The policy aims to attract Rs 300,000 million worth of investments, besides promoting the development of 20 EMCs across the state
By Richa Chakravarty
Wednesday, October 29. 2014: The government of Andhra Pradesh recently unveiled its new Electronics Policy 2014-2020 —‘Re-Imagining Andhra Pradesh: The role of e-Governance, Electronics and IT.’ Given the comprehensive and holistic nature of the National Policy on Electronics (NPE) 2012, the Andhra Pradesh (AP) government intends to fully leverage the NPE to build upon its own strengths.
Targeting a slice of the US$ 400 billion domestic electronics market, the AP government has identified thrust areas like semiconductors, mobiles, LEDs, smart meters, FPD TVs, tablets, base stations, smartcards and sensors. It has notified the electronics hardware industry as an essential service under the Andhra Pradesh Essential Services Maintenance Act.
Promoting ‘Electronics AP’ through clusters and hardware parks
The AP electronics policy aims to attract Rs 300,000 million (US$ 5 billion) worth of investments, besides creating 0.4 million jobs by 2020. To promote the electronics hardware industry and Brand AP, the government has proposed the development of 20 EMCs across the state.
Apart from giving an impetus to electronics clusters, the state government envisages developing an Information Technology and Investment Region (ITIR) in Visakhapatnam. There is a proposal to develop this city into a ‘mega electronics hub’ for the state. Along with this, the state government will facilitate the setting up of the electronics hardware park in Kakinada and will develop ancillary industries in Kurnool. The park will have state of the art infrastructure with all basic amenities such as internal roads, water, power and other common facilities for the investors. Additional incentives are also earmarked for mega projects with a minimum investment of Rs 2500 million or for those that create employment for more than 2000 people within five years. Interestingly, the policy includes a provision that in case the required approvals are not granted within four weeks of receiving a complete and valid application, the approval shall be deemed to have been granted.
Though the policy so announced is in favour of manufacturers, many in the industry are still waiting for the bigger announcement regarding the ‘special category status’. “Ten years ago, AP had introduced an electronics policy; with the announcement of this new policy, the state has kept up with the tempo. However, the industry is keen to understand whether the state will receive a ‘special category status’, and whether this will be enjoyed by the whole state across industries or be applicable only in certain geographical pockets. Andhra Pradesh, as a state, was stripped of all its industrial capacity when Telangana was formed, except for a few industries in Visakhapatnam. AP’s industrial base now has to be built up from scratch; so, as a state, we deserve a policy that will lead to rapid industrialisation. Giving it the special category status will hasten the process,” says Vijay Kumar Gupta, CEO, Kwality Photonics P Ltd.
Fiscal and non-fiscal incentives
While the state government already offers various non-fiscal incentives like the Factories Act 1948 and the AP Shops and Establishments Act 1988, it will now also offer extensive fiscal incentives to attract companies to set up their base in AP. According to the policy, electronics companies will be eligible for 100 per cent reimbursement of stamp duty, transfer duty and the registration fee paid on sale/lease deeds on the first transaction and 50 per cent thereof on the second transaction. Also, 100 per cent tax reimbursement of VAT/CST will be offered to new units starting after the date of issue of the policy, for a period of five years. In addition to this, a subsidy on power is available for micro, small, medium and larger scale units, depending upon the size of the business. The subsidy would range from 50, 40, 25 and 10 per cent, respectively, for a period of five years. Along with this, any new electronic hardware units, after coming into commercial operations will also be entitled for 100 per cent exemption on electricity duty for a period of five years.
Infrastructure and capacity building
In order to encourage units to adopt renewable energy, the state government has plans for electricity duty exemption for those companies where a minimum of 40 per cent of power requirements are met through renewable sources.
As for skills creation, the policy aims at producing 250 PhDs in electronics by 2018. A high level, empowered ‘single window clearance unit’ will also be created, which will be supported by a state of the art centralised round the clock help desk. Besides, a joint government-industry committee will be created to market India and attract investments into the country.
Finally, the state government has proposed an annual mega electronics event in partnership with the industry to showcase and promote the electronics industry, besides setting up ‘Electronics Bazaars’ at Visakhapatnam, Vijayawada and Tirupati, which could act as G2B, B2B, B2G and B2C platforms to market electronic products. Also, an autonomous empowered mission for electronics and IT promotion will be set up at Visakhapatnam for faster clearances. It will be headed by a technocrat and will have three experts in electronics and IT, two academicians, and an expert in marketing and promotion.
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Major incentives |
Thrust areas
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