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Japanese Cos keen on VK-PCPIR: Rajat Kumar

Jayarama Emani

With the state’s new industrial policy expected to be out soon and AP scouting for big investors, Dr. Rajat Kumar, a senior IAS officer has his task cut out i.e. to make AP attractive enough so that scours of investments can flow into AP.
Daunting as it may sound, but Dr. Kumar armed with a Bachelor of Technology degree in Mechanical Engineering from the prestigious Indian Institute of Technology, a PhD in Economics from Osmania University, and a Masters in International Development from Harvard University could well be the man to give an impetus to AP’s industrial scenario.
A recipient of the Asia Pacific Environmental Fellowship in 2003 and the Joint Japan-World Bank Scholarship in 2005 he has a rich international experience having worked with the World Bank on various assignments as well as on independent short term consultancies in the USA and Europe.
As The Commissioner of Industry, Commerce and Export Promotion of Andhra Pradesh he is responsible for the registration and development of industries in the state. As the chairman of the state level Single Window Committee he oversees the granting of all permissions, licenses and clearances for setting up and operating industries in Andhra Pradesh. He also administers the provisions of the Industrial Incentives and Promotion Policy of the Govt. of AP, and the MSME Act and the various schemes of the Dept. of Commerce of the Government of India.

Vizag Industrial Scan caught up with the Commissioner of Industries in order to get a sense of what the industry/investors could expect from the upcoming industrial policy.

Where does AP stand in terms of Manufacturing?
AP’s potential is tremendous however after bifurcation, it has a lot more catching up to do. The contribution of the manufacturing sector to the GDP is lower by 4 to 5 percent as compared to the country average.
So we are looking at promoting industries especially the manufacturing industries in a big way. The first step towards this will be the announcement of the new Industrial Policy within the next 100 days and a Single-Window Act (being developed by Deloitte Consulting) which will be a benchmark not only for other states in the country but for all the nations across the globe.

What cities in the new state are going to see a major impact of Industrial development? Also could you elaborate on the upcoming industrial policy?
Two of the major initiatives that have been taken up with external participation right now is the Visakhapatnam-Chennai industrial corridor which is being developed by the Asian Development Bank and Chennai-Bangalore industrial corridor wherein we have three districts Nellore, Chittoor and Ananthapur coming under this belt.
We plan to develop industrial units in these districts starting anywhere from 500 acres to 2000 acres and linking these clusters to any of the major towns or develop the same into a industrial hub and link it to a “Green” or “Smart City.” For example, Krishnapatnam with its port and other facilities has been announced as one of the “Smart Cities” in the Union Budget. For every part in Andhra Pradesh that has large chunks of land, the Government is looking at linking them to a highway, a Railway junction or a port and every minute detail is being examined to come up with major initiatives on this front.
The focus in also on internal infrastructure also like common effluent plants, laboratories whose presence is essential in the industrial areas. All these issues or topics will be part of the Industrial Policy which would be very much investor friendly.
Promotion of knowledge-based industries and incubation companies is also high on the agenda. Incubation hubs will be developed in major towns like Visakhapatnam, Vijayawada, Tirupati and Kakinada where we have IT workforce in plenty.
One more important feature of the Industrial Policy will be that the thrust industries will have a policy conducive to that industry while infrastructure development (with inputs from ADB experts) remains the common agenda.

What are some of the key potential sectors in the state?
Agri-business and Food Processing industries are the two sectors that will drive industrial development in the short and the medium-term. With the Chief Minister announcing setting up fruit-processing units in every district, the potential for Food Processing industry is pretty high.
Cotton and Yarn industry towards the South of the state starting from Vijayawada and Guntur will not only expand the industry but will add value and impetus to the investment in this sector and make way for export-oriented centers etc. Engineering industry especially Precision Engineering Industry for Defence and Aviation will develop in Andhra Pradesh. Some minerals are specific to Andhra Pradesh like quality Limestone and so industries on those lines like Cement will add to industrial development.
Vizag, Vijayawada and Tirupati the three “Smart Cities” will give boost to Infrastructure Industry.
The IT industry workforce is also fairly knowledgeable and we are on keen on tapping this potential. In the Industrial Policy we are planning to upgrade infrastructure in the regions where industry has flourished to a certain extent initially.

 Have there been any major interests for investments in the state post bifurcation? 
Well it is too early to talk up investments and companies that have evinced interest in the new State as they are on the look-out for various land options in the State, some of the recent projects include Berger Paints setting up one of their largest units in Hindupur, we have Pepsi and Isuzu that have come up in Sri City in Nellore, GMR Group in Kakinada and so on.

What is the status on VK PCPIR?
There is no doubt that the Visakhapatnam- Kakinada Petroleum and Petrochemicals investment region is a high potential corridor. The only concern was on finalizing the anchor client. However, the Government of India in its Re-organization Act has said that it will look at making HPCL the anchor company for this area.
Once the cracker unit is established the downstream units will automatically come. Another crucial piece of information pertaining to this corridor is that a lot of Japanese companies are looking at this region for investments.

Power is a serious problem that the industry in this region faces. How soon do you feel we would be power surplus?
We will be power sufficient soon. A lot of tertiary factors like gas pricing, coal production and bad monsoons have added to power crisis.
Otherwise the recent statement by the Chief Minister that AP will be zero power deficient state is a bold statement. With the North-South power corridor also working, we will be able to meet the power requirements adequately in the short and medium term. For the long term requirements, power is a major thrust areas for the Industrial Policy.

There are a lot of concerns that have been raised by industry in terms of the operational methods of APIIC. It is not industry friendly they say. What would you tell industry?
Certainly APIIC has to become more progressive in its approach given the high potential for growth. All the mega projects need active participation from APIIC. I will not say that APIIC has not done anything so far, it has done enough in terms of industrial park and so on where private money would not have gone if the government had not stepped in.
Some of the following steps need to be taken up by APIIC. Firstly, improve the existing infrastructure in the industrial parks. Second, become more pro-active towards investing community by updating our Website and become getting more consistent in appropriate allotment of land through transparency. All I can say is many of these issues are being addressed.

What are the steps you are taking to encourage the development of ancillary units in the state in order to supply to larger industries?
Ancillary industries play a key role in industrial development. For example, lot of development took place in and around a PSU giant like Vizag Steel Plant. Similarly for the Isuzu Plant in Sri City, 20 of the big ancillary companies are in talks with us including NHK Springs which is a big group. Ancillary industries create lot of employment and they will find a special mention in our Industrial Policy.

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