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Apollo vrooms into AP

A.K. Sabharwal

Mr N. Chandrababu Naidu, the chief minister of Andhra Pradesh, continues to walk the talk.  The recent decision by Apollo Tyres Limited, a home-grown tyre manufacturer to set up a tyre production unit in Chinnapandur village in Chittoor district of Andhra Pradesh, is yet another milestone in the state’s industrialization.
Apollo will be investing, in phases, Rs. 3,000 crores to set up the state-of-the-art manufacturing facility in Andhra Pradesh, its fifth in the country; the company currently has two manufacturing units in Kerala, one in Gujarat and one in Tamil Nadu.
Clearly, Apollo has zeroed in on Andhra Pradesh because of the proactive policies of Mr. Naidu’s government.
While getting Apollo to ride into the State is a welcome development, Mr. Naidu, however, must resist the temptation to make Apollo a talking point. For, clearly a lot more needs to be done to make Andhra Pradesh the manufacturing hub that Mr. Naidu has envisaged.
The challenges to realize the dream are daunting. To begin with, the industrial climate in India, and around the world, has been slowing down for the past few years, ever since the financial crisis in the West in 2007. Second, with China investing humongous amounts of money to create the factory floor of the world, there is a significant overhang in manufacturing facilities. And with China’s economy itself showing signs of fatigue, it makes little sense for businesses to invest in new manufacturing units. Also, many businesses setting up manufacturing units from the ground up have the choice, which many exercise, of bringing in robots to perform many of the functions that humans used to do earlier.
So, while a manufacturing company may indeed set up a spanking new facility, it may not employ many people because of automation. That is what is called “jobless growth”.
Rising automation is indeed a scary prospect for the job market, but I believe it is better to have a manufacturing unit, with few jobs, than not having such units at all. This is because while a manufacturing unit may not require hundreds of workers, it cannot do without the services to support such activity. Support services like transportation, logistics, utilities and so on. It could be in the services sector that the jobs will get created.
Mr. Naidu has 30 months—till the next election to the Andhra Pradesh Vidhan Sabha, due in 2019—to prove that Apollo Tyres is not a one-off. He and his team of ministers and bureaucrats will need to step on the gas, as it were, to get more companies to set up manufacturing units in the State. Mr. Naidu can handily leverage the recent survey which listed the two Telugu-speaking states, Andhra Pradesh and Telangana, as the two states topping the investment-friendly Ease of Doing Business.
This newspaper has always believed that Mr. Naidu has what it takes to promote Andhra Pradesh as an investment destination.
He should use Apollo Tyres’ decision as the start-off point to attract more such industrial manufacturing business into the state. To use Apollo Tyres’ tag line, Mr. Naidu should “Go the —————— distance”.

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