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Andhra Pradesh set out to strengthen MSME sector: Minister
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SME Times News Bureau | 21 Jul, 2020
Instead of following other states on the beaten track to woo foreign
investors, Andhra Pradesh has set out to strengthen its MSME sector and
build an investment-friendly ecosystem for big ticket investments by the
time the Covid-19 clouds clear up.
Mekapati
Goutham Reddy, Andhra Pradesh's Minister for Industries, Commerce and IT,
said that the Vizag gas leak mishap has also led the YS Jagan Mohan
Reddy government to re-examine the state's industrial policy.
Q: How is Andhra Pradesh handling the Covid-19 impact on its industry?
A:
We were the first state or rather the only state to address the MSME
sector. During this crisis, we paid 5 years of outstanding incentives
that were due to the sector, totalling about Rs 963 crores. We paid it
in 2 instalments within two months. So out of 97,000 units, 40,000 units
were benefitted. So today while banks are reluctant to lend, people
have surplus cash and they want to go into expanding mode. Those who
were employing 10 people are saying they want to employ 20 more people.
So actual employment is taking place, because MSME sector is the
backbone. If you see, MSME expansion is taking place in Andhra Pradesh.
Q:
During the prolonged lockdown, your neighbouring states such as
Karnataka, Tamil Nadu, and Telangana went into overdrive to attract
foreign investors. Why has Andhra Pradesh maintained a low profile on
this front?
A: Firstly, our CM said, please don't do any MoUs
without any guarantees of investment. If you look at the last 3 months,
we have attracted Rs 4000 crore of investment. And we also believe we
need to do structural strengthening. What is it that investors want? So
we said, first of all we will create a world class infrastructure
industrial park. With notified, classified zones. So, if it's a red
zone, only red industries would be allowed to come there and no other
industries. In a green zone, a red one industry cannot go. So, we should
actually map out the entire state.
Our target is to deliver
45,000 acres of industrial land complete in terms of all services
typical of Hong Kong, China or Sri City, which is our role model. And
second most important thing which the CM has said, we're going to create
a world class workforce for tomorrow. So, we're investing in 13 skill
development colleges, in every MP's constituency. The idea is to create
apprenticeship, create word class curriculum for the next batch of
workers, and when we have these basic ingredients, when we can deliver
on infrastructure and create a working work force.
Q: How do you plan to build a sustainable investment climate in Andhra Pradesh?
A:
We have strategic strengths. We have a long coastline, we're going to
develop 3 major ports. Naturally industries would be aligned to come
here. But for this to be sustainable, I personally believe incentives
are not great value creators in the system. On the contrary, they
actually create the kind of businessmen whose model is only running on
these incentives. So, they do not develop an ecoculture, will not invest
back in the expansion of units, will not create infrastructure for
training of the people.
So the state in the long term loses out. I
would rather get a valuable, renowned investor, somebody like the
Tatas, who would invest in my system. I'd rather give him all the
services, because I know he'll plan for the next 100 years. Of course,
all are not Tatas. But then we're also creating an active
entrepreneurship climate by reactivating the APIIDC.
Q: Ever
since Unlock, Visakhapatnam has witnessed a series of industrial mishaps
beginning with the LG Polymers gas leak. Where do you think things are
going wrong?
A: These are regular, not out of the blue, sudden
catastrophic actions that have taken place. But what has happened is in
this crisis situation of Covid pandemic, people are a little more
sensitive. But if you really look at it, whether it's an LG or somebody
else, it's a basic lethargy which sort of creeps into the system when
you have a prolonged lockdown and that's why we have asked all our
chemical companies to have a relook at all their protocols.
Q: Do
you think that the speed at which action was taken in the LG Polymers
gas leak case will have an adverse impact on investment sentiment?
A:
If you look at it, we did not arrest people till the investigation
submitted its report. Our paramount concern was we better put the guys
back, because they're the guys who know where the valve is, what
chemical they are using or which chemical is in what storage. If you ask
the pollution control guy, he has no clue. So, we felt rather than
disrupt and if suppose we start arresting people from day one, suppose
there's no one to manage the system, it could have been more
catastrophic. Only after the member committee submitted its report, we
arrested the guilty. Only after 2 months we arrested the guilty.
Q: So how are you going to walk the tightrope between attracting investors and ensuring people's safety?
A:
That's the reason why we're going back to our drawing boards, our
fundamentals. This industry (LG Polymers) when it was started, was a
certified industrial area where there were no settlements back in 1961.
But indiscipline creeps in, due to surging population and stress on
land, people relent, slowly buffer zones become municipal areas. When I
went to the place the day after the mishap, I saw next to the tank, on
the periphery there is a huge settlement of 3,000 people. How the hell
did the system allow it to come in?
So, instead of blaming
anybody, I said let's bring in sacrosanct laws. Let's first zone the
entire state. A red zone industry will not be allowed to be set up in
any other zone. It also becomes easier for us to provide common shared
facilities; we're going to bring in strong pollution monitoring systems
where we're going to charge these people. In the new system we are
putting in place, the government is taking the onus to ensure creation
of an environment-friendly system and making sure because if we give to
any of these companies they are not as efficient as what we believe them
to be.
Q: Which sectors is Andhra Pradesh focusing for the immediate future?
A:
As a state we are investing more in medical infrastructure for the next
6 to 9 months. I think creating that security, by way of bringing in
more medical infrastructure and creating that kind of facilities will
actually be what the government's focus will be. This will also help us
in creating medical equipment. Medical equipment is also something we
are now looking at. We already have a MedTech Zone at Visakhapatnam
which has the success story of bringing out India's first Covid-19 test
kit. Now we're bringing ventilators out which are going to cost a
fraction of the original price. Very soon we're coming out with an MRI
system also from there.
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