Andhra Pradesh is the eighth largest
state in India and besides having abundant natural resources and mineral wealth,
it boasts of the second longest coastline in the country. The State has
thirteen districts. With Chandrababu Naidu back as its Chief Minister, a lot
can be expected in the State in the near future.
The state has two big ticket
investments to its name. One is Isuzu Motor and the other is Hero MotoCorp.
Isuzu Motors India Private Limited (IMI), a subsidiary of Isuzu
Motors Limited, Japan, was established in August 2012 and is currently
operating out of Chennai, Tamil Nadu. The company has a contract manufacturing
agreement with Hindustan Motors (HML) under which HML is assembling CKD kits of
Isuzu’s Sports Utility Vehicle MU-7 and pick-up truck D-Max, at its
Thiruvallur, Chennai plant.
Isuzu began civil works on its proposed manufacturing plant
site in SriCity, TADA, Chitoor District, Andhra Pradesh, in January 2014. The
company had acquired 107 acres of land in 2013 after signing a MoU with the
Andhra Pradesh State Government in order to start automobile manufacturing
operation in India. This new facility is likely to commence commercial
operations by early 2016, with the initial production capacity at 50,000 units/
year. Isuzu will scale up the production capacity to 120,000 units / year, with
the accumulated investment of Rs. 3,000 crore, and is expected to generate 2000
- 3000 jobs.
As for Hero MotoCorp, it plans to set up a plant in Andhra
Pradesh after it builds one in Gujarat.
The State’s Swarnandhra Vision
2029 envisions transforming Andhra Pradesh to be among India’s three best
states by 2022 and a developed state by 2029. The Andhra Pradesh government has
constituted seven missions, as part of its "Vision 2029" for facilitating
inter-departmental synergy and optimising public/ private investments by providing
an effective planning and delivery mechanism. The thrust of the mission approach
would be to assist departments on pre-identified, specific, growth-promoting, large
social and economic infrastructure projects which require inter-departmental synergy.
The seven missions are – Primary Sector, Social Empowerment, Knowledge
& Skill Development,
Industry, Infrastructure, Urban Development and Services Sector.
The State also has an Automobile
and Auto Components Policy 2015-2020. The policy is targeting:
1. To make Andhra Pradesh one
of the most preferred destinations for automobile and
auto component investments
2. Attract new investments
worth at least ?20,000 crore in the sector by 2020
3. Create additional
employment opportunities for 200,000 people in the sector by 2020
The key highlights of the
Policy are mentioned below:
a) Skill Development:
i) Industry-Academia partnerships to promote
apprenticeship model and R&D
ii) Quality testing cum R&D laboratories
in collaboration with leading global institutions
iii) APSSDC’s capacity building programs
b) Labour Concessions:
i) Automobile industry will be declared to be
a ‘Public Utility’
ii) Will allow 24X7 operations
iii)Employment of women in the night shifts,
flexibility in employment conditions
c) Auto Clusters for OEMs and
i) Multiple world-class Automotive Suppliers’
Manufacturing Centers (ASMC) on a PPP
ii) 2 major Auto Clusters (apart from the
ASMCs mentioned above) in the PPP mode in districts of Nellore and Chittoor
d) Special Land Allocation and
Water Supply norms for mega-integrated automobile projects
e) Capital Subsidy for common
f) Financial incentives for
Patents/ Quality Certifications and Marketing by MSMEs
g) Stamp Duty concessions for
reducing upfront costs, Entry Tax and Octroi concessions
h) VAT/CST/SGST reimbursement
incentives varying by size and nature of project
“...The State has undertaken
series of measures to improve ease of doing business such as strengthening
Single Desk mechanism for expediting approvals and developing real-time project
tracking tools, amongst others,” says Chandrababu Naidu.
Among the ten thrust areas
identified by the government of Andhra Pradesh for greater focus, Automobiles
& Auto Components figures prominently.
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