Naidu sets the ball rolling on investment
True to his word that he will get industrial investment in Andhra Pradesh, Chief Minister Nara Chandrababu Naidu has set the ball rolling with the government clearing the proposals of manufacturing companies. The estimated value of the investment by KCP Ltd, Chettinad Cement, the Rain group, Vishwaa Apparels, Indo Count Industries and Mohan Spintex is Rs. 3,808 crores. The investment proposals were cleared recently by the State Investment Promotion Board headed by Mr. Naidu himself.
The biggest chunk of the current investment proposals is headed towards Visakhapatnam district. The Rs. 1,350 crore investment would be by Chettinad Cement, which is proposing to set up cement grinding and manufacturing plants at Tallapalem, Gytulapalem and Narsapuram villages in Visakhapatnam and at Pedagarlapadu village in Guntur district. The Chettinad Cement project is expected to create 1,250 people directly. Chettinad Cement has indicated that commercial production at the production centres is expected by March 2019.
KCP Ltd., a diversified business group, will be setting up a new cement plant near its existing plant in Muktyala village in Krishna district. The new plant will entail an investment of Rs 531.61 crores, and employ about 100 people directly, besides generating another 1,900 jobs indirectly, according to the SIPB. KCP Ltd already has an existing 1.86 tonnes per annum cement plant in Muktyala village, which it commissioned in 2011. The new plant is expected to generate Rs174.14 crore of revenue in its first year and Rs403 crore by its fifth year.
According to the SIPB, apart from approving the investment proposals, Mr. Naidu also Naidu also reviewed the status of all the memorandums of understanding (MoUs) signed by various departments. The SIPB said that a total of 1,569 projects are being tracked by 17 departments with a committed investment of Rs16, 87,845 crore in the State. Out of the total projects, 343 have gone into the production stage, the SIPB said.
The new investment proposals are welcome, because they have the potential of creating well-paying jobs in the manufacturing sector. According to some economic analysts, one manufacturing industry job has the potential to create at least four indirect jobs. This is called the multiplier effect. The industry which has the highest multiplier effect is the oil and gas industry, where one job can create 6.9 indirect jobs. The energy sector is followed by the mining sector, where one direct job can create 4.4 indirect jobs, according to the U.S. Bureau of Economic Analysis.
Mr. Naidu and his team could perhaps turn their attention and focus to the mining sector, because Andhra Pradesh has huge reserves of coal, iron ore and bauxite to name three. “The total value of mineral production remained at Rs. 16587.51 Crores in 2010-11. Coal, natural gas, iron ore, limestone and barytes accounted for 53.32% of the total value whereas coal alone contributed 41.35% of the total value. Andhra Pradesh contributed 7.81% to the total production during 2010-11 in Indian mineral sector. The value of minor minerals remained at Rs. 7550 Crores in 2010-11,” according to the Mining Information Clearinghouse of India (MICI).