AP State Profile-Executive Summary

Executive Summary
AP Industrial Profile
ANDHRA PRADESH AT A GLANCE

Physical features
Area
No. of districts
2,75,100 Sq. kms

23
Revenue Divisions
81
Mandals
1,128
Gram Panchayats
21,900
Inhabited
villages(Census
2001)
Boundaries
26,613
Major rivers
Demographic
particulars.
Population
(2001 census)
Male population
East - Bay of Bengal

West Karnataka
state
North- Orissa,
Maharashtra& M.P.
South Tamil Nadu
Godavari, Krishna,
and Pennar,
7,62,10,007
3,85,27,413
Female population
3,76,82,594
Rural population
554.01 lakhs
Urban Population
208.09 lakhs
Scheduled Castes
123.39 lakhs
Scheduled Tribes
50.24 lakhs
Workers total
34.865 millions
Workers
agricultural
21.722 millions(62.3
%)
Workers non agrl

Languages Spoken
Railway track length

No. of Railway
stations
No.national
highways(12)
Airways:
International
Domestic Airports
Sea Ports:
Agricultural Resources
Power: Installed
capacity
Units generated
(MU)
Food grains
Cash crops
Mineral resources
Major minerals:
States share in
deposits of major
minerals:
Industrial
Industrial
1
13.143 millions( 37.7

%)
Telugu,,Urdu.Hindi
and English
4985 kms
662
4648 kms.
Hyderabad,
Shamshabad
Hyderabad,
Visakhapatnam,
Vijayawada and
Tirupati etc;
Visakhapatnam,
Kakinada,
Krishnapatnam and
Machilipatnam,
Gangavaram
chillies, cotton,
tobacco, coconut,
cashew, groundnut,
sugarcane
Barytes
97%
Sand
62%
Silver
40%
Quartz
40%
* Mica Crude
47%
272
Infrastructure
Industry at a glance
( March 2009)
Large scale sector
State Economy
2007-08
Total Net State
estates/development
areas
No. of micro, small
enterprises
Investment in crores
Employment no.
No. of enterprises
( as on 31.3.09)
Investment Rs in
crores
Employment ( nos)
Gross State
Domestic Product
GSDP at 2006-07)
prices
(Rs. Crores)
Gross State
Domestic Product
GSDP at 2006-07
prices
(Rs. Crores)
Per Capita Income at
Current prices (inRs)
Domestic Product
Per Captia Income
1,58,128
10947.55
1532529
4099
68258
9,77,754
2,29,461
2,07,904
33,970
2,40,261
Rs.33,970
CHAPTER-I
PHYSICAL FEATURES AND DEMOGRAPHIC PARTICULARS :
Topography: AP is the largest state in the southern peninsular region,
with an area of 2,75,100 sq kms and a coast line of 974 kms. Based on
the physical features, the state is divided into three regions - Eastern
hills, the coastal plains and peninsular plateau . Godavari, Krishna,
Pennar and Vamsadhara are the major rivers flowing through the state.
The state has 23(twenty three) districts, with 9 districts in the coastal
area, 10 districts in the Telangana area, and 4 districts in the
Rayalseema region. Hyderabad is the State capital.
Demographic particulars: The population of A.P. as per the 2001
census stands at 76.21 millions. This constitutes about 7.41% of the
total population of the country. This makes A.P. the most populous of the
4 southern states. The rural population of the state is 72.7%. .
The average literacy rate in the State is 60.47 which is a good increase
from the 1991 figure of 44.1 The literacy rate among male population is
70.32, and that amongst female population is 50.43
RESOURCES:
Agriculture: Andhra Pradesh is endowed with many natural resources
like fertile soil, perennial rivers, rich mineral deposits, good human
resources, and a climate congenial for agriculture. The state is a leading
producer of paddy and other crops like tobacco, cotton, sugarcane,
pulses, fruits and vegetables etc. Major furits produced are Mangoes,
grapes, pineapple, banana and guava. Apart from these, the state also
produces spices like chillies, turmeric, ginger, coriander, etc. The states
share in rice production in the country is 12.75%, ( 2005-06 data) share
in maize production is 20.99% , Ground nut is 17%, Mesta is 53%,
tobacco is 36% and turmeric is 61%.
Forest resources: Andhra Pradesh has a total forest cover of 23%of the
total geographical area of the state. Around 45% of the cover falls in the
Telangana region, while around 30% falls in the coastal region and 25%
in Rayalaseema region.
The major forest produces in the State are Timber, fire wood &
charcoal, Minor forest produce include bamboo, beedi leaves, soapnuts,
red sanders wood etc. Plantation products like cashew, teak and coffee
are also grown.
Livestock and Poultry:

Andhra Pradesh has 20.56% of the countries poultry population. It is
also the leading producer of poultry and eggs. It contributes to around
3
33% of eggs and 18 % of broiler meat in the country.

AP has a rich
livestock population, and is a major producer of hides and skins (10% of
the countrys total production.
Having a long coastline, AP is also a leading producer of marine food
products.
Minerals : Andhra Pradesh is the leading producer of barytes, mica,
coal, bauxite, lime, granite etc.. The state produces about 10 million
tones of industrial minerals. Andhra Pradesh is endowed with a major
share of deposits of some minerals in the country: Barytes : 97%,
Clay: 32%, Sand : 62%, Silver : 40%, Quartz : 40%, Mica Crude :
47%, Feldspar : 24%, Apatite : 27%
Natural Gas: Vast reserves of natural gas are found in the KrishnaGodavari basin with 47 million standard cubic metres per day, has
opened up a plethora of industrial opportunities.
Human resources: Every year, the state produces more than 81,000
engineers, post graduates in computers, and management students, who
make world class professionals with good knowledge of English. These
young professionals have made a mark in the global IT industry. The
women force in the state has set exemplary standards through the Self
Help movement. The state houses a number of Engineering Colleges and
Management / Business schools. Prestigious Institutions like Indian
Instititute of Technology ( IIT), Birla Institute of Technology ( BITS), IIIT,
NALSAR, National Institute of Techonology (NIT) etc are located in the
capital.
Human Resource Development:
Andhra Pradesh has the unique
advantage of housing major R&D Institutions, and National and
International level training centres in all fields. The major IT training
centres like International Institute of Information Technology, CMC,
NIPER etc have training centre in Hyderabad. International School of
Business, and Administrative Staff College of India, are other
international level training centres that impart quality management
training. NIRD, NAARM and NEERI provide corporate training to
personnel engaged in rural management.
AP INDUSTRIAL ENVIRONMENT:
INFRASTRUCTURE :
Power: AP had an installed power generating of capacity of 12,381.54
MW ( as on 31.3.08), including its share from Central sector projects and
purchases from private sector. The state has thermal power stations at
Kothagudem, Ramagundam, Nellore, Vijayawada and Rayalseema. Major
Hydel plants at Srisailam, Nagarjun Sagar, Sileru, and Machkund. Gas
plant is located at Vijjeswaram. In 2007-08, 61,245 Million units were
generated.
Roads: AP has been one of the first states to encourage private sector
participation in infrastructure development. The state ha s a total length
of over 2,00,000 kms of road network, including national and state
highways, district and rural roads. Development of high density corridors
on major routes is being undertaken with private participation.
Airways: A world class International airport is located at Shamshabad,
near Hyderabad. International flights to Singapore, Apart from
Hyderabad, there are airports at Visakhapatnam, Tirupathi, Vijayawaa
and Puttaparthi. . Hyderabad has an air-cargo complex with customs
clearance. Direct flights to Singapore, Sharjah, Kuwait, Muscat,
Malaysia, Dubai and New York operate from Hyderabad. Andhra
Pradeshs share in All India Air traffic is around 5.29 in domestic traffic
and 3.3 in International passenger traffic. The average per month
domestic passenger traffic is 1.19 lakhs and that of International
passengers is 36,000. Average cargo handled per month is around 2052
Tonnes.
Sea ports: Andhra Pradesh has the biggest seaport at Visakhapatnam,
with feeder services to Europe, Russia, USA and the Asia Pacific.
Berthing of vessels are available upto 50000 DWT. Other ports are
located at Gangavaram, Kakinada, Krishnapatnam, and Machilipatnam
Industrial Infrastructure :
There are 272 Industrial estates and
industrial development areas in the state, covering an area of 14700
hectares.
The State Government is in the process of developing
Industrial parks at different places, for specific groups of industries.
Industrial parks have been established for locational and logistic
advantages. The special industrial parks in the state are : Software park
at Hyderabad, Hardware park, near Shamshabad, ICICI knowledge park ,
Hitec city for software units, Apparel Park at Gundlapochampalli, Export
Promotion Park at Pashamylaram, , Hitec city, Food parks one each in
the 3 regions of Telangana ( processing of poultry products/processing of
coarse grain& millets/spices), Coastal Andhra(value added rice products,
dairy products, horticultural products, marine products, labour oriented,
export oriented industry, and in Rayalseema region( processing of
vegetables- onion, tomatoes, fruits, spices-coriander, edible oils, labour
oriented, export oriented industry)at Krishna, Machilipatnam, RR
district, Leather parks: 72 mini parks, Exim park at Visakhapatnam,
Agri export zones, Gems and Jewelry park etc, Marine Bio tech park,
SEZs, and Pharma city at Visakhapatnam.
Agri Export Zones for the following produce are proposed at the places
mentioned against them:
mangoes -Krishna district,
gherkins Mahaboobnagar, Rangareddy, Medak, Karimnagar,
Warangal, Anantapur, Nalgonda,
mangoes
and grapes Hyderabad, Rangareddy, Medak,
Mahaboobnagar,
Mango pulp and fresh vegetables Chittoor
Other parks coming up are Gems and Jewellery park,
Visakhapatnam Exim park,
Support Institutions: R&D institutes: Apart from the industrial parks,

AP is home to several Research and development Institutions, and
Business schools. R&D Institutions located in AP are: IICT., CCMB,
DRDL, DMRL, NRSA, NIRD, NISIET, CITD, NGRI, ICRISAT, etc.
Entrepreneurship Development: Many training Institutions in the state

provide Entrepreneurship Development training and technical
consultancy. Important among these are NIMSME, MSME-DI, APITCO,
CEDAP, Self Employment and Training Institutes in all districts, and a
host of NGOs.
Financial Institutions: As in March 2008 there were 5990 branches of
scheduled banks, of which 1163 are rural branches. The following is the
network of bank branches in the state. The Andhra Pradesh State
Finance Corporation ( APSFC) provides industrial credit, and has
branche offices in all districts.
Industrial scenario in the state: SSI sector: As on 31.3.09, there were
1,58,128 MSME units in the state dispersed across the state, with an
investment of Rs. 10947.55 crores, providing employment to 15,32,529
persons. Ranga reddy district houses 21,551 units (13.6%) followed by
Hyderabad (15,477 - 9.78 %) and Visakhapatnam ( 10,746- 79%).
Nearly 23% of units belong to the food processing center, followed by
Mineral based industry (10.27%) and metal products industries ( 9.8 %)
The details of category-wise distribution of SSIs ( as on 31.3.09) in the
state is as follows:
S.No.
Category
No. of units
1.
Food Processing
Beverage & Tobacco
products
Cotton Textiles Wool,
silk & synthetic fiber
textiles Jute, hemp
&
mesta
textiles
Hosiery
and
garments
Wood products
Paper products and
printing
Leather & leather
products
3.
7.
8.
9.
Employment
36828
Investme
nt crores
2292.52
3105
264.57
49099
12769
10223
113.53
623.5
71259
74381
3512
44.86
18790
374529
10.
11
12.
13.
14.
15.
16.
17.
18
19
20
Rubber, plastic &

petroleum products
Chemical and allied
inds
Mineral based
industries
Basic metal
industries
Metal products
Machinery and
equipment
Electrical and
electronic
Transport equipment
and parts
Miscellaneous
Repairs and services
Others
Total
8016
873.39
69759
7363
1213.14
111816
16251
1403.56
260114
2648
460.78
43741
15501
11696
919.98
576.78
131294
88940
5420
631.6
64448
2282
75.82
20244
3471
14634
4454
158173
167.81
254.65
587.84
10504.33
29208
74306
50087
1532015
Source: Commissioner of Industries, Govt of AP
L&M Industries: Andhra Pradesh has emerged as one of the most

attractive investment destination by attracting a large number of
investors. The State is home to 4099 large & medium scale industries
with investment of Rs. 68258 crores creating employment to 9,77,754
persons. The maximum number of units are located in Ranga Reddy
( 839 nos) and Medak ( 806).(data as on 31.3.09)
The State is ranked 3rd in the country with a total Rs. 1,51,454
crores of committed investment with an employment potential to
7,81,476 persons in the State after liberalization of industrial policy.
Exports from AP: The total exports from AP during the year 2007-08
were to the tune of Rs. 57343 crores. The share of software was 45.5% ,
and that of food products was 10.6%. The exports during 2006-07 was
40601 crores and that during 2005-06 was 24407.9 crores.
Exports from AP during 2007-08 were as follows:

Agriculture & Agro based, forest products
Rs 6083 crores
Leather , animal & marine products
Rs 1746 crores
Mineral and mineral products
Rs 2711 crores
Handlooms & Textiles
Rs 1097 crores
Handicrafts & carpets
Rs 545 crores
Drugs, Pharma, allied & chemicals, plastics
Rs 10787 crores
Engineering items
Rs 7148 crores
Electronics & electronic parts
Rs 1104 crores
Software
Rs 26122 crores
Total
Rs 57353 crores
Thrust areas: The Vision 2020, a document planned to catapult the

state in to a developed economy with a growth rate of 9-10%, has
identified 24 growth engines for development. These include
Rice,
Dairy,
Poultry,
Horticulture,
Fisheries,
Agro-industry,
Infrastructure development,
Construction,
Textiles,
Mining,
Pharmaceuticals,
SSIs,
Information technology,
Knowledge based services,
Tourism,
Logistics,
Small-scale services,
Healthcare and
Education.
Food processing: fruit and vegetable processing, fruit based ready to
serve beverages, wine making, food grain milling, dairy products,
processing of poultry, eggs, meat and meat products, bread, oilseed,
breakfast foods, biscuits, other packed foods, cold storage units, food
grade packaging material, etc
Bio technology: tissue culture labs, green houses, mushroom labs,
seed production units based on modern scientific methods to meet
industry standards. Bioinformatics, etc.
Information Technology and Enabled Services: software development,
hardware, BPO, call centers, etc
Pharmaceuticals: AP contributes about 34% of the countrys turnover of
domestic pharma industry. A Pharma city at Visakhapatnam is proposed
to give the industry a further push.
GOVERNMENT INITIATIVES
Policy Initiatives
Industrial Policy 2005-2010
The Government of Andhra Pradesh have announced a New
Industrial Policy for 2005-10 to extend various incentives for the SSI,
Tiny and Large and Medium scale sector industries located other than
the Municipal areas of Hyderabad/ Vijayawada/ Visakhapatnam. The
incentives available under the policy are given below.
Abstract of Fiscal Benefits
S.No Category of
Industry
1a.
SSI/Tiny units
Fiscal Benefits
o 100% reimbursement of Stamp duty and
transfer duty paid by the industry. (5.1.2)
o 100% reimbursement of Stamp duty for lease
of land/shed /buildings (5.1.3)
transfer duty paid by the industry on financial
10
o
o
o
o
o
o
o
o
o
o
o
deeds and mortgages etc (5.1.4)

25% rebate in land cost in IEs/IDAs limited to
Rs.5 lakhs (5.1.5)
Power cost will be reimbursed @ Rs.0.75 per
unit during the first year of the policy and
thereafter for the remaining four years the rate
of reimbursement would be so regulated on
yearly basis keeping in view of the changes in
the tariff structures to ensure that power cost
to the industry is pegged down to the first
years level (5.1.11)
15% Investment subsidy limited to Rs.15 lakhs
(5.2.2)
An additional subsidy of 5% limited to Rs.5
Lakhs for SC/ST entrepreneurs (5.2.3)
25% of the tax paid during one financial year
will be ploughed back to Tiny/SSI/ Large &
Medium Industries as a grant by the
Government towards the payment of tax
during next year. Benefit will be available for 5
years from the date of commencement of
production i.e upto 6th year. (5.2.4)
3% interest rebate limited Rs.5 Lakhs per year
for 5 years (5.2.7)
5% of the project cost will be provided as seed
capital assistance to SSI/Tiny units started by
SC/ST entrepreneurs limited to Rs.5.00 Lakhs
(5.2.8)
8% subsidy on capital equipment for
technology upgradation (5.4.6)
50% subsidy on the expenses incurred for
quality certification limited to Rs. 1 Lakh
(5.4.9)
25% subsidy on cleaner production measures
limited to Rs.5 Lakhs (5.6.8)
50% subsidy on the expenses incurred for
patent registration limited to Rs. 5 Lakh
(5.10.3)
11
1b.
Women
Entrepreneurs

o 25% rebate in land cost in IEs/IDAs limited to
Rs.5 lakhs (5.1.5)
o Power cost will be reimbursed @ Rs.0.75 per
o 15% Investment subsidy limited to Rs.15 lakhs
(5.2.2)
o 5% Additional Investment subsidy limited to
Rs.5 lakhs (5.3.5)
o Another 5% Investment subsidy limited to Rs.5
lakhs for women belong to SC/ST community
(5.3.6)
o 25% of the tax paid during one financial year
o 5% of the project cost will be provided as seed
capital assistance limited to Rs.5Lakhs (5.3.7)
o 5% interest rebate limited Rs.5 Lakhs per year
for 5 years (5.3.8)
o 8% subsidy on capital equipment for
technology upgradation (5.4.6)
o 50% subsidy on the expenses incurred for
12
(5.4.9)
o 25% subsidy on cleaner production measures
(5.10.3)
2.
Units
other
SSI/Tiny units
than o 100% reimbursement of Stamp duty and

o 25% rebate in land cost in IEs/IDAs limited to
Rs.5 lakhs (5.1.5)
o Power cost will be reimbursed @ Rs.0.75 per
o Infrastructure assistance to stand alone units
13
by contributing 50% of the cost of

infrastructure from IIDF subject to a
maximum of Rs.1 cr. (5.1.16)
(5.4.9)
o 25% subsidy on cleaner production measures
(5.10.3)
3.
Mega Projects
4.
Existing
Tiny/SSI o 50% subsidy on the expenses incurred for
units and other than
Mega projects
(5.4.9)
patent registration limited to Rs. 5 Lakhs
(5.10.3)
Existing
Large o In order to address the specific problems of
Industries and Mega
existing large industries, Government may
projects
offer special package of fiscal benefits on case
to case basis. Exact fiscal benefits would be
decided by SIPB from time to time depending
on the nature of the project, investment,
location, employment etc. An Industrial
o Mega projects are eligible for all the incentives

available for large and medium scale
industries.
will be ploughed back to Industry as a grant
by the Government towards the payment of tax
Further, the Government will also extend
tailor-made benefits to suit to particular
investment requirements on case to case basis.
( 5.7.4)
14
Promotion fund with adequate provision will

be created for the purpose. Guidelines and
modalities for operating the fund will be
decided by the SIPB (5.7.4)
Cluster Development in the State: The following clusters are being

undertaken in the State for cluster development:
1. Imitation Jewellery cluster, Machilipatnam, Krishna district
2. Mango jelly cluster, Bhimli, Vijayanagaram
3. Mango jelly cluster, Kakinada, East Godavari district
4. Burnt lime cluster, Piduguralla, Guntur district
5. Turmeric processing cluster, Duggirala, Guntur district
6. Food processing cluster, Vijayawada, Krishna district
7. Graphite Crucibles cluster, Rajahmundry,East Godavari district
8. Ready made garments cluster, Rayadur, Anantapur district
9. FRP Cluster , Hyderabad ( by MSME=DI, Hyderabad)
For combating Industrial sickness:
1. Industry Facilitation Council
In Andhra Pradesh Industry Facilitation Council has been
constituted under the provision of Interest on Delayed Payments to Small
Scale and Ancillary Industrial undertakings Act 32/93 read with
subsequent amendment of 23/98 has come into effect from 2 nd
April,1993.
Rehabilitation of Sick SSI units :
The Industrial Sickness in Andhra Pradesh is reported to be as
high as 38% as per the recent All India Census of SSI units conducted in
15
2001-2002. In order to reduce the percentage of sickness the State Govt.

introduced a new scheme called A.P.Small Scale Industries (APSSIRS) for
effective revival of sick SSI units. Under the scheme any sick SSI/
Ancillary/Non-BIFR unit in Manufacturing sector whose total investment
in plant and machinery exceeds Rs.5.00 lakhs and above would be
eligible for revival package subject to fulfilling certain other conditions
and norms stipulated in the scheme. Under this scheme, viable sick
units would be provided with various fiscal and non-fiscal concessions
and reliefs both by various Govt Depts/ Agencies and financial
institutions depending upon the revival package approved by the
members of Special Cell under APSSIRS scheme. The facilities available
under the scheme are given below.
Power concessions
Waiver of minimum charges during the closure period
Exemption from security deposit for reconnection.
Tax Concessions
Deferment of arrears
Continuation of incentives sanctioned earlier
Non-fiscal
Relaxation from power cuts
Permission to mortgage surplus lands
Amicable settlement of labour disputes
For operating this scheme Special Cell has been created in the
Commissionerate of Industries for receiving and processing of the
applications from sick industrial units and to extend concessions as per
their eligibility. So far 28 cases have been considered for sanction of
reliefs and concessions for revival.
APs Strengths
Andhra Pradesh, a vibrant state provides a firm and ideal platform
for an industry to takeoff
Its proactive policies and legislations are helpful tools for an
investor to come in
It has made far reaching changes in
16
in
1) Labour Laws 2) Industrial Policy
3) Power Reforms 4) Provision of Industrial Water
5) Enacted single window clearances Act
6) A model state for good governance
Centrally and strategically located

Second longest coastline in the country
Ample water resources
Second largest mineral reserves in the country
Largest bulk drug and formulations industry in the country
Capital city Hyderabad is globally recognized and fastest growing
base for IT enabled services
Growing centre for Biotechnology
Leading state in several Agro-based industries Sugar, Edible Oil,
Sea foods
First state to introduce Infrastructure Development Enabling Act
Huge gas reserves found in Krishna Godavari basin 14 trillion
cubic feet
Power good PLF : 96.3%
Good rail, road network and communications
Government of Andhra Pradesh identified the following Growth

engines in the Primary, Secondary and tertiary sectors
Primary
Rice
Groundnut
Cotton
Chillies
Sugarcane
Horticulture
Cocoons
Dairy
Eggs
Meat & Meat Products
Fisheries
17
Mining
Secondary
Food Processing
Chemical Products,
Small Scale Industries
Electricity
Tertiary
Construction
Trade
Railways
Transport
Business Services (IT)
Education
Medical & Health
Communications
Banking
18

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Executive Summary

ANDHRA PRADESH AT A GLANCE

2,75,100 Sq. kms

East - Bay of Bengal

Workers non agrl

Railway track length

13.143 millions( 37.7

Total Net State

Livestock and Poultry:

33% of eggs and 18 % of broiler meat in the country.

Support Institutions: R&D institutes: Apart from the industrial parks,

Entrepreneurship Development: Many training Institutions in the state

Rubber, plastic &

Source: Commissioner of Industries, Govt of AP

L&M Industries: Andhra Pradesh has emerged as one of the most

Exports from AP during 2007-08 were as follows:

Thrust areas: The Vision 2020, a document planned to catapult the

deeds and mortgages etc (5.1.4)

o 100% reimbursement of Stamp duty and

than o 100% reimbursement of Stamp duty and

by contributing 50% of the cost of

o Mega projects are eligible for all the incentives

Promotion fund with adequate provision will

Cluster Development in the State: The following clusters are being

2001-2002. In order to reduce the percentage of sickness the State Govt.

Centrally and strategically located

Government of Andhra Pradesh identified the following Growth

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