ANDHRA PRADESH November 2010 - IBEF
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ANDHRA PRADESH November 2010
ANDHRA PRADESH November 2010
Investment climate of a state is determined by a mix of factors
• Skilled and cost-effective labour • Procedures for entry and exit of firms
• Labour market flexibility • Industrial regulation, labour regulation, other
• Labour relations government regulations
• Availability of raw materials and natural • Certainty about rules and regulations
resources • Security, law and order situation
Resources/Inputs Regulatory framework
Investment climate
of a state Physical and social
Incentives to industry
infrastructure
• Condition of physical infrastructure such as
• Tax incentives and exemptions power, water, roads, etc.
• Investment subsidies and other incentives • Information infrastructure such as telecom, IT,
• Availability of finance at cost-effective terms etc.
• Incentives for foreign direct investment (FDI) • Social infrastructure such as educational and
• Profitability of the industry medical facilities
2
ANDHRA PRADESH November 2010
Contents
Advantage Andhra Pradesh
State economy and socio-economic profile
Infrastructure status
State policies and incentives
Business opportunities
Doing business in Andhra Pradesh
3ADVANTAGE ANDHRA PRADESH
Andhra Pradesh November 2010
Andhra Pradesh – State Profile
• Covering an area of 275,100 sq km, Andhra
Pradesh is the fourth-largest state in India after
Rajasthan, Madhya Pradesh and Maharashtra. It
falls in the Southern peninsula of India and has a
coast line of 974 km.
• The state has 23 administrative districts.
Hyderabad is the capital city.Visakhapatnam,
Vijayawada, Tirupati, Warangal, Guntur, Kakinada,
Nellore and Kurnool are the other key cities in
the state.
• Andhra Pradesh has three major rivers, viz., the
Godavari, the Krishna and the Thungabhadra.
• There are seven agro-climatic conditions and a
variety of soils to support the cultivation of wide
range of crops.
• The most commonly spoken language of the state
is Telugu. Hindi, English and Tamil are the other
languages used.
Source: Maps of India
4ADVANTAGE ANDHRA PRADESH
Andhra Pradesh November 2010
Advantage Andhra Pradesh … (1/2)
Hub for knowledge-based industries
Andhra Pradesh has emerged as a key state or the knowledge-
based industry including IT, pharmaceuticals and biotechnology.
It is also a leading agricultural state in the country. Over 70 of
the 500 top global corporations are present in the state.
Policy and fiscal incentives
The state offers a wide range of fiscal and policy incentives for
businesses under the Industrial Investment Promotion Policy,
2010-2015. Additionally, the state has well drafted sector-
specific policies.
Rich labour pool
The state has a large base of skilled labour, making it an ideal
destination for the knowledge sectors. Further, the state has
a large pool of semi-skilled and unskilled labour, especially, in
the 15 to 49 age group.
Source: Maps of India
5ADVANTAGE ANDHRA PRADESH
Andhra Pradesh November 2010
Advantage Andhra Pradesh … (2/2)
Facilitating infrastructure
The state has well-developed social, physical and industrial
infrastructure and virtual connectivity, has good power, airport, IT
and port infrastructure.
High economic growth
The GSDP of the state is growing at compound annual growth
rate of 12 per cent annually. Vast natural gas reserves found in the
Krishna–Godavari basin have opened up immense possibilities for
the state economy.
Stable political environment
The state has a stable political environment with a single-party
government. The State Government is committed towards
creating a progressive business environment.
Source: Maps of India
6ADVANTAGE ANDHRA PRADESH
Andhra Pradesh November 2010
Andhra Pradesh in figures … (1/2)
Parameter Andhra Pradesh All-states Source
Economy
GSDP as a percentage of all states‘
8.2 100.0 CMIE, as of 2007-08, current prices
GSDP
Average GSDP growth rate (%)* 12.3 11.8 CMIE, 2000-01 to 2007-08, current prices
Per capita GSDP (US$) 990.0 992.5 CMIE, as of 2007-08, current prices
Physical infrastructure
Central Electricity Authority,
Installed power capacity (MW) 13,409.4 159,398.5
as of March 2010
Cellular Operators Association of India, as of
GSM cellular subscribers (No) 33,325,765 456,586,162
June 2010
Broadband subscribers (No) 400,663 4,981,976 As of October 2008
Ministry of Road Transport & Highways,
National highway length (km) 4,537.0 70,548.0
Annual Report, 2008-09.
Major and minor ports (No) 1+13 12+187 Ministry of Shipping
Airports (No) 9 133 Industry sources
Social indicators
Literacy rate (%) 60.5 64.8 Census of India, 2001
Ministry of Health & Family Welfare, RHS
Birth rate (per 1,000 population) 18.4 22.8
Bulletin, March 2008
* In terms of Indian rupee
7ADVANTAGE ANDHRA PRADESH
Andhra Pradesh November 2010
Andhra Pradesh in figures … (2/2)
Parameter Andhra Pradesh All-states Source
Ease of doing business
Department of Industrial Policy and
FDI inflows (US$ billion) 4.8 120.2
Promotion, April 2000 to May 2010
Outstanding investments (US$ billion) 146.1 1,972.6 CMIE, as of March 2010
Industrial infrastructure
PPP projects (No) 74 515 www.pppindiadatabase.com
Functional as of August 2010,
SEZ (No) 22 121
www.sezindia.nic.in
PPP: public private partnership, SEZ: special economic zone
Parameter Andhra Pradesh Government
Policy support
Industry overall, biotechnology, Information and communication
Sectors with specific policies
technology, tourism, textile and apparel
Availability of labour Adequate skilled labour available
8ADVANTAGE ANDHRA PRADESH
Andhra Pradesh November 2010
Key industries with policy thrust and factor advantages
Industry attractiveness matrix
High
Bulk drugs and
pharmaceuticals
IT and ITeS
Textiles Biotechnology
and apparel
Agro and food
Policy thrust
processing
Medium
Low Medium High
*Factor advantage
*Factor advantages include benefits due to geographical location and availability of factors like talent pool, natural resources and capital
9ANDHRA PRADESH November 2010
Contents
Advantage Andhra Pradesh
State economy and socio-economic profile
Infrastructure status
State policies and incentives
Business opportunities
Doing business in Andhra Pradesh
10STATE ECONOMY AND SOCIO-ECONOMIC PROFILE
Andhra Pradesh November 2010
Socio-economic snapshot of Andhra Pradesh
Parameters Andhra Pradesh
Capital Hyderabad
Geographical area (sq km) 275,100
Administrative districts (No) 23
Population density (persons per sq km) 277
Total population (million) 76.2
Male population (million) 38.5
Female population (million) 37.7
Decadal population growth rate (%) 14.6
Sex ratio (females per 1,000 males) 978
Literacy rate (%) 60.5
Male (%) 70.3
Female (%) 50.4
Average life expectancy (years) 63.9
Sources: Andhra Pradesh Government (www.aponline.gov.in)
Director, Census Operations, A.P. Hyderabad
Directorate of Economics and Statistics, Hyderabad
CMIE
11STATE ECONOMY AND SOCIO-ECONOMIC PROFILE
Andhra Pradesh November 2010
Andhra Pradesh‘s GSDP
• At current prices, the Gross State Domestic Product (GSDP) was US$ 85.8 billion in 2009-2010.
• Between March 2000 and March 2010, the average annual GSDP growth was 12 per cent.
• This growth was primarily driven by the service sector and was supported by primary and secondary
sectors.
Andhra Pradesh‘s GSDP (US$ billion)
100.0
85.8
81.2 82.0
80.0 CAGR
12% 66.0
60.0 53.3
43.5 46.9
36.6
40.0 30.0 32.6
27.6
20.0
0.0
1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10
Source: CMIE
12STATE ECONOMY AND SOCIO-ECONOMIC PROFILE
Andhra Pradesh November 2010
Andhra Pradesh‘s NSDP
• At current prices the Net State Domestic Product (NSDP) of Andhra Pradesh was about US$ 76.9
billion in 2009-2010.
• The average NSDP growth rate between 1999-2000 and 2009-2010, was about 11.9 per cent.
Andhra Pradesh‘s NSDP (US$ billion)
100.0
73.7 76.9
80.0 CAGR 72.7
11.9% 58.9
60.0
47.6
39.5 42.1
40.0 29.6 33.1
25.0 27.1
20.0
0.0
1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10
Source: CMIE
13STATE ECONOMY AND SOCIO-ECONOMIC PROFILE
Andhra Pradesh November 2010
The tertiary sector has an increasing share in Andhra Pradesh‘s
economy
Percentage distribution of GSDP
CAGR
100%
• In 2009-2010, at US$ 41.9 billion, the tertiary
sector contributed 48.9 per cent to the GSDP 80%
47.4 48.9 12.3%
(at current prices). It was followed by the
primary sector, contributing 28.7 per cent (US$ 60%
16.6 billion) and the secondary sector‘s 40% 21.0 22.4
contribution of 22.4 per cent (US$ 19.3 billion). 12.8%
20%
31.6 28.7 10.9%
• During the period, secondary sector had largest 0%
growth of 12.8 per cent followed by tertiary
1999-00 2009-10
sector (12.3 per cent) and primary sector (10.9
per cent). Primary sector Secondary sector Tertiary sector
Source: CMIE
14STATE ECONOMY AND SOCIO-ECONOMIC PROFILE
Andhra Pradesh November 2010
Per capita GSDP
• The per capita GSDP of Andhra Pradesh increased almost 2.8 times from US$ 366.4 in 1999-2000 to
US$ 1,025.6 in 2009-2010.
• A robust tertiary sector has helped Andhra Pradesh increase its average per capita GSDP by over 10.8
per cent between 1999-2000 and 2009-2010.
Per capita GSDP
1,200.0
1025.6
990.0
1,000.0 990.0
CAGR
10.8% 812.9
800.0
662.7
553.1 589.4
US$
600.0
471.6
394.0 426.5
366.4
400.0
200.0
0.0
1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10
Source: CMIE
15STATE ECONOMY AND SOCIO-ECONOMIC PROFILE
Andhra Pradesh November 2010
Industries in Andhra Pradesh
• The natural resources, policy incentives and
Key industries in Andhra Pradesh
infrastructure in the state are favourably suited for
investments in major sectors such as drugs and
pharmaceuticals, biotechnology, IT and ITeS, mines and • Agro and food-based industry
minerals, textiles, leather and tourism. • Biotechnology
• Bulk drugs and pharmaceuticals
• Andhra Pradesh is one of the foremost states to have • IT and ITeS
developed sector-specific policies.
• Mines and minerals
• Forming industrial clusters and developing infrastructure • Textiles and leather
has been a key strategy of the state to attract • Tourism
investments in various industries.
• Between August 1991 and September 2009, the state has
received 6,689 proposal for large scale industries, of
which, 2,931 have been implemented attracting
investment of US$ 11.5 billion and providing
employment opportunity to 437,344 people.
• Another 2,016 proposals with investment of US$ 60.4
billion are at various stages of implementation.
16STATE ECONOMY AND SOCIO-ECONOMIC PROFILE
Andhra Pradesh November 2010
Andhra Pradesh – among the three largest food-grain producers
in the country
Annual production
• In 2008-09, total area in the state under Crop
(‗000 tonnes)
production of food grains was 7.4 million hectors
which remained stable over last three years. Sugarcane 15,322.0
Rice 14,241.0
• However, because of increased productivity, Maize 4,152.0
production of food grains increased from 19.8
Cotton 3,462.0
million tonnes in 2007-08 to 20.4 million tonnes
in 2008-09. Pulses 1,448.0
Groundnut 973.0
• Major food grains^ produced in the state are Chilly 729.0
rice, maize, pulses and jowar.
Onion 728.0
• Other major crops produced were sugarcane, Jowar 436.0
cotton, groundnut, chilly and onion. Greengram 149.0
Mesta* 2.94
• In 2007-08, Andhra Pradesh was among the three
largest producers in the country of rice, maize, Source: Department of Agriculture, Government of Andhra
groundnut and sunflower seeds. Pradesh, Socio Economic Survey 2009-2010
as of 2008-09
*A variety of Jute, in million bales
^Food grains include rice, jowar, bajra, maize, ragi, wheat,
pulses and other millets.
17STATE ECONOMY AND SOCIO-ECONOMIC PROFILE
Andhra Pradesh November 2010
Andhra Pradesh‘s exports trends
• Andhra Pradesh‘s exports increased at a compound Annual exports growth trends (%)
annual growth rate (CAGR) of about 26.6 per cent
between 2001-02 and 2007-08. 2007-08 21.3
2006-07 50.3
• The state‘s major exports products are software 2005-06 29.7
and electronic parts which contribute around 50
per cent of exports. Engineering goods, drugs and 2004-05 3.8
pharmaceuticals, leather, animal and marine 2003-04 23.5
products, and agriculture and agro-based products 2002-03 26.0
are other major export items.
2001-02 16.2
• In order to boost exports from Andhra Pradesh, 0 10 20 30 40 50 60
the State Government offers a special package of
incentives to the export oriented units (EOU). Source: Capital Markets
Export package to EOUs under the Industrial policy
• Sales tax exemption on purchase of raw materials.
• Financial assistance through Andhra Pradesh State Financial
Corporation (APSFC) at concession rates.
• Grant of 30 per cent on ground rent for participation in the
international trade fairs, subject to a maximum limit of nine sq m.
18STATE ECONOMY AND SOCIO-ECONOMIC PROFILE
Andhra Pradesh November 2010
Investments and FDI inflows
• According to the Reserve Bank of India, FDI Break up of investments by sectors as of March 2010
inflows from April 2000 to May 2010 amounted to
US$ 4.8 billion.
22.5% Manufacturing
• The state has had a healthy FDI inflow over the 23.8%
years, primarily, in sectors related to IT and ITeS, 4.1%
Mining
automotive, engineering and electronics. Electricity
16.5%
Services^
• Of the total outstanding investments of US$ 146.1
31.8% Irrigation
billion as of March 2010, Andhra Pradesh had a well 23.8%
balanced distribution by sectors with Construction
manufacturing, electricity, services, irrigation and
construction sharing project investments of about
16 per cent to 32 per cent each.
^Excluding financial services
Source: CMIE
19ANDHRA PRADESH November 2010
Contents
Advantage Andhra Pradesh
State economy and socio-economic profile
Infrastructure status
State policies and incentives
Business opportunities
Doing business in Andhra Pradesh
20INFRASTRUCTURE STATUS
Andhra Pradesh November 2010
Road network
• As on March 2009, Andhra Pradesh has 17
National Highways running through it and
covering 4,537 km.
• Roads under the State Road and Building
Department was 69,051 km.
• As on March 2009, road density per thousand
population was 0.86 km.
• As of August 2010, there were 41 public-
private partnership (PPP) projects in the
roads sector that are at various stages of
development.
Source: Maps of India
21INFRASTRUCTURE STATUS
Andhra Pradesh November 2010
Railway network … (1/2)
• Andhra Pradesh has a total railway network of
South Central Railway network
4,287.4 km, which is under the control of the South
Central Railway with Secunderabad as the Division Broad Metre Total
headquarters. gauge gauge
Secunderabad 1,311.2 0.0 1,311.2
• The state has a total of 748 railway stations. The rail Vijaywada 945.8 0.0 945.8
network comprises of 4,102.7 km of broad gauge
Guntakal 1,121.6 184.7 1,306.2
and 184.7 km of metre gauge tracks.
Guntur 617.2 0.0 617.2
• When completed, the Mass Rapid Transit Service Hyderabad 569.6 0.0 569.6
(MRTS) project is expected to carry about 1.5 Nanded 823.0 175.9 998.9
million passengers per day by 2015 and 2.2 million
passengers per day by 2025. Total 5,388.3 360.6 5,748.9
• The total cost for the MRTS project has been Sources: South Central Railways website,
http://scrailway.gov.in, AP Admin setup, Directorate of
estimated at US$ 2.6 billion. The Central Economics and Statistics website, www.apdes.ap.gov.in,
Government has already sanctioned 20 per cent of Project description, Hyderabad metro rail website,
the project cost through the viability gap funding www.hyderabadmetrorail.in
(VGF) mode.
22INFRASTRUCTURE STATUS
Andhra Pradesh November 2010
Railway network … (2/2)
• The state is the first to have a PPP Metro Rail project sanctioned by Government of India.
• The metro rail project is environmental friendly and is expected to reduce pollutants by about 3,100
tonnes per annum (TPA).
• In September 2010, construction work of the project has been awarded to Larsen & Toubro Limited
through competitive bidding process.
23INFRASTRUCTURE STATUS
Andhra Pradesh November 2010
Airports
• The state has an international airport at Hyderabad GMR-Hyderabad International Airport Limited
and domestic airports at Visakhapatnam,Tirupati, (GHIAL), Shamsabad
Rajahmundry,Warangal,Vijayawada, Donakonda,
Started operations in May 2008.
Kadapa and Puttaparthy.
Constructed by the consortium of:
• GMR group
• Hyderabad is connected to several key international • Malaysia Airport Holding Berhad (MAHB)
destinations such as Amsterdam, Bangkok, Chicago, • Government of Andhra Pradesh
Frankfurt, Dubai, Singapore, Sharjah, London and • Airports Authority of India
Kuala Lumpur, besides all major destinations across Single terminal, expandable structure
India. Final capacity of 40 million passengers per year and
one million tonne of cargo.
Total built-up area of 900,000 sq m.
• The Rajiv Gandhi International Airport near
Shamshabad (about 27 km from Hyderabad) is a Lufthansa Technik to set up a maintenance, repair
newly completed airport. It has replaced the former and overhaul (MRO) facility at the airport.
international airport of the city at Begumpet. A new flight academy to be established at the
airport.
• The total cost for this project was US$ 560 million, Source: GHIAL website, www.hyderabad.aero
it has been built on an area of 5,449 acres.
24INFRASTRUCTURE STATUS
Andhra Pradesh November 2010
Ports
• Andhra Pradesh has the second-highest cargo-handling port after Gujarat.
• The Visakhapatnam port ranks amongst the top three of the 12 major ports in the country. In 2009-2010,
it had a port traffic of 65.5 million tonnes which accounted for 11.7 per cent of total port traffic at all
major ports.
• 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.
• Other than Visakhapatnam, the state has 13 intermediate and minor ports.
• In 2008, the minor ports at Andhra Pradesh handled about nine per cent of the total traffic at all minor
ports across the country.
Visakhapatnam Port Traffic (million tonnes) 65.5
70 64.5 63.9
60 56 56.3
48 50
50 45 44 46
40
40 34 36 36
33
30
30 26
22 23
20
10
0
1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010^
^Year ended in March 2010
Source: Visakhapatnam port
25INFRASTRUCTURE STATUS
Andhra Pradesh November 2010
Telecom infrastructure
• As of December 2009, Andhra Pradesh had 4,166 • The State Government has appointed an agency
telephone exchanges and 2.5 million wire line to provide reliable communications backbone,
telephone connections. which will provide gigabit ethernet connectivity
to all government departments and 40,000
• The number of public call offices as of March 2009 offices across the state.
was 200,291.
• It would connect the state secretariat to district
headquarters, mandals and villages, bringing the
• There are about 41.4 million cellular subscribers information superhighway to the doorstep of
(GSM and CDMA) and 400,000 broadband the common man in rural areas.
connections.
• The broadband network being implemented
• The state has approximately 44,000 km of fibre- with private participation would connect the
optic cable network with public and private sector state headquarters with 10 gigabit per second
connectivity. (gbps) to each district headquarter, one gbps to
each of the 1,128 mandal headquarters and 100
• Reliance Communications has created infrastructure megabit per second to each of the villages.
for providing the required bandwidth for basic
telecom services and other high-end services by • As of January, 2010, there were 16,146 post
laying a fibre-optic cable backbone of 3,000 km offices in the state.
throughout the state.
Sources: Chief General Manager, Telecom, Andhra Pradesh, Department of Telecommunication, annual report 2009-2010
26INFRASTRUCTURE STATUS
Andhra Pradesh November 2010
Power … (1/2)
• As of March 2010, Andhra Pradesh had a total Installed power capacity (MW)
installed power generation capacity of 13,409.4 13,409.4
14,000.0
MW, which comprised 7,688.5 MW under state 11,809.4 11,483.6 11,866.8 11,639.1
utilities, 3,129.3 MW under central utilities and 12,000.0
2,591.6 MW under the private sector. 10,000.0
8,000.0
• Coal- and gas-based thermal power plants with 6,000.0
installed capacity of 6,260 MW and 2,580.4 and
hydropower plants with capacity of 3,617.5 MW 4,000.0
were major sources of electric power in the 2,000.0
state. 0.0
2005-06 2006-07 2007-08 2008-09 2009-10
• The entire capacity of gas-based power plants is
contributed by the private sector.
Source: Central Electricity Authority
• Per capita consumption of electricity was 746
units in 2008-09.
27INFRASTRUCTURE STATUS
Andhra Pradesh November 2010
Power … (2/2)
• The integrated Andhra Pradesh State Electricity Board (APSEB) was restructured in 1999 to form the
following companies:
Segment Company name
Power generation Andhra Pradesh Power Generation Corporation Limited (AP Genco)
Power transmission Transmission Corporation of Andhra Pradesh Limited (AP Transco)
Power distribution Central Power Distribution company of Andhra Pradesh Limited (APCPDCL), Hyderabad
Southern Power Distribution Company of Andhra Pradesh Limited (APSPDCL), Tirupati
Eastern Power Distribution Company of Andhra Pradesh Limited (APEPDCL), Visakhapatnam
Northern Power Distribution Company of Andhra Pradesh Limited (APNPDCL), Warangal
AP Genco‘s hydro-power plants AP Genco‘s thermal power plants
28INFRASTRUCTURE STATUS
Andhra Pradesh November 2010
Urban infrastructure … (1/2)
Sewerage system and solid- Per capita water supply across key cities
Water supply
waste management system
• The average per capita • Solid waste collection
supply of water in major efficiency is very high
cities is 106 lpcd* across the cities of
Andhra Pradesh and
• A coverage of 85 to 90
varies from 85 to 100 per
per cent in the core city
cent, on an average, for
areas.
all the cities
• Operation and
• Area coverage of the
maintenance costs being
sewerage system in the
recovered from water
major cities varies from
tariffs is high, at 85 per
10 per cent to 45 per
cent in Hyderabad.
cent
Current per capita Desired Level
supply (litres/day)
Source: Commissionerate of Industries, Andhra Pradesh, 2006
* litres per capita per day
29INFRASTRUCTURE STATUS
Andhra Pradesh November 2010
Urban infrastructure … (2/2)
• Under the Jawaharlal Nehru National Urban Sewerage treatment infrastructure (%)
Renewal Mission (JNNURM), 50 projects costing
US$1,162.1 million have been sanctioned for 50 45
Hyderabad,Visakhapatnam,Vijayawada and 40
40
Tirupati.
30
• Some of the key areas of development are 23
roads/flyovers, water supply, storm water 20
drainage, old city drains, solid-waste 10 10.5
10
management and mass rapid transport system.
0
• Projects of value US$ 216.3 million have been Hyderabad Vijaywada Vishakapatnam
completed in 2005 and 2007. In 2007-08, one Area Coverage (%) Treated (%)
project of US$ 150.8 million have been
completed. These projects were located in
Hyderabad and Vishakhapatnam and related to Visakhapatnam‘s urban Infrastructure snapshot
roads, water supply, drains/storm water drains
and sewerage. • Visakhapatnam has a high per capita road length of 1.03 km.
• Percentage of pucca roads in the cities varies from 70 per
• In 2009-2010, the Central Government has cent to 95 per cent.
released US$ 52.5 million for 22 projects.
• Percentage coverage of storm water drains varies from 30
per cent to 50 per cent.
Source: JNNURM, Ministry of Urban Development, www.urbanindia.nic.in
30INFRASTRUCTURE STATUS
Andhra Pradesh November 2010
Key public private partnership projects
Project cost
Project name Sector PPP type Stage
(US$ million)
Vodarevu Nizampatnam ports and port-based
Ports BOOT 3,652.2 Construction
corridor development
Gangavaram Port Ports BOT-Toll 358.6 Construction
Cuddapah Mydukur Kurnool road Roads BOT-Toll 344.6 Construction
Integrated solid waste management for Hyderabad Urban development DBFOT 195.0 Construction
Four-laning of Hyderabad Karimnagar Ramagundam
Roads BOT-Toll 295.2 Bidding
road
Narketpally Addanki Medaramitla road Roads BOT-Toll 260.2 Bidding
Bus terminal and commercial development at
Urban development Lease 54.3 Bidding
Musheerabad
Health spa and resort Tourism Lease 13.0 Bidding
Four-laning of Khammam Tallada Devarapally road Roads BOT-Toll 143.5 EOI
Four-laning of Perecherla Thokapalli road Roads BOT-Toll 113.5 EOI
Four-laning of Warangal Khammam road Roads BOT-Toll 103.5 EOI
Source: www.pppindiadatabase.com
EOI-Expression of interest, BOOT: build-own-operate-transfer, BOT: build-operate-transfer, DBFOT: design-build-finance-operate-transfer
31INFRASTRUCTURE STATUS
Andhra Pradesh November 2010
Education sector … (1/2)
• The state had a literacy rate of 60.5 per cent in 2001 as against 44.1 per cent in 1991.
• In 2001, the male literacy figure stood at 70.3 per cent, while female literacy was at 50.4 per cent.
• In 2008-09, total of 13.7 million students were enrolled in 98,027 schools. There were 65,609 primary
schools, 14,942 upper primary schools, 17,376 high schools and 100 higher secondary schools. The total
number of teachers was 449,145.
• The state adds more than 100,000 engineering graduates, 12,000 management graduates and 350,000
English-speaking graduates every year.
• The Hyderabad University and the Osmania University are among the leading universities of the country.
32INFRASTRUCTURE STATUS
Andhra Pradesh November 2010
Education sector … (2/2)
• At the intermediate college level, courses are Colleges by courses, 2009-2010
available in the science, arts and commerce streams. Course Number of
colleges
• Vocational courses are offered in the fields of
agriculture, engineering and technology, home Engineering 656
science, paramedical, business and commerce, and Master of Computer Application (MCA) 703
humanities.
Master of Business Administration (MBA) 881
• In 2009-2010, there were 4,611 junior colleges with Bachelor of Pharmacy 278
a total enrolment of 0.8 million students. Polytechnics 213
• The Technical Education Department of Andhra Source: Socio Economic Survey 2009-2010, Government of Andhra
Pradesh
Pradesh supports 656 engineering colleges.
Life-sciences institutes
Degree colleges, 2009-2010
• Centre for Cellular and Molecular Biology
Degree colleges • Centre for DNA Fingerprinting and Diagnostics
• Government colleges: 249 • Indian Institute of Chemical Technology
• International Crop Research Institute for Arid and Semi-
• Aided colleges: 179
Arid Tropics (ICRISAT)
• Un-aided colleges: 1,459^ • Directorate of Rice Research, National Academy of
Agricultural Research Management
• Under-graduate and post-graduate colleges: 5,236^
• National Institute of Nutrition
^As of 2008-09 • Indian Council of Agricultural Research Centres.
Source: Socio Economic Survey 2009-2010
33INFRASTRUCTURE STATUS
Andhra Pradesh November 2010
Health infrastructure
• As of March 2008, Andhra Pradesh had 1,570
Leading hospitals in Hyderabad
primary healthcare centres (4-6 beds in each),
with 2,214 doctors. Apollo Hospital
Yashoda Super Specialty Hospitals
• There were 167 community healthcare centre Care Hospital
(30 beds in each) with 235 specialists. There are
Wockhardt Kamineni Hospital
12,522 sub-centres in the state.
Nizams Institute of Medical Sciences
• Hyderabad has approximately 60 hospitals that MNJ institute of Oncology and Regional Cancer Centre
classify as authorised centres for providing Indo-American Cancer Institute and Research Hospital
medical services.
Global Hospital
Medwin Hospital
Health indicators
Medicity Hospital
Birth rate* 18.4
L V Prasad Eye Institute
Death rate* 7.5
Krishna Institute of Medical Sciences
Infant mortality rate** 52
*Per thousand persons
** Per thousand live births
Source: Ministry of Health & Family Welfare
As of March 2008
34INFRASTRUCTURE STATUS
Andhra Pradesh November 2010
Cultural infrastructure
• There are several sports complexes in Hyderabad,
Major stadiums and sports complexes in Hyderabad
Visakhapatnam,Tirupati and other cities. Swimming
and tennis are the major sports although, other Swarnandhra Pradesh Sports Complex
games are also popular. G. M. C. Balayogi Athletic Stadium
Gachibowli Indoor Stadium
• The Boulders Hill in Hyderabad, The Army Golf
Course in Secunderabad and the East Point Golf Fateh Maidan Sports Complex
Club in Visakhapatanam are well known golf The Lal Bahadur Stadium
courses in the state. The Lal Bahadur Stadium
Aquatics Complex
• The Tirupati temple in Southern Andhra Pradesh
makes the state one of the leading religious Kotla Vijay Bhaskar Reddy Indoor Stadium
tourism spots in the country. SAAP Tennis Complex, Fateh Maidan
Shooting Range, Hyderabad Central University
• AP Tourism promoted convention centres in
Hyderabad state include Taramati Baradari, Rajiv Gandhi International Cricket Stadium
Hyderabad International Convention Centre,
Shilpa Kala Vedika, HITEX, Marriott Convention
Centre, Ramoji Film City, Katriya De Royal –
Convention Facilities.
35INFRASTRUCTURE STATUS
Andhra Pradesh November 2010
Industrial infrastructure development … (1/2)
• On the industrial infrastructure front, the state has Number of STPI registered in India and
taken a number of developmental initiatives to Andhra Pradesh (No)
achieve consistent economic growth. 1400
1164
1200
1052
• The Government has initiated a set of prestigious 1000
projects including those in industrial infrastructure 845
800
for the specific sectors, through the Andhra 616
Pradesh Industrial Infrastructure Corporation 600
Limited (APIIC). 400
173 174 176 69
200
• As of 2008-09, there were 69 Software Technology 0
Parks of India (STPI) in the state. 2005-06 2006-07 2007-08 2008-09
All India AP
• APIIC has already helped set up over 300 industrial
estates and specialised parks including the L&T Sources: IT parks, IT SEZs, IT and Communications Department
Infocity, ICICI Knowledge Park, SP Bio-tech Park, website, http://apit.ap.gov.in, Export Performance of IT/ITES
Industry for the year 2008-09- presentation, STPI website,
Marine Bio-tech Park, Agri Bio-tech Park, special www.hyd.stpi.in
economic zone (SEZ), Pharma City, Hardware Park,
HITEC city, leather parks, food processing park and
agri-export zones.
• As of August 2010, 1,303 units were registered
with the STPI, Hyderabad.
36INFRASTRUCTURE STATUS
Andhra Pradesh November 2010
Industrial infrastructure development … (2/2)
• Integrated Infrastructure Development Centres
Genome Valley
(IIDC) to establish industries in rural/backward
areas and provide agriculture–industry link. Genome Valley is India‘s first state-of-the-art life
sciences cluster, spanning 600 sq km in Hyderabad.
• Centres are located in Nandyal (Kurnool),Tada Provides access to world-class infrastructure to
(Nellore), Keelapattu and Madikonda (Warangal), domestic and international companies.
Gajularamaram (Ranga Reddy) and Surampally Comprises dedicated parks such as ICICI Knowledge
(Vijaywada). Park and Shapoorji Pallonji Biotech Park developed on
a public-private partnership (PPP) model.
• The Central Government has given formal
approval to 106 SEZs, in-principle approval to four
SEZs and 74 notified SEZs. Larsen & Toubro (L&T) Infocity
Developed jointly by APIIC and L&T.
• APIIC has developed an Export Promotion
Spread across 158 acres at Madhapur with state-of-the-
Industrial Park (EPIP), spread over 204 acres in art infrastructure.
Medak, at an estimated cost of US$ 35.36 million.
Built in three phases with total built-up area of 1.8
million sq ft on 20.7 acres of land. Employs more than
• Critical Infrastructure Balancing Scheme (CIBS) to 12,500 persons.
fund Industrial associations/service
societies/NGOs for development of critical
infrastructure.
Sources: Commissionorate of Industries, Andhra Pradesh, 2006, SEZ India website, www.sezindia.nic.in, Andhra Pradesh Government budget website,
http://budget.ap.gov.in
37INFRASTRUCTURE STATUS
Andhra Pradesh November 2010
SEZs and industrial clusters
Upcoming SEZs Industrial clusters in AP
ANDHRA PRADESH
Industrial Clusters
MAHARASHTRA
MADHYA PRADESH
Sircilla
Vizianagaram
Warangal
Rangareddy Khammam
Vishakapatnam
Hyderabad
Bheemavaram
Nalagunda
Guntur Vijaywada
KARNATAKA
Karnool Ongole
Kadapa
Nellore Automobiles & Engineering
Hindupur IT / ITES
Pharma / Biotech
Chittoor Mineral
Kuppam Textile & Apparel
TAMIL NADU Food Processing
N
38INFRASTRUCTURE STATUS
Andhra Pradesh November 2010
Infrastructure investments
• Infrastructure investments in Andhra Pradesh Investments
were over US$ 33.4 billion, as of March 2010. Infrastructure type
(US$ million)
Power* 18,864.7
• Over 56 per cent of investments in infrastructure
were in the area of power generation and Roads 5,122.8
distribution.
Oil and gas 753.1
• About 15.3 per cent of the investments were in Railways 4,571.5
the road sector, while another 14 per cent were
Airport 1,162.8
in the railways sector. Other sectors such as
shipping (8.8 per cent), airport (3.5 per cent) and Shipping 2,927.6
oil and gas (2.3 per cent) also attracted
investments. Total 33,402.5
*Generation and distribution
Source: CMIE
As of March 2010
39INFRASTRUCTURE STATUS
Andhra Pradesh November 2010
Existing mega parks
Location (district) Name of the park
Chittoor Food processing park
Medak Export promotion industrial park
Ranga Reddy Agri-biotech park
Apparel park
Biotech park
Financial district
Gems and jewellery park
Hardware park
Hi-Tech city
Hitex exhibition centre
ICICI knowledge park
Industrial estate for lady entrepreneurs
International convention centre
Mind Space IT parks
Visakhapatnam AP SEZ
JN Pharma City park
Visakhapatnam industrial water supply project
Visakhapatnam SEZ
40INFRASTRUCTURE STATUS
Andhra Pradesh November 2010
Upcoming specialised parks
Location (district) Name of the park Location (district) Name of the park
Ranga Reddy Pharma cluster Visakhapatnam Brandix textile city
Business district and trade towers IT park
Rajiv Gandhi nanotech park Apparel export park
Semindia Fab city Marine biotech park
Hardware park Nalgonda Handloom textile park
Aero park Medak Textile park
Auto park Anantpur Textile park
IT parks (three) Guntur Food processing park
Khammam Food processing park
Sircilla, Karimanagar Textile park Mahabubnagar Textile park
Vijayawada, Krishna Auto component Visakhapatnam, Petroleum. Chemicals and
Vizianagaram, Petrochemicals Investment
East Godavari Region (PCPIR)
IT park Nellore Food processing park
41INFRASTRUCTURE STATUS
Andhra Pradesh November 2010
Sector-specific industrial parks … (1/2)
Industry Name of the park, location Brief description
Life- Agri-science park The State Government and ICRISAT have jointly set up an agri-science park
sciences at the ICRISAT campus to support the growth of agri-based biotech industry
in the state.
Jawaharlal Nehru Pharma City JNPC project is being developed at Parwada, Visakhapatnam, at an estimated
(JNPC) cost of US$ 73.17 million through a PPP model between the State
Government and Ramky Pharma City (India) Limited. Infrastructure includes
water supply, hazardous waste management facilities, effluent treatment
plants, power and street lighting.
Designed by JTC - Jurong Corporation of Singapore, it has a saleable area of
1,420 acres and the remaining 700 acres would have common facilities and
utilities with green areas and open spaces in the park. About 600 acres have
been earmarked for setting up a Pharma SEZ.
42INFRASTRUCTURE STATUS
Andhra Pradesh November 2010
Sector-specific industrial parks … (2/2)
Industry Name of the park, location Brief description
Apparel and Apparel Export Park The park is spread over 172 acres in Gundlapochampally and has units
textile exporting to the US, the UK and other countries and for stores such as Wal-
Mart and JC Penny.
Textile Park, Sircilla The park has been developed on 60 acres for providing facilities such as
training centres, business resource centres, textile processing units, testing
labs, CAD centres, common effluent treatment plants, has a 33/11 kV
substation with uninterrupted power supply, assured water supply and single-
window clearance for all approvals.
Textile Park, Pashamylaram Centre Government approved project under the Textile Centre
Infrastructure Development Scheme. So far, 50 acres of land have been
developed.
Brandix India Apparel City, Set up in an area of 1,000 acres at a project cost of US$ 609.8 million by
Visakhapatnam Brandix Lanka Limited. Commercial operations started in January 2007.
Apparel Export Park, Project developed on 146 acres of land for accelerated industry growth
Visakhapatnam there.
Textile Park, Pamidi Proposed to be developed as a natural garment cluster with basic
infrastructure facilities and skilled manpower.
Handloom Apparel Park, The Government has identified 50 acres on National Highway-9 near the
Pochampally Pochampally Silk City and has approved the project at an outlay of US$
810,000.
43INFRASTRUCTURE STATUS
Andhra Pradesh November 2010
Virtual infrastructure
E-seva Rajiv Internet Village AP online E-procurement
• Presence of e-governance • Launched by the State • E-governance: gateway for the • Automates procurement and
initiative, which offers a Government in State Government, offers purchase procedures—
wide spectrum of citizen- August 2004, its multiple services through a spanning from demand
friendly services objective is to bring single window to citizens aggregation to procurement
government and fulfilment—of the State
• One-stop shop for services • Developed and launched by the
services/benefits Government. Presently, the
of various state and central Government in partnership
closer to people living portal is servicing 29
government departments in with Tata Consultancy Services
in rural areas. government departments, 39
an efficient, reliable,
• Facilitates online submission of public sector undertakings,
transparent and integrated • Further, it aims to
forms including registrations, four universities and 127
manner provide computer
licences, permits, certificates urban local bodies.
literacy to at least one
• Facilitates online and representations to
person in each family • Over 61,000 tenders with
transaction processing of different government
in rural areas work amounting to US$ 26.3
payments, issue certificates, departments.
billion have been handled
permits, licenses and many • Provides high
• Facilitates online payments for through the portal.
other services bandwidth
utilities, taxes, fee, deposits and
connectivity in rural
stamp duties.
areas
Source: "Mauritius pact with State Government", Eprocurement website, www.eprocurement.gov.in
44ANDHRA PRADESH November 2010
Contents
Advantage Andhra Pradesh
State economy and socio-economic profile
Infrastructure status
State policies and incentives
Business opportunities
Doing business in Andhra Pradesh
45STATE POLICIES AND INCENTIVES
Andhra Pradesh November 2010
Sector-specific policies … (1/12)
Andhra Pradesh Industrial Investment Promotion Policy (IIPP), 2010-2015
Vision: 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 people and industry, that creates increasing employment opportunities, and raises wage incomes to
higher levels through skill upgradtion so as to improve the quality of life of citizen of the state.
Objectives:
• Promote Andhra Pradesh as ‗the best‘ investment destination.
• Increase growth of manufacturing sector from 12 per cent to 17 per cent per annum.
• Creation of additional employment of 500,000 persons per year (200,000 direct employment and 300,000 indirect employment).
• Attracting US$ 3.16 billion of investment in the manufacturing sector, every year .
• Provide special focus on micro-, small- and medium –scale enterprise (MSME) with emphasis on food processing.
• To enhance the knowledge and skills of human resources for better productivity and global competitiveness.
• To create enabling environment for ensuring maximum value addition to the abundantly available resources.
• To build conducive ecosystem for sustained growth of industry.
46STATE POLICIES AND INCENTIVES
Andhra Pradesh November 2010
Sector-specific policies … (2/12)
IIPP, 2010-2015 (continued)
Incentives:
For micro- and small- enterprises (MSE):
• Subsidy of 15 per cent of fixed capital investment ,subject to a maximum of US$ 42,194.
• Reimbursement of 100 per cent of value added tax (VAT) / central sales tax (CST) or state goods and service tax (SGST) for a
period of five years for micro enterprises.
• Reimbursement of 50 per cent of VAT, CST or SGST for a period of five years for small enterprises.
• Interest subsidy on term loan for MSEs in excess of three per cent per annum subject to a maximum of nine per cent per
annum for a period of five years.
• Providing tender forms free of cost. Exemption from paying earnest money deposit (EMD) and security deposit (SD).
• Price preference to the extent of 10 per cent, i.e., where the bid by micro and small enterprises are within 10 per cent of
lowest bid, the local micro and small enterprises will be offered reasonable part of the order at lowest bid value.
• Reimbursement of 50 per cent of cost incurred in quality certification / patent registration, to an upper limit of US$ 4,219.
Incentive for medium and large industries:
• Reimbursement of 25 per cent of VAT, CST or SGST for a period of five years for medium and large enterprises.
• All projects with investments more than US$ 52.7 million or providing employment for more than 2,000 people, will be
classified as mega projects and will be considered for tailor-made benefits, based on factors such as technology induction,
employment opportunity, location of units, etc.
47STATE POLICIES AND INCENTIVES
Andhra Pradesh November 2010
Sector-specific policies … (3/12)
IIPP, 2010-2015 (continued)
Incentives:
For enterprises managed by women:
Enterprises started by women entrepreneurs as sole proprietary concerns/partnership/private limited companies or
cooperatives which have 100 per cent women participation in the enterprise will be eligible for the following benefits:
• All the benefits as per IIIP, 2010-2015.
• Additional five per cent (i.e., total of 20 per cent) subsidy on investment, limited to US$ 10,548.
• Reservation of 10 per cent of land in the industrial estate / parks developed by APIIC.
For enterprises managed by entrepreneurs belonging to scheduled cast (SC) and scheduled tribe (ST):
Industrial units which have been established under sole proprietorship of SC/ST entrepreneurs or those partnership or
private limited companies with 100 per cent share belonging to SC/ST entrepreneurs will be eligible for following
benefits:
• Reimbursement of 100 per cent of stamp duty and transfer duty paid by the industry on purchase of land meant for industrial
use.
• Reimbursement of 100 per cent of stamp duty for lease of land/shed/building and also for mortgages and hypothecations.
• Reimbursement of 25 per cent of land conversion charges for the industrial use, limited to US$ 21,097.
48STATE POLICIES AND INCENTIVES
Andhra Pradesh November 2010
Sector-specific policies … (4/12)
IIPP, 2010-2015 (continued)
Incentives:
For enterprises managed by entrepreneurs belonging to scheduled cast (SC) and scheduled tribe (ST) (continued):
• Seed capital assistance to first generation entrepreneurs to set up micro enterprises in form of 10 per cent subsidy on cost of
machineries , which will be deducted from the eligible investment subsidy.
• Interest subsidy on term loan for fixed capital investments by micro and small enterprises in excess of three per cent per annum
subject to a maximum of nine per cent per annum for a period of five years.
• Preferential allotment of land in the industrial estates developed by APIIC.
• Subsidy of 35 per cent on fixed capital investment, additional five per cent subsidy for SC/ST women and additional five per cent
investment subsidy for the units set up in the scheduled areas by ST entrepreneurs up to a maximum limit of US$ 105,485.
• 33.33 per cent subsidy on land cost at industrial estates and industrial development areas, limited to US$ 21,097.
• Cost of power will be reimbursed at US$ 2.1 cent per unit for five years as per guideline.
• Micro, small, medium and large enterprises will be reimbursement VA, CST or SGST to the extent of 100 per cent, 50 per cent
and 25 per cent respectively.
• Subsidy of eight per cent on capital expenditure on equipments for technology upgrade, limited to US$ 105,485 (for MSMEs)
• Reimbursement of 50 per cent of expenses incurred for quality certification/patent registration up to a limit of US$ 4,219 for
MSMEs.
49STATE POLICIES AND INCENTIVES
Andhra Pradesh November 2010
Sector-specific policies … (5/12)
Information and Communications Technology (ICT) Policy, 2010-2015
Objectives: To make Andhra Pradesh as one of the fore runners in IT sector in the country. The objective will be achieved
through the following:
• Provision of congenial, industry-friendly and proactive climate for IT companies to locate, grow and sustain their operations in
most competitive and hassle-free environment.
• Creation of employment opportunities to the educated youth of all sections of the society across all regions.
• Achieving higher levels of exports resulting in enhanced productivity, and augmentation of GSDP.
• To spread IT to nook & corner of the state.
• Leverage IT as a tool for the socio-economic development of the state.
Key targets:
• Achieve exports of US$15 billion by the IT sector in the state.
• Achieve annual growth rate of 17 per cent for the IT sector in the state.
• Generate 125,000 direct employment.
• Generate 500,000 indirect employment.
• Computer training for e-literacy.
• Special focus areas of the policy are start up companies, small and medium enterprises (SMEs), IT product/research and
development companies, SC/ST entrepreneurs, women entrepreneurs, animation, gaming and digital entertainment, engineering
services, tier-II locations (Vijayawada, Tirupati, Kakinada and Warangal), tier-III locations (other than Hyderabad and tier-II
locations) , promotion of IT incubation facilities at engineering colleges, corporate social responsibility, promotion of women‘s
participation in IT sector, electronic hardware (non-hazardous) and eGovernance.
50STATE POLICIES AND INCENTIVES
Andhra Pradesh November 2010
Sector-specific policies … (6/12)
ICT Policy, 2010-2015 (continued)
Incentives:
• IT/ITeS units will be exempt from the purview of the Andhra Pradesh Pollution Control Act, except with respect to power
generation sets.
• IT/ITeS units and companies will be exempt from the statutory power cuts.
• IT industry will be exempt from inspections under the following, barring inspections arising out of specific complaints:
• The Factories Act 1948.
• The Maternity Benefit Act 1961.
• The AP Shops & Establishments Act 1988.
• The Contract Labour (Regulation & Abolition) Act 1970.
• The Payment of Wages Act 1936.
• The Minimum Wages Act 1948.
• The Employment Exchanges (Compulsory Notification of Vacancies) Act 1959.
• Three shift operations with women working in the night for IT/ITeS units or companies will be granted.
• IT/ITeS units or companies and non-hazardous hardware manufacturing industry are declared as essential service under AP
Essential Services Maintenance Act.
51STATE POLICIES AND INCENTIVES
Andhra Pradesh November 2010
Sector-specific policies … (7/12)
ICT Policy, 2010-2015 (continued)
Special incentives for special focus areas:
• Reimbursement of stamp duty, transfer duty and registration fee.
• Recruitment assistance.
• Subsidy on lease rentals.
• Subsidy on cost of power.
• Subsidy on cost incurred in participating in exhibitions.
• Subsidy on cost incurred in filing for patents and obtaining quality certifications.
• Subsidy on lease rentals.
• Subsidy on interest charges.
• Rebate on land cost.
52STATE POLICIES AND INCENTIVES
Andhra Pradesh November 2010
Sector-specific policies … (8/12)
Textile and Apparel Policy, 2005-10
Objectives: To generate employment opportunities for an additional 1.5 million persons in the sector by 2010, to increase exports
to US$ five billion to US$ six billion by 2010, to set up apparel exports and textile parks in clusters with state-of-the-art
technology to attract investors, promote exports and generate employment opportunities, to introduce the system of PPP and
special incentives to high value and high employment-generation projects.
Incentives:
• All the incentives provided in the Industrial Investment and Promotion Policy are automatically applicable to textiles and apparel
units.
Fresh Food Policy, 2005
Incentives:
• Reimbursement of cost of power to be extended for a period of five years from April 2005.
• Food processing units that commenced commercial production after November 14, 2003, are eligible for reimbursement of
power costs.
53STATE POLICIES AND INCENTIVES
Andhra Pradesh November 2010
Sector-specific policies … (9/12)
Tourism Policy, 2006
Objectives: To create a unique selling proposition and a brand image for the state, to ensure deserved positioning on the tourism
map of India and the world, to create and differentiate tourism products across segments such as eco-tourism, pilgrimage, heritage,
business, sports, spiritual, health, leisure and rural tourist, to provide incentives and concessions to tourism projects to be set up
in special tourism areas with assurance on features such as sustainable employment generation, promotion of rural tourism and
commercially viable projects, to develop the sector through public private partnerships (PPP), to adopt a single-window clearance
system.
Incentives and concessions:
• Concession on allotment of land on a long lease of 33 years. For mega projects, the lease period to exceed 33 years and lease
rent shall be 10 per cent of market value, subject to review every five years.
• Investment subsidy of 20 per cent of project cost and 15 per cent for up-gradation of existing hotels, limited to US$ 48,000.
• 100 per cent reimbursement of stamp duty and transfer fee on purchase of land or lease of land meant for the project.
• Reimbursement of 25 per cent of value-added tax and luxury tax paid for a period of five years.
• Reimbursement of 25 per cent of entertainment tax for multiplexes in theme parks and urban entertainment centres for a
period of five years, limited to 100 per cent of the project cost for projects more than US$ 1.219 million and located in notified
tourism areas or special tourism areas.
• Floor area index relaxation, and automatic conversion/exemption from land-use zoning regulations.
• Market development assistance scheme for promotional activities
54STATE POLICIES AND INCENTIVES
Andhra Pradesh November 2010
Sector-specific policies … (10/12)
Electronic Service Delivery Policy, 2003
Aim: To evolve a comprehensive and generic policy that permits rapid growth of electronic delivery of services under e-
governance projects such as e-Seva, APonline, e-Procurement, CARD and i-Community.
Key provisions and incentives:
• To adopt new and more efficient, cost-effective delivery channels with suitable interfaces for backward integration.
• The Government to establish a standards-based e-government Gateway to enable the various service providers to interact with
the backend databases and applications of various government departments and agencies and provide cost-effective services to
the citizens and businesses.
• To avoid the problem of limited suitability of all the delivery points and channels for delivering all the services, those services
involving checking of documents, issue of certificates, licenses needing authentication, etc., to be done at departmental outlets
and/or e-Seva centres.
• For sustaining various citizen-service projects and initiatives, it is necessary that the concerned partner, vendor or entrepreneur
is compensated on a ‗per transaction‘ basis. The transaction cost could be met either by the government department/agency or
by the customer, depending on the nature of the service.
• The following principles are to be adopted in this regard:
• No user charges to be collected from the citizen in respect of payment for utility bills and taxes, irrespective of the delivery
channel. The concerned department or agency will pay the service charges to the service providers.
• In respect of other services such as information services, interactive services like online filing of forms, form submission and
issue of certificates, a charge of US 11 cents to US 33 cents to be payable by the customer to the operator of the Service
Delivery Point (SDP).
• The revenue sharing between the SDP, service providers and the government department to be mutually agreed between the
various parties involved and specified in a Service Level Agreement (SLA).
55STATE POLICIES AND INCENTIVES
Andhra Pradesh November 2010
Sector-specific policies … (11/12)
Biotechnology Policy, 2001
Objectives: To undertake a detailed inventory evaluation of the bio-resources in the state, to encourage research and development
(R&D), to develop high-quality infrastructure and provide special incentives to biotech industry.
• To create an enabling environment and simplify procedures, to facilitate the flow of venture capital funds and address issues such
as Intellectual Property Rights (IPR).
• The thrust areas identified include diagnostics, therapeutics, pharmaco-genomics, bioinformatics, agriculture biotechnology,
industrial biotechnology, inputs to the industry (hardware suppliers – instrumentation and chemicals), marine biotechnology,
forest and environment-focussed biotechnology, contract research in all areas of biotechnology and related areas.
• The strategy adopted involves encouraging R&D, developing infrastructure, providing incentives, land and grants for training
institutes and housing, mega projects, developing adequate human resources, creating an enabling environment, funding biotech
activities, and protecting IPR.
• The Andhra Pradesh Government is working on a new biotechnology policy.
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