andhra pradesh 190111-ibef

ANDHRA PRADESHNovember 2010

2

Investment climate of a state

Resources/Inputs

Incentives to industryPhysical and social

infrastructure

Regulatory framework

• Skilled and cost-effective labour

• Labour market flexibility

• Labour relations

• Availability of raw materials and natural

resources

• Tax incentives and exemptions

• Investment subsidies and other incentives

• Availability of finance at cost-effective terms

• Incentives for foreign direct investment (FDI)

• Profitability of the industry

• Procedures for entry and exit of firms

• Industrial regulation, labour regulation, other

government regulations

• Certainty about rules and regulations

• Security, law and order situation

• Condition of physical infrastructure such as

power, water, roads, etc.

• Information infrastructure such as telecom, IT,

etc.

• Social infrastructure such as educational and

medical facilities

Investment climate of a state is determined by a mix of factors

ANDHRA PRADESH November 2010

3

Contents

Advantage Andhra Pradesh

State economy and socio-economic profile

Infrastructure status

State policies and incentives

Business opportunities

Doing business in Andhra Pradesh


4

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

Andhra Pradesh November 2010

ADVANTAGE ANDHRA PRADESH

5

Hub for knowledge-based industries

Policy and fiscal incentives

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.

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 poolThe 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.

Advantage Andhra Pradesh … (1/2)




6

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.

Advantage Andhra Pradesh … (2/2)




7

Andhra Pradesh in figures … (1/2)

Parameter Andhra Pradesh All-states Source

Economy

GSDP as a percentage of all states‘

GSDP8.2 100.0 CMIE, as of 2007-08, current prices

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

Installed power capacity (MW) 13,409.4 159,398.5Central Electricity Authority,

as of March 2010

GSM cellular subscribers (No) 33,325,765 456,586,162Cellular Operators Association of India, as of

June 2010

Broadband subscribers (No) 400,663 4,981,976 As of October 2008

National highway length (km) 4,537.0 70,548.0Ministry of Road Transport & Highways,

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

Birth rate (per 1,000 population) 18.4 22.8Ministry of Health & Family Welfare, RHS

Bulletin, March 2008


* In terms of Indian rupee


8

Andhra Pradesh in figures … (2/2)

Parameter Andhra Pradesh All-states Source

Ease of doing business

FDI inflows (US$ billion) 4.8 120.2Department of Industrial Policy and

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

SEZ (No) 22 121Functional as of August 2010,

www.sezindia.nic.in

Parameter Andhra Pradesh Government

Policy support

Sectors with specific policiesIndustry overall, biotechnology, Information and communication

technology, tourism, textile and apparel

Availability of labour Adequate skilled labour available

PPP: public private partnership, SEZ: special economic zone



9

Medium HighLow

Medium

High

*Factor advantage

Polic

y th

rust

*Factor advantages include benefits due to geographical location and availability of factors like talent pool, natural resources and capital

Key industries with policy thrust and factor advantages


Low

High

Textiles

and apparel

Agro and food

processing

IT and ITeS

Biotechnology

Bulk drugs and

pharmaceuticals

Industry attractiveness matrix


10

Contents








11

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

STATE ECONOMY AND SOCIO-ECONOMIC PROFILE


http://www.aponline.gov.in/

12

• 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)

Source: CMIE

Andhra Pradesh‘s GSDP


27.6 30.0 32.636.6

43.5 46.953.3

66.0

81.2 82.085.8

0.0

20.0

40.0

60.0

80.0

100.0

1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10

CAGR

12%


13

• 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)

Source: CMIE

Andhra Pradesh‘s NSDP


25.0 27.1 29.6 33.139.5 42.1

47.6

58.9

72.7 73.7 76.9

0.0

20.0

40.0

60.0

80.0

100.0

1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10

CAGR

11.9%


14

The tertiary sector has an increasing share in Andhra Pradesh‘s

economy

• In 2009-2010, at US$ 41.9 billion, the tertiary sector contributed 48.9 per cent to the GSDP (at current prices). It was followed by the primary sector, contributing 28.7 per cent (US$ 16.6 billion) and the secondary sector‘s contribution of 22.4 per cent (US$ 19.3 billion).

• During the period, secondary sector had largest growth of 12.8 per cent followed by tertiary sector (12.3 per cent) and primary sector (10.9 per cent).

Source: CMIE


31.6 28.7

21.0 22.4

47.4 48.9

0%

20%

40%

60%

80%

100%

1999-00 2009-10

Primary sector Secondary sector Tertiary sector

Percentage distribution of GSDP

CAGR

10.9%

12.8%

12.3%


15

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.

US$

Source: CMIE

Per capita GSDP


366.4 394.0 426.5471.6

553.1 589.4662.7

812.9

990.0990.0

1025.6

0.0

200.0

400.0

600.0

800.0

1,000.0

1,200.0

1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10

CAGR

10.8%


16

Industries in Andhra Pradesh

Key industries in Andhra Pradesh

• Agro and food-based industry

• Biotechnology

• Bulk drugs and pharmaceuticals

• IT and ITeS

• Mines and minerals

• Textiles and leather

• Tourism

• The natural resources, policy incentives and infrastructure in the state are favourably suited for investments in major sectors such as drugs and pharmaceuticals, biotechnology, IT and ITeS, mines and minerals, textiles, leather and tourism.

• Andhra Pradesh is one of the foremost states to have developed sector-specific policies.

• Forming industrial clusters and developing infrastructure has been a key strategy of the state to attract 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.



17

Andhra Pradesh – among the three largest food-grain producers

in the country

CropAnnual production

(‗000 tonnes)

Sugarcane 15,322.0

Rice 14,241.0

Maize 4,152.0

Cotton 3,462.0

Pulses 1,448.0

Groundnut 973.0

Chilly 729.0

Onion 728.0

Jowar 436.0

Greengram 149.0

Mesta* 2.94

• In 2008-09, total area in the state under production of food grains was 7.4 million hectors which remained stable over last three years.

• However, because of increased productivity, production of food grains increased from 19.8 million tonnes in 2007-08 to 20.4 million tonnes in 2008-09.

• Major food grains^ produced in the state are rice, maize, pulses and jowar.

• Other major crops produced were sugarcane, cotton, groundnut, chilly and onion.

• In 2007-08, Andhra Pradesh was among the three largest producers in the country of rice, maize, groundnut and sunflower seeds.


Source: Department of Agriculture, Government of Andhra

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.


18

Andhra Pradesh‘s exports trends

• Andhra Pradesh‘s exports increased at a compound annual growth rate (CAGR) of about 26.6 per cent between 2001-02 and 2007-08.

• The state‘s major exports products are software and electronic parts which contribute around 50 per cent of exports. Engineering goods, drugs and pharmaceuticals, leather, animal and marine products, and agriculture and agro-based products are other major export items.

• In order to boost exports from Andhra Pradesh, the State Government offers a special package of incentives to the export oriented units (EOU). Source: Capital Markets

Annual exports growth trends (%)

16.2

26.0

23.5

3.8

29.7

50.3

21.3

0 10 20 30 40 50 60

2001-02

2002-03

2003-04

2004-05

2005-06

2006-07

2007-08


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.


19

• According to the Reserve Bank of India, FDI inflows from April 2000 to May 2010 amounted to US$ 4.8 billion.

• The state has had a healthy FDI inflow over the years, primarily, in sectors related to IT and ITeS, automotive, engineering and electronics.

• Of the total outstanding investments of US$ 146.1 billion as of March 2010, Andhra Pradesh had a well balanced distribution by sectors with manufacturing, electricity, services, irrigation and construction sharing project investments of about 16 per cent to 32 per cent each.

Investments and FDI inflows

Break up of investments by sectors as of March 2010

^Excluding financial services

Source: CMIE


22.5%

4.1%

31.8%

23.8%

16.5%

23.8%Manufacturing

Mining

Electricity

Services^

Irrigation

Construction


20

Contents








21

• 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.

Road network


INFRASTRUCTURE STATUS


22

• Andhra Pradesh has a total railway network of 4,287.4 km, which is under the control of the South Central Railway with Secunderabad as the headquarters.

• The state has a total of 748 railway stations. The rail network comprises of 4,102.7 km of broad gauge and 184.7 km of metre gauge tracks.

• When completed, the Mass Rapid Transit Service (MRTS) project is expected to carry about 1.5 million passengers per day by 2015 and 2.2 million passengers per day by 2025.

• The total cost for the MRTS project has been estimated at US$ 2.6 billion. The Central Government has already sanctioned 20 per cent of the project cost through the viability gap funding (VGF) mode.

Sources: South Central Railways website,

http://scrailway.gov.in, AP Admin setup, Directorate of

Economics and Statistics website, www.apdes.ap.gov.in,

Project description, Hyderabad metro rail website,

www.hyderabadmetrorail.in

Railway network … (1/2)

South Central Railway network

Division Broad

gauge

Metre

gauge

Total

Secunderabad 1,311.2 0.0 1,311.2

Vijaywada 945.8 0.0 945.8

Guntakal 1,121.6 184.7 1,306.2

Guntur 617.2 0.0 617.2

Hyderabad 569.6 0.0 569.6

Nanded 823.0 175.9 998.9

Total 5,388.3 360.6 5,748.9



http://www.apdes.ap.gov.in/

23

• 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.

Railway network … (2/2)



24

Airports

• The state has an international airport at Hyderabad and domestic airports at Visakhapatnam, Tirupati, Rajahmundry, Warangal, Vijayawada, Donakonda, Kadapa and Puttaparthy.

• Hyderabad is connected to several key international destinations such as Amsterdam, Bangkok, Chicago, Frankfurt, Dubai, Singapore, Sharjah, London and Kuala Lumpur, besides all major destinations across India.

• The Rajiv Gandhi International Airport near Shamshabad (about 27 km from Hyderabad) is a newly completed airport. It has replaced the former international airport of the city at Begumpet.

• The total cost for this project was US$ 560 million, it has been built on an area of 5,449 acres.

GMR-Hyderabad International Airport Limited

(GHIAL), Shamsabad

Started operations in May 2008.

Constructed by the consortium of:

• GMR group

• Malaysia Airport Holding Berhad (MAHB)

• Government of Andhra Pradesh

• Airports Authority of India

Single terminal, expandable structure

Final capacity of 40 million passengers per year and

one million tonne of cargo.

Total built-up area of 900,000 sq m.

Lufthansa Technik to set up a maintenance, repair

and overhaul (MRO) facility at the airport.

A new flight academy to be established at the

airport.


Source: GHIAL website, www.hyderabad.aero


25

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)


22 2326

3033 34 36 36

4045 44 46 48 50

56 56.3

64.5 63.9 65.5

0

10

20

30

40

50

60

70

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


26

Telecom infrastructure

• As of December 2009, Andhra Pradesh had 4,166 telephone exchanges and 2.5 million wire line telephone connections.

• The number of public call offices as of March 2009 was 200,291.

• There are about 41.4 million cellular subscribers (GSM and CDMA) and 400,000 broadband connections.

• The state has approximately 44,000 km of fibre-optic cable network with public and private sector connectivity.

• Reliance Communications has created infrastructure for providing the required bandwidth for basic telecom services and other high-end services by laying a fibre-optic cable backbone of 3,000 km throughout the state.

• The State Government has appointed an agency to provide reliable communications backbone, which will provide gigabit ethernet connectivity to all government departments and 40,000 offices across the state.

• It would connect the state secretariat to district headquarters, mandals and villages, bringing the information superhighway to the doorstep of the common man in rural areas.

• The broadband network being implemented with private participation would connect the state headquarters with 10 gigabit per second (gbps) to each district headquarter, one gbps to each of the 1,128 mandal headquarters and 100 megabit per second to each of the villages.

• As of January, 2010, there were 16,146 post offices in the state.

Sources: Chief General Manager, Telecom, Andhra Pradesh, Department of Telecommunication, annual report 2009-2010



27

• As of March 2010, Andhra Pradesh had a total installed power generation capacity of 13,409.4 MW, which comprised 7,688.5 MW under state utilities, 3,129.3 MW under central utilities and 2,591.6 MW under the private sector.

• Coal- and gas-based thermal power plants with installed capacity of 6,260 MW and 2,580.4 and hydropower plants with capacity of 3,617.5 MW were major sources of electric power in the state.

• The entire capacity of gas-based power plants is contributed by the private sector.

• Per capita consumption of electricity was 746 units in 2008-09.

Installed power capacity (MW)

Source: Central Electricity Authority

Power … (1/2)


11,809.4 11,483.6 11,866.8 11,639.1

13,409.4

0.0

2,000.0

4,000.0

6,000.0

8,000.0

10,000.0

12,000.0

14,000.0

2005-06 2006-07 2007-08 2008-09 2009-10


28

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

• The integrated Andhra Pradesh State Electricity Board (APSEB) was restructured in 1999 to form the following companies:

Power … (2/2)



29

Water supplySewerage system and solid-

waste management system

• The average per capita

supply of water in major

cities is 106 lpcd*

• A coverage of 85 to 90

per cent in the core city

areas.

• Operation and

maintenance costs being

recovered from water

tariffs is high, at 85 per

cent in Hyderabad.

• Solid waste collection

efficiency is very high

across the cities of

Andhra Pradesh and

varies from 85 to 100 per

cent, on an average, for

all the cities

• Area coverage of the

sewerage system in the

major cities varies from

10 per cent to 45 per

cent

* litres per capita per day

Per capita water supply across key cities

Source: Commissionerate of Industries, Andhra Pradesh, 2006

Desired LevelCurrent per capita

supply (litres/day)

Urban infrastructure … (1/2)



30

Sewerage treatment infrastructure (%)• Under the Jawaharlal Nehru National Urban Renewal Mission (JNNURM), 50 projects costing US$1,162.1 million have been sanctioned for Hyderabad, Visakhapatnam, Vijayawada and Tirupati.

• Some of the key areas of development are roads/flyovers, water supply, storm water drainage, old city drains, solid-waste management and mass rapid transport system.

• Projects of value US$ 216.3 million have been completed in 2005 and 2007. In 2007-08, one project of US$ 150.8 million have been completed. These projects were located in Hyderabad and Vishakhapatnam and related to roads, water supply, drains/storm water drains and sewerage.

• In 2009-2010, the Central Government has released US$ 52.5 million for 22 projects.

Visakhapatnam‘s urban Infrastructure snapshot

• Visakhapatnam has a high per capita road length of 1.03 km.

• Percentage of pucca roads in the cities varies from 70 per

cent to 95 per cent.

• Percentage coverage of storm water drains varies from 30

per cent to 50 per cent.

Urban infrastructure … (2/2)

Source: JNNURM, Ministry of Urban Development, www.urbanindia.nic.in


45

40

10.5

23

10

0

10

20

30

40

50

Hyderabad Vijaywada Vishakapatnam

Area Coverage (%) Treated (%)


31

Project name Sector PPP typeProject cost

(US$ million)Stage

Vodarevu Nizampatnam ports and port-based

corridor developmentPorts BOOT 3,652.2 Construction

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

roadRoads BOT-Toll 295.2 Bidding

Narketpally Addanki Medaramitla road Roads BOT-Toll 260.2 Bidding

Bus terminal and commercial development at

MusheerabadUrban development Lease 54.3 Bidding

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

Key public private partnership projects

Source: www.pppindiadatabase.com

EOI-Expression of interest, BOOT: build-own-operate-transfer, BOT: build-operate-transfer, DBFOT: design-build-finance-operate-transfer



http://www.pppindiadatabases.com/

32

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.



33

Education sector … (2/2)

• At the intermediate college level, courses are available in the science, arts and commerce streams.

• Vocational courses are offered in the fields of agriculture, engineering and technology, home science, paramedical, business and commerce, and humanities.

• In 2009-2010, there were 4,611 junior colleges with a total enrolment of 0.8 million students.

• The Technical Education Department of Andhra Pradesh supports 656 engineering colleges.

Colleges by courses, 2009-2010


Degree colleges

• Government colleges: 249

• Aided colleges: 179

• Un-aided colleges: 1,459^

• Under-graduate and post-graduate colleges: 5,236^

Life-sciences institutes

• Centre for Cellular and Molecular Biology

• Centre for DNA Fingerprinting and Diagnostics

• Indian Institute of Chemical Technology

• International Crop Research Institute for Arid and Semi-

Arid Tropics (ICRISAT)

• Directorate of Rice Research, National Academy of

Agricultural Research Management

• National Institute of Nutrition

• Indian Council of Agricultural Research Centres.^As of 2008-09

Source: Socio Economic Survey 2009-2010

Course Number of

colleges

Engineering 656

Master of Computer Application (MCA) 703

Master of Business Administration (MBA) 881

Bachelor of Pharmacy 278

Polytechnics 213

Source: Socio Economic Survey 2009-2010, Government of Andhra

Pradesh

Degree colleges, 2009-2010


34

• As of March 2008, Andhra Pradesh had 1,570 primary healthcare centres (4-6 beds in each), with 2,214 doctors.

• There were 167 community healthcare centre (30 beds in each) with 235 specialists. There are 12,522 sub-centres in the state.

• Hyderabad has approximately 60 hospitals that classify as authorised centres for providing medical services.

Leading hospitals in Hyderabad

Apollo Hospital

Yashoda Super Specialty Hospitals

Care Hospital

Wockhardt Kamineni Hospital

Nizams Institute of Medical Sciences

MNJ institute of Oncology and Regional Cancer Centre

Indo-American Cancer Institute and Research Hospital

Global Hospital

Medwin Hospital

Medicity Hospital

L V Prasad Eye Institute

Krishna Institute of Medical Sciences

*Per thousand persons

** Per thousand live births

Source: Ministry of Health & Family Welfare

As of March 2008

Health infrastructure


Health indicators

Birth rate* 18.4

Death rate* 7.5

Infant mortality rate** 52


35

• There are several sports complexes in Hyderabad, Visakhapatnam, Tirupati and other cities. Swimming and tennis are the major sports although, other games are also popular.

• The Boulders Hill in Hyderabad, The Army Golf Course in Secunderabad and the East Point Golf Club in Visakhapatanam are well known golf courses in the state.

• The Tirupati temple in Southern Andhra Pradesh makes the state one of the leading religious tourism spots in the country.

• AP Tourism promoted convention centres in Hyderabad state include Taramati Baradari, Hyderabad International Convention Centre, Shilpa Kala Vedika, HITEX, Marriott Convention Centre, Ramoji Film City, Katriya De Royal –Convention Facilities.

Cultural infrastructure


Major stadiums and sports complexes in Hyderabad

Swarnandhra Pradesh Sports Complex

G. M. C. Balayogi Athletic Stadium

Gachibowli Indoor Stadium

Fateh Maidan Sports Complex

The Lal Bahadur Stadium

The Lal Bahadur Stadium

Aquatics Complex

Kotla Vijay Bhaskar Reddy Indoor Stadium

SAAP Tennis Complex, Fateh Maidan

Shooting Range, Hyderabad Central University

Rajiv Gandhi International Cricket Stadium


36

• On the industrial infrastructure front, the state has taken a number of developmental initiatives to achieve consistent economic growth.

• The Government has initiated a set of prestigious projects including those in industrial infrastructure for the specific sectors, through the Andhra Pradesh Industrial Infrastructure Corporation Limited (APIIC).

• As of 2008-09, there were 69 Software Technology Parks of India (STPI) in the state.

• APIIC has already helped set up over 300 industrial estates and specialised parks including the L&T Infocity, ICICI Knowledge Park, SP Bio-tech Park, Marine Bio-tech Park, Agri Bio-tech Park, special 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.

Industrial infrastructure development … (1/2)

Number of STPI registered in India and Andhra Pradesh (No)

Sources: IT parks, IT SEZs, IT and Communications Department

website, http://apit.ap.gov.in, Export Performance of IT/ITES

Industry for the year 2008-09- presentation, STPI website,

www.hyd.stpi.in


1052

1164

845

616

173 174 176 69

0

200

400

600

800

1000

1200

1400

2005-06 2006-07 2007-08 2008-09

All India A P


http://apit.ap.gov.in/

http://apit.ap.gov.in/

37

Sources: Commissionorate of Industries, Andhra Pradesh, 2006, SEZ India website, www.sezindia.nic.in, Andhra Pradesh Government budget website,

http://budget.ap.gov.in

Industrial infrastructure development … (2/2)

Larsen & Toubro (L&T) Infocity

Developed jointly by APIIC and L&T.

Spread across 158 acres at Madhapur with state-of-the-

art infrastructure.

Built in three phases with total built-up area of 1.8

million sq ft on 20.7 acres of land. Employs more than

12,500 persons.

Genome Valley

Genome Valley is India‘s first state-of-the-art life

sciences cluster, spanning 600 sq km in Hyderabad.

Provides access to world-class infrastructure to

domestic and international companies.

Comprises dedicated parks such as ICICI Knowledge

Park and Shapoorji Pallonji Biotech Park developed on

a public-private partnership (PPP) model.

• Integrated Infrastructure Development Centres (IIDC) to establish industries in rural/backward areas and provide agriculture–industry link.

• Centres are located in Nandyal (Kurnool), Tada (Nellore), Keelapattu and Madikonda (Warangal), Gajularamaram (Ranga Reddy) and Surampally (Vijaywada).

• The Central Government has given formal approval to 106 SEZs, in-principle approval to four SEZs and 74 notified SEZs.

• APIIC has developed an Export Promotion Industrial Park (EPIP), spread over 204 acres in Medak, at an estimated cost of US$ 35.36 million.

• Critical Infrastructure Balancing Scheme (CIBS) to fund Industrial associations/service societies/NGOs for development of critical infrastructure.



http://www.sezindia.nic.in/

38

IT / ITES

Pharma / Biotech

Textile & Apparel

Guntur

VishakapatnamHyderabad

Sircilla

Warangal

Nalagunda

Food Processing

Vizianagaram

Bheemavaram

Chittoor

Vijaywada

Automobiles & Engineering

Rangareddy

MAHARASHTRA

KARNATAKA

TAMIL NADU

MADHYA PRADESH

ANDHRA PRADESH

Industrial Clusters

NN

Hindupur

Nellore

Karnool Ongole

Mineral

Khammam

Kuppam

Kadapa

Upcoming SEZs Industrial clusters in AP

SEZs and industrial clusters



39

Infrastructure typeInvestments

(US$ million)

Power* 18,864.7

Roads 5,122.8

Oil and gas 753.1

Railways 4,571.5

Airport 1,162.8

Shipping 2,927.6

Total 33,402.5

Infrastructure investments

*Generation and distribution

Source: CMIE

As of March 2010

• Infrastructure investments in Andhra Pradesh were over US$ 33.4 billion, as of March 2010.

• Over 56 per cent of investments in infrastructure were in the area of power generation and distribution.

• About 15.3 per cent of the investments were in the road sector, while another 14 per cent were in the railways sector. Other sectors such as shipping (8.8 per cent), airport (3.5 per cent) and oil and gas (2.3 per cent) also attracted investments.



40

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

Existing mega parks



41

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,

Vizianagaram,

East Godavari

Petroleum. Chemicals and

Petrochemicals Investment

Region (PCPIR)

IT park Nellore Food processing park

Upcoming specialised parks



42

Industry Name of the park, location Brief description

Life-

sciences

Agri-science park The State Government and ICRISAT have jointly set up an agri-science park

at the ICRISAT campus to support the growth of agri-based biotech industry

in the state.

Jawaharlal Nehru Pharma City

(JNPC)

JNPC project is being developed at Parwada, Visakhapatnam, at an estimated

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.

Sector-specific industrial parks … (1/2)



43

Industry Name of the park, location Brief description

Apparel and

textile

Apparel Export Park The park is spread over 172 acres in Gundlapochampally and has units

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,

Visakhapatnam

Set up in an area of 1,000 acres at a project cost of US$ 609.8 million by

Brandix Lanka Limited. Commercial operations started in January 2007.

Apparel Export Park,

Visakhapatnam

Project developed on 146 acres of land for accelerated industry growth

there.

Textile Park, Pamidi Proposed to be developed as a natural garment cluster with basic

infrastructure facilities and skilled manpower.

Handloom Apparel Park,

Pochampally

The Government has identified 50 acres on National Highway-9 near the

Pochampally Silk City and has approved the project at an outlay of US$

810,000.

Sector-specific industrial parks … (2/2)



44

E-seva Rajiv Internet Village AP online E-procurement

• Presence of e-governance

initiative, which offers a

wide spectrum of citizen-

friendly services

• One-stop shop for services

of various state and central

government departments in

an efficient, reliable,

transparent and integrated

manner

• Facilitates online

transaction processing of

payments, issue certificates,

permits, licenses and many

other services

• Launched by the State

Government in

August 2004, its

objective is to bring

government

services/benefits

closer to people living

in rural areas.

• Further, it aims to

provide computer

literacy to at least one

person in each family

in rural areas

• Provides high

bandwidth

connectivity in rural

areas

• E-governance: gateway for the

State Government, offers

multiple services through a

single window to citizens

• Developed and launched by the

Government in partnership

with Tata Consultancy Services

• Facilitates online submission of

forms including registrations,

licences, permits, certificates

and representations to

different government

departments.

• Facilitates online payments for

utilities, taxes, fee, deposits and

stamp duties.

• Automates procurement and

purchase procedures—

spanning from demand

aggregation to procurement

and fulfilment—of the State

Government. Presently, the

portal is servicing 29

government departments, 39

public sector undertakings,

four universities and 127

urban local bodies.

• Over 61,000 tenders with

work amounting to US$ 26.3

billion have been handled

through the portal.

Source: "Mauritius pact with State Government", Eprocurement website, www.eprocurement.gov.in

Virtual infrastructure



45

Contents








46

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.

Sector-specific policies … (1/12)

STATE POLICIES AND INCENTIVES


47

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.




48


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.




49


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 annumsubject 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.




50

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.




51

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.




52

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.




53

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.



54

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




55

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).




56

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.




57

Biotechnology Policy, 2001 (continued)

Key Incentives:

A sales tax of just one per cent for ―high-end‖ biotech products manufactured by units located in – the Biotech Park at Turkapalli

village, Shamirpet mandal, Ranga Reddy district and others – applicable for a period of seven years from the date of

commencement of commercial production of a biotech unit and up to March 2010 and for units commencing operations before

March 2006.

Government of Andhra Pradesh to provide government land on lease or as equity to other Biotech Parks, if the site is found

suitable for such projects. Subject to certain conditions, bioinformatics companies will be offered rebate on the cost of

government land allotted to them at US$ 440 per job created.

Bio-informatic centres to be permitted to be established without any location restrictions. They can be established in residential,

commercial or industrial zones. Companies setting up Bioinformatics Centres in the Genome Valley will get a rebate of US$ 660

per job created, subject to the value of a maximum of two acres of government land and 100 per cent exemption from registration

and stamp duties. Similar incentive to be provided to the bio-informatic units to be set up in Biotech Parks.

The biotech industry is exempt from the purview of statutory power cuts, industrial power tariff (and all other admissible

incentives and concessions for industry) to apply.

General permission to be accorded to run a three-shift operation to the biotech industry (subject to Government of India

concurrence), permit flexibility in the opening and closing times and in the weekly holiday of a biotech unit by amending relevant

provisions of the A.P. Shops and Establishment Act, exempt biotech units from the provisions of Contract Labour Act 1970, in so

far as non-core activities are concerned, set up exclusive Special Industrial Tribunals for Biotech Parks to give top priority to the

settlement of disputes that may arise in units located in the Biotech parks.




58

Company logos cited in this section are registered trademarks of the respective companies.

Contents








59

IT and ITeS• Andhra Pradesh has had a steady growth in IT and ITeS

exports from SEZs and Software Technology Park (STP), recording a 24.5 per cent growth in 2008-09 against the national average of 20.7 per cent.

• Total exports were about US$ 7.1 billion in 2008-09 (from STP and SEZ) against US$ 6.5 billion in 2007-08.

• Total employment generated by IT and ITeS industry in the state increased from 239,000 in 2007-08 to 251,786 in 2008-09.

• In 2008-09, employment generated by the IT sector has grown by 12,786 (including STP and SEZ units).

• As of July 2009, the state had attracted investments to the tune of US$ 110 million, of which investments from foreign companies were at US$ 2 - 3 million.

• As of August 2010, 1,303 IT and ITeS companies were registered under STPI, Hyderabad scheme.

Key players

• Mahindra Satyam

• Microsoft

• Genpact

• Cognizant

• Zensar Technologies

• iGate

• IBM

• Patni Computer Systems

• Tata Consultancy Services (TCS)

• Ikanos Communications

• HCL

• Intergraph

• CSC

• Sonata Software

BUSINESS OPPORTUNITIES

STP: Software technology park


60

IT/ITeS – company profiles … (1/4)

Mahindra Satyam Formerly, Satyam Computers, Mahindra Satyam was established in 1987 and has its global headquarters

at Hyderabad and several offices in 38 countries including India. The company provides software

solutions to over 370 customers including four of the top ten electronics and electrical equipment

manufacturers, three of the top ten in aerospace and defence, two of the top five chemicals

manufacturers and four of the top five networking and communications equipment manufacturers.

Microsoft Established in 1998, the Microsoft India Development Centres (MSIDC) is located in Hyderabad on a

42-acre state-of-the-art campus and employs around 1,500 employees. The company focuses on

strategic and IP sensitive product development for Microsoft. It is Microsoft‘s largest software

development centre outside the US. It has established centres of excellence for storage, networking and

mobility, and has filed over 270 patents in last five years.

IBM IBM is a leading global IT services and solutions provider with offices across the world. Products offered

by company‘s India operations include software, storage, systems and servers, semiconductors, etc. IBM

has been present in India since 1992. Since inception, IBM in India has expanded its operations

considerably with regional headquarters in Bengaluru and offices in 14 cities including a global delivery

centre in Hyderabad. According to the IT market research firm, Springboard Research, IBM emerged as

the largest player with a 10.8 per cent share of the Indian IT services market in 2008.

Cognizant Founded as a captive arm of Dun & Bradstreet with headquarters in the US and operations in India,

Cognizant now has over 50 development centres (including one in Hyderabad) and 25 regional sales

offices, globally. Its services include business process outsourcing,, application and IT infrastructure

services and business consulting. In 2009, the company earned revenue of US$ 1.2 billion. In December

2009, Cognizant invited 120 personnel working in Invensys Rail, at Hyderabad, to work on its recent

global product research and development tie-up with the latter.



61


Zensar Technologies Zensar technologies is an Indian company for IT enabled services with 20 offices around the world

and three delivery centres, one of which is located at Hyderabad. Zensar provides end-to-end

services from IT development to business process. Zensar has a strong engagement with Oracle,

which is their worldwide certified partner, with a team of over 750 consultants. In the SAP space,

Zensar provides template-solutions in key verticals of dairy, textile, pharmaceuticals, manufacturing

and IT / operations. Zensar is one of the large partners of SAP in certain key segments and markets.

Company‘s revenue in 2009-2010 was US$ 105 million.

iGATE iGATE is an ITeS, consulting and BPO services provider. Registered in the US, iGATE has 34 offices

across 16 countries. In 2009, total revenue of the company was US$ 195 million. The company has

delivery centres in the US, UK, Canada, China, Malaysia and India. In Andhra Pradesh, it has an office

at Hyderabad.

Genpact Genpact is a leading BPO company with delivery centres in 13 countries. It has three facilities in

Hyderabad providing diverse specialised services in domains of IT infrastructure management,

enterprise applications, procurement and supply chain services, finance and accounting services, and

customer service to Genpact clients across the globe. The State Government allotted about 50 acres

of land to Genpact in 2007-08 to set up an IT SEZ in Hyderabad.



62


Patni Computer Systems Patni is one of the leading global providers of IT services and business solutions.

Of the total 22 global delivery centres of Patni, three are located at Hyderabad. Revenue of the

company in 2009-2010 was US$ 366 million.

Tata Consultancy Services

(TCS)

A company of the TATA group of India , TCS is a well recognised global service provider for a wide

range of IT solutions, consulting, BPO, engineering services and IT infrastructure . In 2009-2010 total

revenue of the company was US$ 4.9 billion. The company has 142 offices across the world at more

than 42countries. It has four centres / offices in Hyderabad, two of which serve as innovations labs

where cutting edge research in the field of IT and other domains such as life sciences, open source

technologies and quantitative finance are carried out.

Ikanos Communications Headquartered in the US, Ikanos has offices around the world to service a global customer base.

Most of the company's engineering and research is conducted at Toronto (Canada), Bengaluru and

Hyderabad. Ikanos develops robust, high performance semiconductor and software products. The

company is a solutions provider to many of the world‘s leading network-equipment manufacturers

and telecommunications service providers, with more than 330 million ports shipped to date.

HCL Incorporated in 1976, HCL is a leading global technology and IT enterprise with annual revenue of

US$ five billion. The company‘s operation span 26 countries. Has delivery facilities in the US, UK,

Finland, Poland, Puerto Rico, Brazil, China, Malaysia, Singapore, Australia, Czech and India. In India,

the company has offices in 170 cities and 500 points of presence reaching 4,000 towns. In Andhra

Pradesh, HCL has offices located at Hyderabad and Vijayawada.



63


Intergraph As a leading global provider of spatial information management (SIM) software, Intergraph

Corporation fuses geospatial technology to security, helping some of the world's largest government,

military, and industrial organisations in more than 60 countries better manage their operations and

safeguard their infrastructure. In India, Intergraph Consulting Private Limited is a 100 per cent owned

subsidiary of Intergraph Corporation. Incorporated in 1987, Intergraph Consulting is a strategic

offshore development centre engaging in product development, customisation, research and

development serving Intergraph customers worldwide. It has its India office at Secunderabad,

Hyderabad.

CSC A US-based company, CSC was established in 1991 and since then has expanded its India operations

to productively respond to the needs of their customers, worldwide. Recent acquisition s like that of

Covansys and expansion activities have increased CSC‘s development and delivery centres to seven

locations in the country including Hyderabad. In India, the company offers to clients worldwide, high-

value technology solutions including applications development and product support, infrastructure

and BPO services.

Sonata Software Incorporated in 1994, Sonata's services include IT consulting, product engineering services,

application development, application management, managed testing, infrastructure management,

packaged applications and travel solutions. As per the industry rankings released by NASSCOM for

2008-09, Sonata Software figured among the ―Top 20 IT Software Services Exporters‖ in India for

the second consecutive year. Headquartered in Bengaluru, Sonata has a development centre at

Hyderabad. In 2009-2010, total revenue of the company was US$ 50 million.



64

Pharmaceuticals and biotechnology

• Hyderabad is the hub of the bulk-drugs industry, accounting for one-third of the national production of bulk drugs. The state produces a majority of 500 basic drugs produced in the country.

• The biotechnology market size of the sector in Andhra Pradesh in 2008-09 stood at US$ 475 million and accounted for 18 per cent of the total Indian biotechnology industry.

• The industry accounts for 43 per cent of the total biotech revenue generated by companies in south India (US$ 1,104 million).

• The State Government has helped develop the pharmaceutical and biotechnology industry through specific policies promoting knowledge-based cluster approach with financial incentives and appropriate infrastructure support.

• Presence of related educational infrastructure has also helped the industry. The biotechnology incubation centre was commissioned in late 2008.

Key players

• Dr Reddy‘s Laboratories

• AMRI

• Natco Pharma Limited

• Divi‘s Laboratories

• Aurobindo Pharma

• Nektar

• Anu‘s Laboratories Limited

• Suven Life Sciences Limited

• Indigene

• Matrix Laboratories

Limited

• Hetero Drugs

• Neuland Laboratories

• Glochem Industries

Limited (GIL)

• Shantha Biotechnics

• Vimta Labs

• Indian

Immunologicals

Limited (IIL)

• Parexel

• Bharat Biotech

International

Limited (BBIL)

• Biological E. Limited

• Novartis

• Krebs Biochemicals

& Industries Limited

(KBIL)



65

Dr Reddy‘s

Laboratories Limited

Established in 1984, Dr Reddy‘s ranks among the top 15 generics players in the world. With revenue of

US$ 958 million, it is the first pharmaceutical company in Asia-Pacific (outside Japan) to be listed on the

New York Stock Exchange (NYSE). It has offices in 35 countries and operations in over 115 countries.

Overseas business contributes around 86 per cent of the total revenue. Aspires to become a discovery-

led global pharmaceutical company and one of the top 10 generic companies in the world. Present in

the therapeutics category: anti-infectives, cardio-vascular (CVS), diabetes, dermatology, pain

management, nutritional, dental, urological and oncology.

Albany Molecular

Research Inc (AMRI)

AMRI research centre is located in Hyderabad in the ICICI Knowledge Park. Established in 2005, AMRI

provides custom synthesis of scaffolds and building blocks, as well as preparation of reference standards.

A second laboratory for preparing larger amounts of pharmaceutical intermediates, starting materials

and other compounds is now operational as well. The Centre's operations are fully integrated with US-

based resources.

Natco Pharma Limited Natco has four manufacturing facilities and employs around 1,500 people. The company manufacturers

formulations, bulk drug and parenterals. Natco is also a large contract manufacturers in India. The

company has headquarters at Hyderabad. Revenue of the company in 2009-2010 was US$ 65 million.

Pharmaceuticals and biotechnology – company profiles … (1/7)



66

Divi‘s Laboratories Divi‘s is a leading manufacturer of active pharmaceutical ingredients (API) with revenue of US$ 197

million in 2009-2010. The company has a state-of-the-art multi-purpose plant at Choutupal, in Nalgonda

district, and a second plant at Visakhapatnam. The company is among the top 10 producers of naproxen

in the world and 90 per cent of the products are being exported to several countries, including the US

and Europe. Divi‘s also exports dextrome thorphan, iopamidol, nabumetone, phenyle ephedrine and

phen procumar.

Aurobindo Pharma Aurobindo is one among the vertically integrated pharmaceutical companies in India with revenue of

US$ 689 million in 2009-2010. It has a product portfolio spread over major product areas encompassing

CVS, central nervous system (CNS), anti-retroviral, antibiotics, gastro-enterologics, anti-diabetics and

anti-allergic with approved manufacturing facilities by the United States Food and Drug Administration

(USFDA), UK Medicine and Healthcare products Regulatory Authority (UKMHRA), World Health

Organisation (WHO), Medicine Control Council of South Africa (MCC-SA), ANVISA-Brazil for both

APIs and formulations and has global presence with own infrastructure, strategic alliances, subsidiaries

and joint ventures. Along with a registered corporate office at Hyderabad, it has overseas branch offices

at Ghana, Ethiopia, the UK, Vietnam and Hong Kong.

Nektar Nektar Therapeutics is a leading biopharmaceutical company developing a robust pipeline of novel

therapeutics based on its advanced polymer conjugate chemistry technology platform. Nektar also

partners with the top biopharmaceutical companies to bring new products to market. To date, Nektar's

technology and drug development expertise have enabled nine approved products for partners, which

include leading biopharmaceutical companies. Headquartered in the US, Nektar's R&D facility is located

in Secunderabad, Andhra Pradesh.




67

Anu‘s Laboratories Limited Anu's Laboratories Limited, an ISO 9001:2000 certified company was established in 1996.

The company is engaged in manufacturing of quality drug intermediates to meet the needs of

international customers. The optimised process of 2,4-Dichloro-5 fluoro-acetophenone has

enabled the brand to establish itself as the flagship product of the organisation. The products

is available to its wide customer-base as a competitive product of the highest quality. Other

high quality intermediates such as chlorohexanone, 1,3-dibromo propane are also

manufactured by the company along with methyl-4 (4-chloro 1-oxo butyl) a, a di-methyl

acetate. It has a state-of-the-art research and development facility, located at Balanagar,

Hyderabad, which supports product development, contract research and customised

synthesis programmes of the organisation.

Suven Life Sciences Limited The company develops and supplies pharmaceutical and agro-chemical intermediates for

New Chemical Entities (NCEs) and APIs. In 2009-2010, total revenue of the company was

US$ 27 million. The company's manufacturing facilities include fine chemicals, pyrimidines,

purines, imidazoles, indoles and specialty intermediates. Suven's main thrust is in Contract

Research And Manufacturing Services (CRAMS) and the company is serving as many as 22

global life sciences and fine chemical companies. Suven Life Sciences USA LLC, its wholly

owned subsidiary, recently acquired the assets of the New Jersey-based Synthon Chiragenics

Corporation, the global player in carbohydrate- based Chiral technology for pharmaceuticals.

Indigene Indigene Pharmaceuticals is a biopharmaceutical company focused on designing, developing,

and delivering prescription and consumer healthcare products. The company has offices in

the US, Hyderabad, Canada and Switzerland.




68

Matrix Laboratories Limited Matrix has a USFDA-approved facility located at Hyderabad, and has a strong presence in

central-nervous-system drugs, quinolone anti-bacterials, anti-retrovirals and anti-histamines.

Focusing , mainly, on synthetic research and process development, Matrix has six laboratories

with a team of 70 scientists. The company's major customer spread is across 80 countries. In

2009-2010 total revenue of the company was US$ 317 million. It has three API facilities at

Hyderabad and one at Visakhapatnam. In January 2007, Mylan Inc of the US acquired controlling

stake in the company, following which Matrix has now become a subsidiary of Mylan.

Hetero Drugs Headquartered in Hyderabad, Hetero Drugs made a mark being the first in Andhra Pradesh to

produce all the anti-retrovirals: indinavir sulphate, nelfnavir, efavirenz, lopinavir, ritonavir,

lamivudine, zidovudine , stavudine and abscavir sulphate. The company markets its products to

over 50 countries and, recently, penetrated the regulated markets in US, Canada and Europe. In

2005, it was awarded a licence to make generic oseltamivir, Tamiflu. The Swiss firm, Roche,

licensed it to make a generic version of the drug. Hetero Drugs is the parent company in the

Hetero group of companies and other companies which are part of the group are Hetero Labs,

Hetero Research Foundation, Symed Labs Limited, Cirex Laboratories, Genx Laboratories and

also foreign subsidiaries such as Invagen Inc, in USA and Richmond Labs in Argentina, etc. Also,

now, Hetero has its own retail chain of pharmacy outlets in India named, Hetero Pharmacy.




69

Neuland Laboratories Neuland has two world-class manufacturing facilities on the outskirts of Hyderabad. The company

claims to be the largest manufacturer of albuterol sulfate in the world with USFDA approval and

Certificate of Suitability from the European Department for the Quality of Medicines, Council of

Europe. It has also a US FDA approved manufacturing facility for ranitidine HCl Form1, ciprofloaxcin

and latnoprost. The company exports to over 65 countries worldwide, including USA, Canada,

Europe, Latin America, Korea, Japan, Australia and South Africa. In 2009-2010 revenue of the company

was US$ 59 million

Glochem Industries

Limited (GIL)

Glochem is a public limited company manufacturing bulk drugs, drug intermediates and specialty

chemicals. GIL has tie-ups with companies in India and abroad, including the US and Europe, for

contract manufacturing and custom synthesis. GIL has been developing, manufacturing and delivering

tailor-made fine chemicals and intermediates for the leading pharmaceutical and fine chemical

companies on exclusive basis. It is based in Hyderabad.

Shantha Biotechnics A pioneer in the field of biotechnology, Shantha Biotechnics is the first Indian company to develop,

manufacture and market a recombinant human healthcare product in India. Shantha is currently

focused on developing generic biologicals, novel therapeutic antibodies, proteins and vaccines. It has

also started exploratory research in the fields of oncology, infectious diseases and platform

technologies. SHANVAC- B is the first Indian Hepatitis-B vaccine to pre-qualify for WHO approved

supply to UN agencies, globally. Today, Shantha caters to major international markets including Asia-

Pacific, Africa, Commonwealth of Independent States (CIS) and Latin America in addition to the United

Nations Children‘s Fund (UNICEF) and Pan American Health Organisation (PAHO). Based in

Hyderabad, Shantha Biotech became a part of the Sanofi-Aventis group in July 2009.




70

Vimta Labs Vimta Labs is India‘s leading contract research and testing organisation. Established in 1984, Vimta now serves several market leaders across the globe. The company has a team of 707 professionals comprising 442 scientists in various disciplines such as chemistry, pharmacy, medicine, microbiology, molecular biology and informatics. The team is slated to double in next three years. VIMTA is a multi-site organisation with more than 300,000 sq ft world-class laboratory facilities. Its facilities in Andhra Pradesh include a life sciences campus and central laboratory at Hyderabad along with Clinical Laboratories at Visakhapatnam.

Indian Immunologicals

Limited (IIL)

IIL produces a range of veterinary vaccines such as foot -and -mouth disease (FMD) vaccine, anti-rabies vaccine, bacterial vaccines, canine vaccines and a host of other combined vaccines. IIL's range of human vaccines comprises of rabies, Hepatitis B, measles, MMR and DPT. It has one of the leading research and development centres in India. The company has headquarters and manufacturing facilities in Hyderabad, an institute in Ooty and an overseas office in Vietnam.

PAREXEL Over the past 25 years, PAREXEL has developed significant expertise to assist clients in the worldwide pharmaceutical, biotechnology and medical device industries with the development and launch of their products in order to bring safe and effective treatments to the global marketplace for the patients who need them. Headquartered near Boston, Massachusetts, PAREXEL operates in 69 locations throughout 52 countries around the world, and has approximately 9,000 employees. It has offices located at Hyderabad and Bengaluru and offers contract services in clinical evaluation through to commercialisation and medical marketing to device industries.

Bharat Biotech

International Limited

(BBIL)

BBIL is a multidimensional biotechnology company specialising in product-oriented research, development and manufacturing of vaccines and bio-therapeutics. BBIL's state-of-the-art manufacturing plant is the largest of its kind in Asia-Pacific. The first bio-pharma facility in the country to be audited and approved by the Korean Food & Drugs Administration (KFDA), it is located at the Genome Valley, Hyderabad. Built with an investment of over US$ 22 million , the facility's manufacturing, control procedures and protocols, conform to the stringent standards laid down by internationally recognised institutions such as USFDA and WHO.




71

Biological E. Limited Biological E. manufactures sera and vaccines, oncology drugs, cardio-vascular, bulk drugs,

formulations and herbal products. The company has established alliances with world-renowned

pharma companies such as Evans Medical of the UK, Solvay & Cie of Belgium (veterinary products),

Pasteur Meraux Connaught of France (sera and vaccines) and ICI, an exclusive marketing tie-up for

animal health products. Biological E. Limited has several firsts to its credit. It was the first

pharmaceutical company to manufacture anti-TB drugs in India and the first private sector vaccine

manufacturer in the country. The company is investing approximately US$ 50 million towards the

development and expansion of infrastructure. State-of-the-art equipment is being installed in all

locations to meet the US FDA and European MEA standards in manufacturing, quality control and

pre-clinical activities. Another project underway is the modern biotech facility, with an investment

of US$ 21.7 million at the Genome Valley.

Novartis Novartis has presence in over 140 countries and employs 97,000 people. Has been present in India

for the last 60 years in healthcare sector. Setting up its healthcare-related IT/ITeS and R&D facility

in Hyderabad. The company has a development centre at Hyderabad which integrates development

franchises of the company though information technology. The facility also operates as a global

centre for marketing and sales, sourcing, business planning and analysis. In 2009-2010, the company

earned revenue of US$ 131 million.

Krebs Biochemicals &

Indisutries Limited

(KBIL)

KBIL was established in the year 1991 as a public limited company with the objective of establishing

commercially viable biotech processes with applications in medicine and agriculture industries. The

company has pioneered in fermentation technology over the last decade. KBIL manufacturing Unit-I

is located at Regadichelika village of the Nellore district. Products manufactured from Unit-I facility

are ephedrine, pseudoephedrine and their salts, which are used for making formulations for

respiratory ailments, viz., cough and cold .




72

Apparel and textiles

• The state is a leading producer of cotton, with a production of about 3.46 million tonnes in 2008-09. Medium grade and superior long staple varieties of cotton are predominantly grown in the state.

• The State Government has identified textile sector as one of the long term growth engines. To utilisepotential of the sector, the State Government has already established five apparel export parks (AEP) and seven textile parks. It proposes to establish another 15 AEPs in the state.

• There are over 80 spinning mills including a number of 100 per cent export-oriented units with state-of-the-art machinery, producing cotton, synthetic and blended yarns. There are 1,079 weaving units with a production capacity of 789 million metres of fabric per annum.

• The state has, moreover, emerged as a large textile processing centre. Over 100 units are set up in the state with a processing capacity of 13 million metres of cloth per annum.

• The number of power looms in the state aggregates to around 44,000 employing approximately 1,10,000 workers.

• Apparels, fabrics and furnishings have been identified as potential products by the state. It aims to achieve, annually, US$ 6 billion in textiles exports, and US$ 2 billion in handloom exports by 2010.

• The state aims to increase its domestic contributions for apparels and textile products to US$ 4.87 billion. The domestic sales of the state are expected to be around US$ 3 billion per annum by 2010.



73

• During March, 2005 and March 2010, the agricultural sector in the state witnessed a growth of 14.1 per cent and the total crop area increased to 12.2 million hectares by 2008-09.

• A variety of agro-climatic conditions in the state make it conducive for growing a variety of horticulture crops such as fruits, vegetables, spices, tuber crops, plantation crops and floriculture.

• The state is one of the large producer of rice in India. It is a leading producer of cash crops such as tobacco, groundnut, dry chilly, turmeric, oilseeds, cotton, sugar and jute.

• The state is one of the largest producers of horticulture products in India, production is expected to reach 22.9 million tonnes by 2020.

• The state produces some of the finest varieties of mangoes, grapes, guavas, papayas and bananas.

• It is the number one producer of sweet lime, lime, papaya, chilly, turmeric and palm oil.

• To achieve the growth envisaged for the agricultural sector, the state aims to attract investments of around US$ 17.07 billion by 2010, with the total investment until 2020 targeted at around US$ 39.02 billion.

Agri and processed food sector

Key players

• CongAgra Foods

• Cargill

• ITC

• APDDCF

• Ushodaya Enterprises

• Kraft foods



74

CongAgra Foods ConAgra Foods, US is one of the world‘s leading food companies. It has partnered with ITC

Agro and established an R&D centre to adapt food technologies to Indian conditions. The

company is now a US$ 320 million entity with a dominant market position in the edible oils and

branded foods sectors. Edible oil brands include Sundrop, Healthy World, ACT II and Rath.

Agro Tech Foods Limited, an affiliate of ConAgra Foods have their registered office at

Hyderabad.

Cargill Cargill maintains a number of businesses in India, with operations including the handling and

processing of a wide range of products, including refined oils, grain and oilseeds, sugar, cotton

and animal feed. In addition, Cargill‘s presence in India has been growing since it began a joint

venture operation in 1987. In 2006, Cargill entered into a joint venture and subsequently

owned a leading shrimp feed manufacturing farm in Rajahmundry. It has also entered a joint

venture project to set up a sugar refinery in the state.

ITC ITC is a large Indian business conglomerate with diverse business interests including agri-foods,

paper, fast moving consumer goods, lifestyle and retailing and hotels. In 2009-2010, total

revenue of the company was US$ 5.5 billion. A substantial part of ITC‘s agri-business is located

in Andhra Pradesh. The company has one unit each at Anaparti and Chirala and a research

centre in Rajamundhry. The company also runs its innovative internet based ―e-choupal‖

initiative in the state for the benefit of the farmers.

Agri and processed food sector – company profiles … (1/2)



75

Andhra Pradesh Dairy

Development Cooperative

Federation (APDDCF)

APDDCF runs 12 dairy plants and manufactures milk products under the Vijaya brand name.

These plants together have a capacity of 2,437 litres per day. Products include butter, UHT

milk, milk powder, ghee, flavoured milk, khoa, kulfi and processed cheese. It is one of the 15

dairy cooperatives operating under the National Dairy Development Board (NDDB).

Ushodaya Enterprises Established in 1980, the company manufactures products such as pickles, fruit and vegetable

purees, instant food mixes, etc., under the well known brand name – Priya. Headquartered in

Hyderabad, the Ramoji group company uses technology and is actively involved in research and

development of food products.

Kraftfoods Multinational branded food and beverages company, Kraft Foods, established a soft drink

manufacturing plant in Andhra Pradesh in 2001 and is currently working on a new agronomy

project.

Agri and processed food sector – company profiles … (2/2)



76

Forestry Fisheries

• Andhra Pradesh has

6.21 million hectares

of forest area, which

accounts for 22.6 per

cent of the total

geographical area of

the state.

• In 2009-2010,

contribution of

forestry to the GSDP

was estimated at US$

441 million.

• The fisheries sector has been identified as one of the six growth engines in agriculture sector under,

Vision-2020 of the state.

• Among Indian states, Andhra Pradesh is one of the largest producer of brackish-water shrimp and

fresh-water prawn production.

• In 2008-09, total production of fish in the state was 1.25 million tonnes compared to 1.05 million

tonnes a year ago. Production of fish comprised of around 960,000 tonnes of inland fish (including

fresh water prawn & brackish water shrimp) and around 290,000 tonnes of marine fish.

• The contribution of fisheries to GSDP in 2009-2010 was estimated to be US$ 2.4 billion, over 25 per

cent increase over 2008-09 .

• The Andhra Pradesh Government has entered into an agreement with the US-based World Tuna

Development International (WTDI) to develop tuna fishery in the Bay of Bengal.

• The State Government will invest US$ two million towards 51 per cent of the equity in the

proposed joint venture company named as Andhra Pradesh Marine Fisheries Development Limited

(APMFD) while WTDI will invest the remainder. The balance US$ 11.5 million will be taken as term

loans from banks.

Sources: Commodities Bureau Agriculture action plan 2009-2010, Department of Agriculture website, http://agri.ap.nic.in,

Andhra Pradesh economy in brief 2008, APDES website, www.apdes.ap.gov.in, news publications, Socio Economic Survey 2009-2010.

Agriculture and allied industry … (1/2)



77

Agriculture and allied industry … (2/2)


• Animal husbandry is rapidly expanding in the state and is playing a significant role in improving the rural economy.

• This sector provides gainful employment to a large number of small and marginal farmers and agricultural labourers and enhance their economic status.

• Activities of the animal husbandry department have been oriented towards improving health of livestock and increased production of milk, eggs and meat.

• As of March 2010, the state had 5,083 institutes supporting production in the animal husbandry sector and 5,320 institutes for health of livestock.

ProductProduction

(2008-09)

Production

(2007-08)

Milk

(million tonnes)9.6 8.9

Egg (in million) 18,344 17,588

Meat

(million tonnes)0.6 0.55

Sources: Socio Economic Survey of Andhra Pradesh, 2009-2010.


78

Petroleum, chemicals and petrochemicals

• According to the Ministry of Petroleum and Natural Gas, for 2008-09, the net natural gas production was about 1,524 million cu m. The state‘s Krishna-Godavari basin area has a total hydrocarbon resource base of 1,130 million metric tonnes.

• Andhra Pradesh is set to become the second Indian state after Gujarat to enter the oil and gas exploration and production segment through bids for oil and gas blocks under the Central Government‘s New Exploration Licensing Policy (NELP).

• The Andhra Pradesh Government decided to enter the oil and gas exploration and development sector and set up a special purpose vehicle (SPV), the Andhra Pradesh Gas Infrastructure Corp Limited as a joint venture between two state-owned entities. The infrastructure provider for industries in the state, APIIC, would hold 51 per cent in the SPV and AP Genco, would hold the balance.

• Hindustan Petroleum Corporation‘s Visakhapatnam plant has expanded its refined crude throughput from the existing 7.57 million tonnes in 2005-06 to 8.79 million tonnes in 2009-2010.

• In October 2009, the Department of Petroleum, Government of India, signed a memorandum of understanding with the Andhra Pradesh Government for setting up a petroleum, chemicals and petrochemicals investment region (PCPIR) in the Visakhapatnam-Kakinada region as an industrial cluster. The investments expected in the PCPIR are estimated to be around US$ 74.6 billion. The State Government has initiated process of appointing consultant for preparing master plan for the project.



79

Tourism

• Andhra Pradesh is known for its pristine beaches, sacred places of worship, lush green forests, spicy cuisine and hospitable people.

• With tourist attractions such as Charminar, Golconda Fort, and Ramoji Film City, Araku Valley, Borra Caves, Tirupati Balaji Temple, and Puttaparthi Saibaba, the state offers attractive investment opportunities to developers and investors.

• The state ranked seventh in international tourist arrivals and accounted for 5.8 per cent of the total international tourist arrivals in India in 2009. With 24.2 per cent share of domestic travelers, the state ranked first in domestic tourist arrivals.

• Nine projects have been sanctioned for the state by the Ministry of Tourism during 2008-09, at a project outlay of US$ 21 million.

• The State Government has identified Hyderabad, Visakhapatnam, Tirupati, Vijayawada, Nagarjunasagarand Warangal for tourism development.


770 789 795

0

200

400

600

800

1000

2007 2008 2009

Arrival of international tourist in Andhra Pradesh (in ‗000)

Arrival of domestic tourist in Andhra Pradesh (in million)

127.9 132.7

157.5

0

20

40

60

80

100

120

140

160

180

2007 2008 2009

Source: Ministry of Tourism, Government of India


80

Tourism – upcoming mega projects

• Kadapa heritage circuit

• Tirupati heritage circuit

• Charminar area

• Mega park near Nagarjuna Sagar

Sources: Directorate of Tourism and Directorate of

Economics and Statistics, Andhra Pradesh.



81

Leather

• The state is a major producer of hides and skins, producing about 19 million pieces per annum, constituting around 10 per cent of the country‘s output.

• The 34 large and medium tanneries in the state produce about 40 million sq ft of processed hides and skins per annum.

• The state has15 leather goods and footwear manufacturing units in the large- and medium-scale sector.

• The Government provides financial assistance in the form of investment grants to the extent of 30 per cent of cost of plant and machinery for SSI and 20 per cent of cost of plant and machinery for other units, subject to a ceiling of US$ 120,000 for technology up-gradation or/and expansion.

Leather Industries Development Corporation (LIDCAP)

LIDCAP is the nodal agency for leather industry

development in the state.

Plans to establish71 mini-industrial parks on 25 acres of

land for processing raw material, 16 medium industrial

parks of 100 acres each for processing semi-finished

leather, six mega industrial parks of more than 300 acres

each including an international leather complex at

Krishnapatnam (KILC).

KILC is a world class infrastructure for leather tanning and

leather processing. The project finance is supported by the

Government of India, Government of Andhra Pradesh and

has private participation in the SPV.

KILC is located at Krishnapatnam in the Nellore district in

an area of 412 acres near the sea coast. It is proposed that

KILC will house about 25 tanning units in a floor area of

250 acres of land and about 21 leather processing units

with capacities ranging between six and 25 tonnes and a

total capacity of 300 tonnes in a floor area of 220 acres.

Source: Leather sector in AP, ILC profile, LIDCAP website,

www.lidcap.org



82

Mines and minerals

• The state‘s mineral production was valued at US$ 2.7 billion in 2009-10.

• According to Ministry of Mines, in 2008-09, Andhra Pradesh is estimated to account for approximately 12.4 per cent to total mineral production in the country.

• Coal is the major mineral produced in the state which contributed 29.5 per cent of the total value of mineral production in the state.

• Production in iron ore increased by eight per cent, while that of manganese ore by 31 per cent and petroleum (crude) by 3.2 per cent in 2008-09.

• Production of silica sand increased by 49 per cent, ochre by 11 per cent, quartzite by 60 per cent, dolomite by 16 per cent, limestone by 16 per cent and coal 11 per cent in 2008-09.

Contribution to national minerals

resources (%) in the country

Barytes 94

Ball clay 63

Corundum 61

Diamond 40

Calcite 39

Mica 28

Garnet 26

Limestone 20

Sources: Indian mineral scenario - states, Ministry of Mines

website, www.mines.nic.in



http://www.mines.nic.in/

83

Gems and jewellery

• Hyderabad is one of the leading hubs for the jewellery sector in India. The state produces a wide array of precious- and semi- gems as well as pearls.

• The AP Gems and Jewellery Park has been developed on an area of 2.5 acres in Hyderabad with an investment of around US$ 12.68 to US$ 13.90 million.

• The park is a joint venture between the Phoenix Group, IOI Corporation and AP State Trading Corporation.

• It has been developed as a state-of-the-art facility in which the floor space will be sold to jewellers and pearl dealers.

Hyderabad Gems SEZ Limited (HGSEZ)

Situated at Hardware Park near the upcoming international

airport.

SEZ to be set up at a cost of about US$ 121.95 million. The

200-acre park will house more than 75 diamond, gold and

watch manufacturing units and will generate 50,000 new jobs.

An international trade centre, a world class convention

centre, plus an exhibition area will also be a part of the SEZ.

It is the first jewellery park to have an integrated

manufacturing and trading facility.



84

Other growth sectors … (1/2)

Hospitality and entertainment Leisure and entertainment

• Being a major tourist hub in the country, the state is making rapid

strides in the retail and entertainment segment.

• To attract new investments in the sector, the Government offers

various incentives including an investment subsidy of 20 per cent of

the project cost, subject to a maximum of US$ 50,000.

• To encourage up-gradation to international standards, selected

hotels will be offered an incentive of 15 per cent of the project cost.

• The sector is attracting investments in projects such as

world -class spas, entertainment centres, mega

shopping malls, multiplexes, business convention

centres and theme parks.

• Urban entertainment, including amusement parks, has

redefined leisure and entertainment activities in the

city.

Name PromotersProject cost

(US$ million)Location

Park Hyatt 7-Star hotel Gayatri Hi-Tech Hotels Limited 76.1 Banjara Hills, Hyderabad

Leela Palace Kempinsky hotel Hotel Leelaventure Limited 67.4 Hyderabad

Hotel projects under construction

Source: www.projectstoday.com



85

Other growth sectors … (2/2)

Retail Electronics hardware Semiconductors

• Organised retail is catching up fast with significant

mall development in the pipeline.

• Shopping malls are being developed in suburban

and peripheral areas followed by central business

district.

• Reliance Retail opened its first 'Reliance Fresh'

stores in Hyderabad and Secunderabad in late

2006.

• Reebok has opened its largest store in the world

in Hyderabad.

• GVK group opened ‗GVK one‘ a world-class

shopping space measuring 6,25,000 sq . ft in May

2009.

• ‗GVK one‘ also hosts a 1,200-seat INOX

multiplex along with a themed entertainment

centre ‗Funzone‘.

• Key segments within the electronics

hardware industries in the state:

• Telecommunications

• Industrial electronics

• Test and measuring equipment

• Computer and consumer electronics

• Strategic electronics

• There is immense scope for investments

in the fields of nanotechnology,

semiconductors, computer peripherals,

appliances, precision engineering,

integrated circuits, large scale

integration chips (LSICs) and very large

scale integration chips (VLSICs).

• An investment of US$ 3

billion has been announced

for setting up a fabrication

unit in the Fab City,

Hyderabad.

• Fab City has been allotted

1,200 acres, close to the

new international airport.

• The Electronics Hardware

Policy of the state offers

various incentives such as

exemptions,

reimbursements, facilitating

technical education, etc. to

promote the industry.

Sources: News publications, "Urban infrastructure", GVK group website, www.gvk.com



86

Major industrial projects being implemented

Project Sector PromoterInvestment


Pranahita-Chevella lift irrigation scheme Irrigation Government of Andhra Pradesh 8,369.6 Bejjur, Adilabad

Krishnapatnam ultra-mega power project Power Coastal Andhra Power Limited 3,695.7 Krishnapatnam,

Nellore

Krishnapatnam power project (1,600 MW) Power AP Genco 1,813.0 Nellore

Integrated steel project, Phase-I Steel Bramhani Industries Limited 978.3 Cuddapah

Galeru Nagari Sujala Sravanthi irrigation

projectIrrigation Government of Andhra Pradesh 3,635.0

Cuddapah,

Nellore,

Chittoor

Solar energy equipment project (120 MW) Power X L Telecom Limited 782.61 Shamsabad,

Hyderabad

Diesel hydro treater project - Visakh Refinery RefineryHindustan Petroleum Corporation

Limited (HPCL)782.0 Visakhapatnam

Polavaram irrigation project Irrigation Government of Andhra Pradesh 658.7 West Godavari

Greater Hyderabad growth corridor project Roads Hyderabad Growth Corridor Limited 652.2 Medak, Ranga

Reddy

Godavari drinking water supply schemeWater

supplyHyderabad Metro Water Supply &

Sewerage Board652.2 -

Finished steel project Steel Rashtriya Ispat Nigam Limited 652.2 Visakhapatnam




87

Key industrial projects being planned

Project Sector PromoterInvestment


Hyderabad elevated-MRTS project TransportHyderabad Metro Rail

Limited2,637.4 Hyderabad

Kakinada refinery project RefineryKakinada Refinery &

Petrochemicals Limited3,260.9

Kakinada, East

Godavari

Bhavanapadu coal-based power project PowerEast Coast Energy Private

Limited2,407.6 Srikakulam

Alumina refinery project AluminiumJindal South West

Aluminium Limited1,956.5 Boddavara

Multi-product Industrial Park Industrial park

Yeswanth Industrial

Infrastructure Projects

Private Limited

1,652.2 Perupalem

Alumina refinery project AluminiumNational Aluminium Co

Limited1,521.7 -

Coal-based power project Power

Sheshadri Power &

Infrastructure Private

Limited

1,521.7 Hindupur

Business complex ConstructionCBD Tower Private

Limited1,521.7 Hyderabad

Road up-gradation (Icchapuram-

Srikakulam-Ankapalli-Rajahmundary)

project

RoadsNational Highways

Authority of India771.7 Multiple locations

Kakatiya power project, Stage-II Power AP Genco 645.4 Warangal




88

Contents








89

S NoApprovals and

clearances requiredRespective departments of state Estimated time

1 Registration, IEM, Industrial licenses Registrar of firms 7 days

2Allotment of land/shed in industrial estates or industrial areas

Andhra Pradesh Industrial Development Corporation

7 days for up to 1,000 sq m

21 days for above 1,000 sq m

3Acquisition and alienation of government lands

Chief Commissioner of Land Administration (CCLA)

45 days

4 Site and building plan approval

Panchayat Raj Department

7 daysUrban Development Authority

Town and Country Planning

Municipality

5 Change of land use

Urban Development Authority

45 daysTown and Country Planning

Municipality

6

Consent for establishment under pollution control

Green

AP Pollution Control Board

7 days

Orange 21 days

Red 45 days

Key approvals required … (1/2)

DOING BUSINESS IN ANDHRA PRADESH

Source: Commissionerate of Industries, Government of Andhra Pradesh


90

Key approvals required … (2/2)

S NoApprovals and

clearances requiredRespective departments of state Estimated time

7

Consent for

operation under

pollution control

Green

AP Pollution Control Board

7 days

Orange 21 days

Red 45 days

8 No-objection certificate for fire safety Fire Services Department 15 days

9 Excise registration Excise Department 14 days

10 VAT/CST Registration Commercial Taxes Department 7 days

11 Power feasibilityPower distribution companies

7 days

12 Power connection 23 days

13 Approval of factory plansFactories Department

7 days

14 Factory license 7 days

15 Sanction of water supply Hyderabad Metro Water Supply and Sewerage Board

7 days

16 Water connection 23 days

17Permission to draw water from rivers and/or public tanks

Irrigation Department 30 days


Source: Commissionerate of Industries, Government of Andhra Pradesh


91

Cost of doing business in Andhra Pradesh

Parameter Cost

Land price (US$ per sq m) 20 to 200

Labour (US$ per man year) 825 to1,250

Lease rent (US cents per sq ft) 36.6 to 61.0

Electricity (US cents per unit)

Commercial: 15.8

Industrial: 9.8 to10.8

Residential rent (US cents per sq ft per month) 12.6 to 62.5

Five-star hotel room (US$ per night) 73.0 to 512.0

Water (US cents per 1,000 litres) Commercial: 50.0

Industrial: 62.5

Sources: Andhra Pradesh Government websites and industry sources



92

Single-window approval mechanism

• Andhra Pradesh is the first state in the country to have enacted the Industrial Single Window Clearance Act No 17 of 2002. The Act made it compulsory for new industries to register with the single-window to obtain clearances quickly. It also simplified procedures for getting industrial clearances.

• Committees were constituted at district and state levels to communicate to the applicant, the status of their clearances. It has set time slots for issuing clearances and incorporated a provision for deemed approval after the expiry of time limit.

• District level committees can clear investments not exceeding US$ 1,054,852. State level committees can clear those exceeding US$ 1,054,852.

• Above the district and state level committees is an empowered committee headed by the Chief Secretary of the State Government who reviews and monitors disposal of applications. Overall, a State Board under the chairmanship of the Chief Minister oversees the progress of the scheme.

• The maximum time taken to issue clearance of applications at all stages is 45 days. Violation of provisions of the Act made either through self-assessment or otherwise would invite a penalty of US$ 108 in the first instance and US$ 217 in the second instance.



93

Key investment promotion offices … (1/2)

State Investment Promotion Board (SIPB)

The SIPB has been created by the Government of Andhra Pradesh with the state Chief Minister as Chairman and members

consisting of the Finance Minister , Minister for Revenue, Minister for Major Industries, Minister for Energy, and other ministers

connected with specific projects as special invitees as well as the Chief Secretary to Government as member or convener.

The SIPB meets once a month to make final decisions regarding investments and promotion of industries in Andhra Pradesh and

for approval of the projects. The project proposals and other issues regarding investments and promotion of industries in Andhra

Pradesh are processed by the Industries & Commerce Department and submitted to the Board. The Industries & Commerce

Department also circulates the project proposals, with detailed notes, to all the concerned departments, for their action. The

detailed note along with the reaction of the concerned departments are presented and discussed in the meeting of the Board,

before taking a final decision. It is ensured that all final and necessary decisions are given for the industrial projects within a period

of four weeks.

The Industries & Commerce Department issues a single order on each project, incorporating the decisions of the Board. The

concerned Departments of Secretariat issue further necessary orders, with which they are concerned, on the decisions taken by

the SIPB.

Major Industries, Commerce and Export promotion Ministry

• Controls the office of the Principal Secretary, Industries & Commerce, Commissioner of Industrial Promotion

• They are responsible for SSIs and control the office of the Commissioner of Industries & Export Promotion, Commissioner

Handlooms and Textiles, Commissioner for Sugar and Director, Mines and Geology.

• The Industries & Commerce department is headed by the Industries Minister and is controlled by the Principal Secretary.



94

Key investment promotion offices … (2/2)

Corporations under Industries and Commerce Department

Andhra Pradesh Industrial Development Corporation (APIDC)

Andhra Pradesh Industrial Infrastructure Corporation (APIIC)

Andhra Pradesh Mineral Development Corporation (APMDC)

Andhra Pradesh State Finance Corporation (APSFC)

Andhra Pradesh State Trading Corporation (APSTC)

Andhra Pradesh State Handloom Weavers Co-operative Society Limited (APCO)

Leather Industries Development Corporation of Andhra Pradesh (LIDCAP)

Andhra Pradesh Handicrafts Development Corporation (APHDC)

Andhra Pradesh Khadi & Village Industries Board (KVIB)



95

Contact list

Key agency Contact Information

AP Industrial Infrastructure Corporation

6th Floor, Parisrama Bhavan

Fateh Maidan Road, Basheerbagh

Hyderabad - 500 004

Phone: 91-40-2323 7622, 2321 2798

Fax: 91-40-2323 3393, 2323 3251

E-mail: [email protected]

Website: www.apiic.in

Department of Industries and Commerce

Industries and Commerce Department

2nd Floor, D Block, Room No-348A

Secretariat

Hyderabad - 500022

Phone: 91-040-23454449

Fax: 91-040-23452985

E-mail: [email protected]

Website: www.industriesportal.apcgg.gov.in



mailto:[email protected]

mailto:[email protected]

96

Annexure

Year INR equivalent of one US$

2000 46.6

2001 48.3

2002 48.0

2003 45.6

2004 43.7

2005 45.2

2006 45.0

2007 42.0

2008 40.2

2009 46.0

2010 47.4

Exchange rates

Averages for the year



97

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prepared by IMaCS in consultation with IBEF.

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