism include the backwaters of Konaseema, beach resorts along the long coastal line, the Buddhist sites in Krishna and Guntur districts and the Chandragiri Fort in Chittoor Puttaparthi and Srikalahasti are the upcoming tourist destinations after the bifurcation of the state. Source: Ministry of Tourism, Government of India; News articles AP State Portal 48

49 KEY INDUSTRIES PETROLEUM, CHEMICALS AND PETROCHEMICALS (1/2) According to the Director General of Hydrocarbons (DGH), Andhra Pradesh has huge oil and natural gas reserves. The state s Krishna-Godavari basin, spread over an area of nearly 52,000 sq km, has a total hydrocarbon resource base of 1,130 million metric tonnes. Andhra Pradesh is the second Indian state, after Gujarat, to enter the oil and gas exploration and production segment through bids for oil and gas blocks under the central government s New Exploration Licensing Policy (NELP). The Andhra Pradesh government decided to enter the oil and gas exploration and development sector and set up a Special Purpose Vehicle (SPV), the Andhra Pradesh Gas Infrastructure Corp Limited (APGIC), as a joint venture between two state owned entities. The infrastructure provider for industries in the state, Andhra Pradesh Industrial Infrastructure Corporation (APIIC), owns 51.0 per cent in the SPV and the remaining is held by AP Genco. APGIC secured four blocks under auction as part of a consortium led by ONGC. APGIC owns 10 per cent in the consortium, while other partners ONGC, British Gas and Oil India hold 40 per cent, 35 per cent and 15 per cent, respectively. Recently, the DGH has earmarked a stretch of more than 39,000 sq km in Kadapa district in Rayalaseema region as a potential exploration site for natural resources. This region is most likely to be lined up for bidding in the upcoming rounds of NELP. The newly elected government of the state is committed to make the state one of the top 20 places for work and business with easy clearances and less hindrances, as oil and gas is a top priority in the Make in India initiative of newly elected PM Mr Narendra Modi. Source: Ministry of Petroleum and Natural Gas, News articles 49

50 KEY INDUSTRIES PETROLEUM, CHEMICALS AND PETROCHEMICALS (2/2) In May 2014, the Visakhapatnam-Kakinada Petroleum, Chemical and Petrochemical Investment Region Special Development Authority (VK- PCPIR SDA) has developed and released the final draft master plan and zonal development plans with the land use proposals. The plan has been submitted to the state government. The PCPIR project would boost refining, petrochemicals and chemical industries and also the manufacturing sectors in the state. During , a petro chemical complex has been proposed to be developed with an estimated cost of US$ 6.6 billion between Vizag-Kakinada. The project will bring investment in the state and will help to boost trade and exports, develop infrastructure and increase employment. Key features of PCPIR The investments generated in the PCPIR are estimated to be around US$ 72.3 billion. Total area 640 sq km; Processing area 270 sq km The project is said to have an employment generation capacity of 1.2 million As per the latest update, total committed investments stood at US$ 57.2 billion The petroleum and petrochemical sector accounted for around 63 per cent of total committed investment. Major investors in PCPIR HPCL is considering the setting up of a greenfield 15 mmtpa refinery-cum-petrochemical complex in the region which would require investments to the tune of US$ billion. Moreover, the company is about to expand capacity at its refinery in Visakhapatnam from the current 8.3 mmtpa to 15 mmtpa over 3 to 4 years with an investment of US$ 0.9 billion. In 2015, Andhra Pradesh has signed an MoU with Kuwaiti firm, Al Qebla Al Watya Inc. to set up a petroleum refinery. Source: Andhra Pradesh PCPIR MMTPA: Million Metric Tonnes Per Annum 50

51 KEY INDUSTRIES MINES AND MINERALS Andhra Pradesh is one of the leading producers of various minerals such as chrysotile asbestos, barytes, mica, felspar, vermiculite, quartz, laterite, silica sand, dolomite and limestone. The state accounts for 94% barytes, 78% Kyanite, 61% ball clay, 70% corundum, 6% diamond, 42% calcite, 41% mica, 26% garnet, 23% ilmenite, 20% limestone and 15% dolomite resources of the country. India had 3,722 mines in , out of which 661 were accounted for by Andhra Pradesh. Minerals Manganese ore Availability across districts Nellore, Prakasam, Vizianagaram and Srikakulam Seemandhra is rich in mineral resources which include manganese, limestone, mica, steatite, copper, graphite etc. Mica Krishna, Nellore, Chittoor, Ananthapur, West Godavari, Visakhapatnam, Guntur, Chittoor, Ananthapur,and West Godavari Manganese ore is located across Nellore, Prakasam, Vizianagaram and Srikakulam, mica is found around Krishna, Nellore, Visakhapatnam etc. whereas limestone is found around Kadapa district. Steatite/talc Ananthapur, Chittoor, Cuddapah and Kurnool Seemandhra region has abundant reserves of uranium in Tumalapalli village located in Kadapa. According to a study conducted by the Atomic Energy Commission of India, the mine is expected to have the largest reserves of uranium in the world. Copper Cuddapah, Guntur, Kurnool, Nellore and Prakasam Graphite East Godavari, West Godavari, Visakhapatnam and Srikakulam The Government of India has started exploration of sizable uranium deposits in YSR district in Andhra Pradesh through M/s. Uranium Corporation India Ltd, a public sector undertaking and Source: Indian Mineral Scenario States, plans to set up a processing plant with an estimated production of Ministry of Mines website, Socio Economic survey ,000 tonnes per day and planned to start operations from

52 KEY INDUSTRIES OTHER GROWTH SECTORS (1/2) Leather Gems and Jewellery Andhra Pradesh is one of the major producer for hides and skins in India, contributing about 19 million pieces per annum, which accounts for about 10% share in the country s raw material. Majority of the raw material is consumed by states such as Tamil Nadu and West Bengal. Major clusters for leather production are Hyderabad, Bhimavaram, Cuddapah, Eluru, Karim Nagar etc. Andhra Pradesh houses 450 slaughter houses and 34 large and medium tanneries with total production output of about 40 million square feet. The government provides financial assistance in the form of investment grants to the extent of 30.0 per cent of cost of plant and machinery for small scale industries (SSI) and 20.0 per cent of cost of plant and machinery for other units, subject to a ceiling of US$ 120,000 for technology upgradation or/and expansion. The state government plans to promote a few more leather clusters across the state for providing basic infrastructure for artisans and small and medium enterprises. Moreover, the government is also planning to set up a leather complex in Kothapatnam, close to Krishnapatnam port and 160 km from Chennai and Ennore Ports. The state produces a wide array of precious and semi-precious stones as well as pearls. Gold is mostly available across Anantpur, Chittoor and Kurnool districts of the state. During the year , the government has identified new gold deposit areas in the northern part of Ramagiri-Penakacherla of Anantapur district Diamond is mostly found at Cuddapah, Anantapur, Kurnool, Krishna, Godavari and Guntur districts. 52

53 KEY INDUSTRIES OTHER GROWTH SECTORS (2/2) Hospitality, leisure and entertainment Being a major tourist hub in the country, the state is making rapid strides in the hospitality industry. With various corporates planning to have their footprint in the state, it will help in the development of the industry. The industry will get a further boost once the central government finalises the new capital for the state. In order to support the growth of the industry, APTDC is planning to implement various projects which include the introduction of cottages, jetties, houseboats in Krishna and Godavari rivers. Some of the other projects of the corporation include the Visakhapatnam-Bheemli beach corridor project, the Kalingapatnam temple circuit, a beach resort at Chintapalli in Vizianagaram and a budget hotel at Arasavalli, etc. The state government is in talks to invite Hollywood to set up a film making facility in order to impart technical training. The state also produces steel from its Visakhapatnam Steel Plant. The state exports steel products to Japan, Germany, United States, Singapore, Dubai, Australia and various South American countries. Apart from the plant, in May, 2014, the government announced to set up a public sector steel plant (by Steel Authority of India) in Kadapa. Ministry has planned to dedicate US$ 2.04 billion for the expansion of the steel project to produce 6.3 million tonnes of steel per annum. The Ministry of Steel has set a target of US$ 2.9 billion for the current fiscal, whereas the internal target of the management is to make serious efforts to achieve US$ 3.3 billion. Steel APTDC: Andhra Pradesh Tourism Development Corporation 53

54 SINGLE-WINDOW APPROVAL MECHANISM Andhra Pradesh is the first state in the country to have enacted the Industrial Single Window Clearance Act No 17 of The Act made it compulsory for new industries to register with the single-window to obtain clearances quickly. It also simplified procedures for getting industrial clearances. Committees were constituted at district and state levels to communicate to the applicant the status of their clearances. It has set time slots for issuing clearances and incorporated a provision for deemed approval after the expiry of the time limit. District level committees can clear investments not exceeding US$ 219,442. State level committees can clear those exceeding US$ 219,442. Above the district and state level committees is an empowered committee headed by the Chief Secretary of the state government, who reviews and monitors disposal of applications. Overall, a State Board under the chairmanship of the Chief Minister oversees the progress of the scheme. The maximum time taken to issue clearance of applications at all stages is 45 days. Violation of the provisions of the Act made either through self-assessment or otherwise would invite a penalty of US$ 109 in the first instance and US$ 219 in the second instance. 54

55 KEY INVESTMENT PROMOTION OFFICES Corporations under Industries and Commerce Department Andhra Pradesh Industrial Development Corporation (APIDC) Andhra Pradesh Industrial Infrastructure Corporation (APIIC) Andhra Pradesh Mineral Development Corporation (APMDC) Andhra Pradesh State Finance Corporation (APSFC) Andhra Pradesh State Trading Corporation (APSTC) Andhra Pradesh State Handloom Weavers Co-operative Society Limited (APCO) Leather Industries Development Corporation of Andhra Pradesh (LIDCAP) Andhra Pradesh Handicrafts Development Corporation (APHDC) Andhra Pradesh Khadi & Village Industries Board (KVIB) Andhra Pradesh Urban Financial Infrastructure Development Corporation Directorate of Sugar and Commissionerate of Cane Directorate of Mines and Geology Commissionerate of Industries 55

56 CONTACT LIST Agency Contact information Andhra Pradesh Industrial Infrastructure Corporation 4th Floor, Parisrama Bhavan Fateh Maidan Road, Basheerbagh Hyderabad Phone: , Fax: , hyd@apiic.in Website: Department of Industries and Commerce Industries and Commerce Department 2nd Floor, D Block, Room No-348A Secretariat Hyderabad Phone: Fax: secy_inds@ap.gov.in Website: 56

57 KEY APPROVALS REQUIRED (1/4) S No Approvals and clearances required Respective departments of state Estimated time 1 Registration, Industrial Entrepreneurs Memorandum (IEM), Industrial Licenses Registrar of Firms 2 Allotment of Land/Shed in Industrial Estates or Industrial Areas Andhra Pradesh Industrial Development Corporation 3 Acquisition and alienation of government lands Chief Commissioner of Land Administration (CCLA) 45 days 4 Building/Site Permission /Approval/License from Municipality/ UDA (Urban Development Authority) DT & CP (Directorate of Town & Country Planning) Department of Municipal Administration & Urban Development 7 days 5 Building /Site Permission from Gram Panchayat Department of Panchayati Raj & Rural Development 6 Approval of change of land use for Industrial purpose Land Administration Department of Revenue 7 days 7 days for up to 1,000 sq m 21 days for above 1,000 sq m 15 days / Deemed If in Master Plan - 10 days If not in Master Plan 21 days Source: Commissionerate of Industries, Government of Andhra Pradesh 57

58 KEY APPROVALS REQUIRED (2/4) S No 7 8 Approvals and clearances required Consent for establishment under Pollution Control Respective departments of state Green Orange Estimated time 7 days AP Pollution Control Board 15 days Red 21 days Green 7 days Consent for Orange 15 days operation under Red Pollution Control Authorization of units handling hazardous wastes 9 No-Objection Certificate for Fire Safety 10 Permission for Establishment of Distillery 11 Licence for possession and use of Rectified Spirit 12 Licence for possession and use of Denatured Spirit 13 VAT/CST registration AP Pollution Control Board 21 days Processed along with CFO Directorate of Fire Services Department of Home 15 days 30 days Prohibition & Excise Department of Revenue 21 days 21 days Commercial Tax Department of Revenue 3 days Source: Commissionerate of Industries, Government of Andhra Pradesh 58

59 KEY APPROVALS REQUIRED (3/4) S No 14 Approvals and clearances required Respective departments of state Power feasibility Estimated time 7 days DISCOM-Department of Energy To be based on the length of the HT line 15 Power connection 16 Approval of factory plans Directorate of Factories Department of Labor Employment Training and Factories 7 days 17 Factory license Directorate of Factories-Department of Labor Employment Training and Factories 7 days / Deemed for Registration only 18 Approval for water supply from ULB s-ma & UD Department 19 Water connection 20 Permission to draw water from river/public tanks, Irrigation & CAD Department Permission to dig new wells from Ground Water Department Department of Municipal Administration & Urban Department Irrigation & CAD Department 7 days 21 days 15 days Source: Commissionerate of Industries, Government of Andhra Pradesh 59

60 KEY APPROVALS REQUIRED (4/4) S No Approvals and clearances required Respective departments of state Estimated time 21 License for manufacture of ayurvedic, homeo, siddha, unani AYUSH-Department of Health, Medical & Family Welfare 15 days 22 License for manufacture of bulk drugs / formulations / cosmetics Drug Control Administration Department of Health, Medical & Family Welfare 15 days 23 Registration of Partnership Firms Registration & Stamps Department of Revenue 3 days 24 Registration under Professional Tax Commercial Tax Department of Revenue Spot approval 25 Registration of shops & establishments Commissionerate of Labor Department of Labor Employment Training and Factories Spot approval 26 Boiler registration Directorate of Boilers Department of Labor Employment Training and Factories 15 days 27 Registration of plastic manufacturers / recyclers AP Pollution Control Board 15 days 28 License for storage of petroleum, diesel and Naptha District Collector/ Civil Supplies Department 15 days Source: Commissionerate of Industries, Government of Andhra Pradesh 60

61 COST OF DOING BUSINESS IN Parameter Land price (US$ per sq m) Labour cost (minimum wages per day) Commercial Lease rent (US cents per sq ft per month) Electricity (US cents per kwh) Cost estimate (as per ) 19.8 to US$ 3.5 to US$ to Commercial: 5.40 to Industrial: 3.75 to 6.08 Residential rent (US cents per sq ft per month) 4.7 to 29.4 Five-star hotel room (US$ per night) 60 to 100 Water cost (US$ ) Computer Aided Registration of Deeds (CARD) Industrial (Visakhapatnam): 0.37 per 1,000 litres *Residential: 2.58 to 3.68 litres per annum from Household Service Connections The system has simplified and expedited the otherwise cumbersome registration process, as a result time taken for the process was reduced to a single day from 17 days earlier Source: Vijayawada Municipal Corporation, Visakhapatnam Industrial Water Supply Company, Property Sites, News articles, Travel sites, PwC report, Andhra Pradesh State Electricity Board. 61

62 STATE ACTS & POLICIES (1/5) Andhra Pradesh Solar Power Policy Objectives To encourage, develop and promote solar power generation in the state with a view to meet growing demand for power in an environmentally and economically sustainable manner. To attract investment in the state for the establishment of solar power plants. Read more Electronic Hardware Policy Objective To provide special incentives and facilities for the electronic hardware sector in line with the present ICT policy. The policy would cover areas such as industrial electronics, communication & broadcast equipment, computers & peripherals, and strategic electronics & components (semiconductors, solar & displays). Read more Food Processing Policy Objective To provide a special focus to the food processing industry by extending the benefits for five years from April 2010 to March The policy would cover areas such as horticulture, agriculture, animal husbandry, fisheries, agro food processing industries and allied industries. Read more 62

63 STATE ACTS & POLICIES (2/5) Information and Communications Technology (ICT) Policy Objective To make Andhra Pradesh one of the fore runners in the IT sector in the country The objective would be achieved through the following initiatives: Provision of congenial, industry friendly and proactive climate for IT companies to locate, grow and sustain their operations in a most competitive and hassle-free environment. Creation of employment opportunities for the educated youth of all sections of the society across regions. Achieving higher levels of exports, resulting in enhanced productivity and augmentation of GSDP To spread IT to every nook and corner of the state. Read more Leverage IT as a tool for the socioeconomic development of the state. Industrial Investment Promotion Policy (IIPP) Objective To build a strong and vibrant industrial economy that spins off large capital formation in the state and advances inclusive development of all sections of the population and industry that creates increasing employment opportunities, and raises wage incomes to higher levels through skill upgradation to improve the quality of life of citizens of the state. Read more 63

64 STATE ACTS & POLICIES (3/5) Tourism Policy 2010 Objectives To position the state competitively for attracting private sector investments in the tourism and hospitality sectors. To target incentives to the private sector better as per the state government's priorities in terms of geographical areas and tourism products. To focus on maximum generation of employment in the sector by the development of human resources through capacity building. Read more Biotechnology Policy 2001 Objective To undertake a detailed inventory evaluation of bio-resources in the state to encourage Research and Development (R&D), develop high quality infrastructure and provide special incentives to the biotech industry. Read more 64

65 STATE ACTS & POLICIES (4/5) Textile & Apparel Policy Objectives To encourage, develop and promote textile and apparel industry in the state by focusing on cotton spinning, weaving, dyeing & processing, knitting etc., within textile value chain. To attract investment in the state for the establishment of Textile and Apparel Parks. Read more Biotechnology Policy Objective To undertake a detailed inventory evaluation of bio-resources in the state to encourage Research and Development (R&D), develop high quality infrastructure and provide special incentives to the biotech industry. Establishment of Life sciences Park and Life Sciences Knowledge Centers. Read more Automobile and Auto-Components Policy Objective To provide a special focus on Automobile Industry by the provision of subsidies and reimbursements on CST, VAT/SGST. The development of Industrial Corridors(VCIC/CBIC) by providing excellent port logistics and infrastructure has been highlighted in the policy. To attract high investments in the state and improving the employment status. Read more 65

66 STATE ACTS & POLICIES (5/5) Andhra Pradesh Solar Power Policy 2015 Objectives To encourage, develop and promote solar power generation in the state with a view to meet growing demand for power in an environmentally and economically sustainable manner. To attract investment in the state for the establishment of solar power plants. Read more Industrial Development Policy Objective To ensure sustainable & inclusive industrial growth To be among the Top 3 states in terms of industrial investments by 2022 and be the most preferred logistics hub and India s gateway to East and Southeast Asia by To enhance the quantum and quality of skilled manpower and create significant employment Read more opportunities. Andhra Pradesh Single Desk Policy Objective To create a conducive ecosystem to provide all clearances required to setup industry within 21 working days. To provide spot and deemed approvals based on self-certification and to provide parallel processing of streamlined processes. Read more 66

67 CONFERENCES/SUMMITS FOR Upcoming Conferences IRAJ-International Conference on Research and Development in Engineering & Technology (ICRDET) AECE-International Conference on Electrical, Electronics And Computer Engineering (ICEECE-2015) IGR Forum-International Conference on Recent Innovations in Electrical, Electronics, Computer and Mechanical Engineering(ICRIEECME-2015) The ASAR-International Conference on Electrical, Electronics and Computer Engineering(ASAR-ICEECE-2015) ITR-International Conference on Mechanical And Production Engineering(ICMPE-2015) National Conference On Emerging Trends Of Advanced Functional Materials (Ncafm-2015) IRAJ-International Conference on Cloud Computing and Computer Science (ICCCS 2015) International Conference on Micro-Electronics, Electromagnetics and Telecommunications Venue of Conference Date of Conference Vijayawada July 5, 2015 Tirupati July 11,2015 Vijayawada July Tirupati July Tirupati July Vijayawada August 3,2015 Tirupati August 16,2015 Vishakapatnam December 18,2015 Source: India Conferences Alerts 67

68 ANNEXURE Average exchange rates Year INR equivalent of one US$ Q Source: Reserve Bank of India 68

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