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Last updated: 21 Jul, 2020  

Goutham.9.thmb.jpg 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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