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Andhra Pradesh state economic survey
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Andhra Pradesh:

Leading the
transformation

February 2018

KPMG.com/in
Disclaimer:
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A day in Andhra Pradesh
~2,500
PMJDY accounts
opened daily 42.9K
under PMJDY9 tonnes foodgrains
produced1

9.0-9.5 MU
average solar 11,962
power generated APSRTC buses
(FY2017-18)8 on the road2

63 MW 2,925
power generated vehicles
from the 6,440 registered
tonnes of municipal
waste7
Projects are under construction'

USD400k
saved under

137 MU UJALA scheme


from LED bulbs3
energy
consumed6
460k
350k average tourist
footfall4
tonnes of cargo
handled by ports
in Andhra5

*Exchange rate of 1USD=INR65 has been used throughout the document for conversion purposes

1. AP socio-economic survey 2016-17 7. Andhra Pradesh first state in the country to become Open Defecation Free in urban areas, PIB, 30 April
2. AP socio-economic survey 2016-17 2016
3. After Energy Efficient Bulbs, Government Launches National Programmes for Smart Pumps for Farmers 8. Energy Department, Government of Andhra Pradesh
and Energy Efficient Fans, Press Information Bureau (PIB), 7 April 2016 9. Pradhan Mantri Jan Dhan Yojana (PMJDY), Progress Report, accessed on 13 February 2018
4. Andhra Pradesh tourism, Footfall Dashboard
5. Ministry of Shipping, Government of India
6. AP is power surplus from shortage of 22.5 mu per day, The Hindu BusinessLine, 14 April 2016

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The journey so far
Dec Oct
2014 Jan
2015 2016 Mar
2016

Capital Region
Development Foundation
stone for Andhra Private
Authority Act, 2014 Universities Pattiseema Lift
for development Pradesh's new
capital city Act for Irrigation Project –
of new capital in establishment Fastest built mega
Amaravati Amaravati was
laid. Amravati is and regulation irrigation project by
envisaged as of private inter-linking of two
world class universities rivers enters Limca
people’s capital Book of Records1
with a capability
of accommodating
10 million
population by
2035.

33,000 acres of
Land pooled
within 60 days of
launching the 2016
Land Pooling
Scheme (LPS)
2016

First state to become


‘Open Defecation Free’
(ODF) in urban areas

1. Pattiseema Lift Irrigation Project completed in record 1 year time; enters Limca Book of Records, India
Today Story, 25 March 2017

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Second state to achieve 100 per cent
electrification and become Power Surplus
(Installed Capacity 22,069.36 MW by 2017)

Jun
2016

Sep Sunrise AP Vision 2029 – foundation


2016 of happy and globally competitive society

Dec
2016

Andhra Pradesh Fiber Grid launched


by the hon’ble President of India, Shri
Ram Nath Kovind – >23,000 kms2 of
First in ease of fiber laid for high speed internet to
doing business by 14.5 million households, 12,198
World Bank Panchayats and 60,000 schools3

Aug
2017 Oct Dec
2017 2017

Lowest Transmission
& Distribution (T&D) Commissioning of World’s
losses in the country Largest single-location
solar park of 1,000 MW

2. AP Fiber Limited as on November 2017


3. President Kovind to launch Andhra Fiber Grid project, ET Telecom, 26 December 2017

© 2018 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved
Andhra Pradesh: When the
rubber hits the road 1
Key achievements since the state's bifurcation in June 2014

Ranked #1 in 2016 in Golden Peacock Award Ranked #1


ease of doing business to Hon’ble Chief Minister, in 2015-16
by DIPP and the Chandrababu Naidu by RBI in attracting
World Bank* for ‘Global leadership private sector
in public service investment
and economic
transformation’

Ranked #1 in 2017 in Ranked #3 Ranked #1 in


implementation of in global marine exports
energy efficiency and shrimp
conservation production
measures

Amongst top 3 states Ranked #3 in 2017 in Ranked #1


in manufacturing business investment in barytes
in FY2016-17 potential by NCAER production

1. Press Release on “Assessment of State Implementation of Business Reforms 2016” by DIPP and World
Bank, Nov 2016
RBI Bulletin, September 2016
Report by Investment Monitor FDI Intelligence, a division of The Financial Times

*Andhra Pradesh’s rank in the ease of doing business rankings in 2016 refers to the ‘Assessment of State Implementation of Business Reforms 2016’

© 2018 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
First state to announce Vizag ranked #3 #3 in limestone
construction of dredging among cleanest cities production
harbour, one of its kind in of India in Swachh in the country
the country Survekshan 2017

Lowest T&D First state to complete Received 26 awards


losses in large scale implementation for state’s power sector
the country in of fiber trunk across in FY2015-17
FY2016-17 >23,000 KMs
within a
record time
of 9 months

>10 per cent growth across Best national tourism State of the year
agriculture, manufacturing award by GoI award for 2017
and services sector by CNBC

© 2018 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved
© 2018 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
Foreword
Andhra Pradesh has had a commendable energy, to name a few. Andhra Pradesh also has
transformation story. From a new state in 2014 to many superlatives to its credit - Asia’s biggest
one of the fastest growing states in the country integrated control and command centre, first
with double-digit GSDP growth rate, Andhra state in the country to implement the Global
Pradesh has made considerable progress. Competitiveness Index (GCI), first state in South
India to offer 24x7 quality and reliable power to
Vision can be effectively achieved if backed up
industry – to name a few.
by robust policy environment, efficient action
plan and strong governance. Andhra Pradesh’s The state is steadily marching ahead to become
efforts are reflected in its robust and forward India’s ‘Sunrise State’ and we believe this
looking policy framework, development initiatives report by KPMG in India will provide you a
introduced to achieve the vision and transparent fair understanding of the state’s progress and
and efficient monitoring of the progress. investment potential, thereby presenting you an
opportunity for forging strong partnerships.
Leveraging on its strategic locational advantage,
Andhra Pradesh has focused on equitable As the state navigates its path to a higher growth
development by involving all districts in its trajectory, we hope this report will be a valuable
transformation journey. Investments are spread resource for companies – Indian and foreign
across the state and job opportunities are alike – to find ways in which they can share in the
emerging for people across all strata of society. dividend generated by the state’s growth, while
Andhra Pradesh has been ranked as the No. 1 making their own contribution to the economy’s
state in India on ease of doing business reforms transformation.
in 2016 by DIPP and the World Bank, which is
KPMG in India is committed to playing its role in
testimony to the conducive business environment
the state’s transformation.
prevailing in the state.
I am happy to note that the state has attracted
strategic investments in various sectors such
as auto, electronics, textiles, pharmaceuticals,
aerospace and defence, minerals, renewable

Nilaya Varma
Arun M. Kumar Partner and Head
Chairman and CEO Government and Healthcare
KPMG in India KPMG in India

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Among the world’s most
ambitious infrastructure
building programmes
3 smart cities
6 operational ports
8 proposed ports
6 operational airports
6 proposed airports
2 industrial corridors
1 potential Coastal Economic Zone
44 new industrial clusters
9 thrust sectors
300 industrial parks
1,000,000-acre GIS-enabled land bank

© 2018 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
© 2018 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved
Table of
contents

© 2018 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
Andhra Pradesh - Strong fundamentals, unprecedented growth 01
Transforming into ‘sunrise state’: Moving the needle 07
Focus sectors 29
Way forward 67

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1

Andhra Pradesh -
Strong fundamentals,
unprecedented
growth

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2

Unlocking the demographic dividend


The population of Andhra Pradesh was 49.4 million Andhra Pradesh’s demographic dividend (age and
(as per census carried out in 2011), which accounts gender pyramid)
for 4.08 percent of the country’s population making
it the tenth most populous state in the country.
Projecting the state population in the future based
on the observed growth rates, it is estimated that 2011
by 2026 the size of the population will be 55.5
million. The state’s working population (in the age- Age
group of 20-59 years) is projected to increase to
59 per cent of the total population in 202601. With Male Female
the state having higher workforce and labour force
70+ 10.3% of
participation rate than all India averages, its economic population
potential depends greatly on harnessing the power 60-69
of its talented pool of youth to reap its demographic
dividend. Thus, the potential of the state depends on 50-59
harnessing the power of its talented pool of youth to 40-49
reap its demographic dividend. 54.9% of
population
30-39
Workforce participation rates per 1000 population
20-29
- Rural (2011-12)
10-19
34.8% of
population
0-9
600
500 15% 10% 5% 0% 5% 10% 15%
WFPR

400
300
200
100 2026
0
AP India AP India AP India
Age
Male Female All
Male Female

70+
14.5% of
population
Workforce participation rates per 1000 population 60-69
- Urban (2011-12)
50-59

40-49
59.0% of
600 30-39 population
500
20-29
WFPR

400
300
10-19
200 26.5% of
100 0-9 population
0
AP India AP India AP India 15% 10% 5% 0% 5% 10% 15%

Male Female All

01. Sunrise Andhra Pradesh Vision 2029, Vision Management Unit INNOVATION APSDPS, Planning Depart-
ment, Government of Andhra Pradesh, July 2017

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3

Strong fundamentals, vibrant economy


Focused and planned fiscal management has Sustained efforts and innovative policies helped
led to a reduction in the outstanding liabilities, the state to consistently register double-digit
revenue deficit and fiscal deficit of the state growth
government since the bifurcation

14

% GDP/GSDP Growth
2014-15 2015-16 2016-17 2017-18 11.61 11.72
12 10.95 11.04
0.00
-0.50 -0.1% 10
-1.00 -0.8% -0.7% 7.93 7.11
-1.50 8
-1.4% 5.7 6.3
-2.00 6
-2.50
-3.00 -2.74% 4
-3.50 -3.00%
-3.36% 2
-4.00
-4.50 -4.15% 0
2015-16 2016-17 2017-18 2017-18
(Q1) (Q2)

FD as % of GSDP RD as % of GSDP Andhra Pradesh India

Source: State Budget 2017-18

GVA estimates for Andhra Pradesh at constant prices (2011-12) | Consistent double digit growth
across sectors

90
80 11.03% 10.16% 10.64% 76.6
CAGR CAGR CAGR 68.9
70
GVA (USD billion)

62.6
60

50

40 35.2
31.9
28.7
30
21.4 20.1
20 17.3 18.7 16.5 18.2

10

0
Agriculture Industries Services Total GVA

2014-15 2015-16 2016-17

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4

Nearly 30 per cent increase in per capita income over the last four years, suggesting
improvement in the standard of living of people in the state

2000

1800

1600

1400

1200
USD

1000

800

600

400

200

0
2011-12 2012-13 2013-14 2014-15 2015-16 2016-17
(SRE) (FRE) (AE)

AP (Constant Prices (Base = 2011-12)) All - India (Constant Prices)

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5

Exports02 systems and extend power supply connection on


demand.
• Ranks ninth in the total share of exports (2.80 per • Power utilities are contemplating to install over 10
cent) at INR804.6 billion (USD12.38 billion) lakh smart electricity metres across the State with
(2016-17) an aim to curb tampering issues besides doing
• The diverse resource endowments coupled with away with manual billing.
robust production and value addition networks,
position the State at the fulcrum of the exports
sector in India. Economic growth potential
• AP has its prominence in the exports of marine • Average GSDP growth rate of 11.28 per cent over
products. the past two years.
• Around 23 operational SEZs in the state across • Ranks first among all states in India in the ease of
diversified sectors doing business rankings published in 2016 by DIPP
• Vehicles, aircraft, vessels and associated transport and the World Bank.
equipment was one of the largest sectors of • Nearly 57 large and mega industrial projects
exports from Andhra Pradesh. established in FY2016-17, providing employment
to 23,756 people. Over 9,900 MSMEs established
Coastline in the organised sector providing employment to
1,07,609 people.
• Second longest coastline of 974 kms • Largest pool of employable male and female
• Andhra Pradesh is one of the front runners candidates with majority available for internships.
for the prestigious INR300.0 billion (USD462 • The ‘economic cities’, to be taken up by
million) Coastal Economic Zone (CEZ), to be the government in association with private
implemented by the centre in partnership with the construction agencies, is expected to be self-
state government to attract globally competitive sufficient with education, health, shopping and
industries and create large-scale employment entertainment.
opportunities.
–– Each industry is expected to create 10,000 to
40,000 direct, skill-based jobs within a specified
time.
• By 2025, annual industrial output along the corridor
expected to increase fourfold to INR4.16 trillion
(USD64 billion).
• The state’s long coastline allows the opportunity
to create international gateways. It is strategically
located with respect to other ASEAN economies.

Power generation
• Third state after Gujarat and Punjab to achieve 100
per cent electrification of households.
• 24X7 reliable and quality power across the
industrial commercial and domestic sectors
• Total installed capacity - 22,257.10 MW (as on
31.01.2018) and per capita consumption03
• An investment of INR200 billion (USD3.07 billion)
has been proposed over the next five years to
strengthen the transmission and distribution

02. AP draft export policy


03. http://www.cea.nic.in/reports/monthly/installedcapacity/2018/installed_capacity-01.pdf

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6

04
Key investments
Over the last 3.5 years, more than INR1,315 billion (USD20.25 billion)
committed investments have gone into production across sectors
with additional INR3,142 billion (USD48.34 billion) presently in
advanced stages
Major investors include - • World’s largest food, snack, and beverage
corporation
• World’s largest contract manufacturer of mobile
phones • One of the world’s top 10 pharmaceutical
companies
• South Korea’s second largest motor vehicle
manufacturer • World’s largest monocrystalline silicon producer
• Spanish manufacturing company principally • American food manufacturing multinational
involved in the fabrication of wind turbines and company
construction of wind farms • India’s largest biopharmaceutical company
• Japanese commercial vehicles and diesel engine • American multinational confectionery, food, and
manufacturing company headquartered in Tokyo beverage company
• World leader in renewable energy solutions • India’s most trusted generic pharmaceutical
includes products under wind energy & solar manufacturing brand.
energy

04. Andhra Pradesh Investment Tracker, accessed on 12 February 2018

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7

Transforming into
‘sunrise state’:
Moving the needle

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8

Andhra Pradesh - India’s ‘sunrise state’


After its re-organisation in June 2014, the state of
Andhra Pradesh confronted a host of development
related challenges impacting its 49.38 million people.
Three years later, we have emerged triumphant, as
Chandrababu Naidu
one of the fastest growing states in India, registering
double-digit growth on a quarterly basis, supporting its Chief Minister
claim to be a state that is delivering results. Andhra Pradesh, India

The newly formed state of Andhra Pradesh in 2014 a journey of massive transformation that started
came saddled with post-bifurcation issues. One with a series of dynamic adjustments and strategic
of the biggest challenges was the then capital alignment of initiatives that were identified for
city, Hyderabad, the major source of revenue for socio-economic development. Consequently, the
united Andhra was now in Telangana. The state was state embarked towards tranforming itself into a
suddenly faced with the harsh reality of rebuilding happy, inclusive, responsible, globally competitive
itself - right from developing new infrastructure, and innovation-driven society through structural
recognising a new capital city, forming a legislative transformation. By sustaining an inclusive double-
assembly and a secretariat to generating enough digit economic growth, the state aims to become
revenue to survive as an independent state. one amongst the three best states in India by 2022,
achieve the status of a developed state by 2029, and
The state started its transformational journey with
that of a leading global investment destination by
a major handicap in terms of smaller resource base
2050.
with higher population ratio. Reconstruction of the
state was also hobbled by the devastation wreaked ‘Vision 2029’ accelerated Andhra Pradesh’s
by natural disasters. As per the state’s budget transformational journey. Since the bifurcation, the
speech 2015-16, the estimated loss on account of state has recorded considerable progress in terms
Hudhud cyclone was INR715 billion (USD11 billion)01. of the objective of achieving inclusive growth and
Deficit of nearly 36 per cent01 in rainfall resulted development. Since June 2014, the overall size of
in massive drought in the state, thereby further the economy has grown from INR5,264.7 billion
deepening the impact of state bifurcation. Among (USD80.9 billion) to INR6,993 billion (USD107.6
the many noticeable challenges were a myriad of billion), in 2016-17. The Agriculture sector grew at 8.7
unseen issues and hurdles staring at the new state per cent (at constant prices) as compared to 2014-15,
of Andhra Pradesh. while the Manufacturing sector grew at 11 per cent.
The Services sector grew at 11.4 per cent, compared
Deepening debt burden forced the state to continue
to 11.5 per cent in 2014-1502.
to borrow in order to meet its revenue expenditures.
The state requested the 14th Finance Commission The state’s efforts in transformation, successful
for a grant of INR1.0 trillion (USD15.42 billion) for engagement of the private sector and active
capital construction and INR412.53 billion (USD6.35 participation of the people of Andhra Pradesh has
billion) for other critical infrastructure requirements. led to a growth of 11.61 per cent during the year
However, only INR221.13 billion (USD3.4 billion) was 2016-1703. In the first half of FY2017-18, the state
granted as revenue deficit grant and INR18.23 billion registered a growth rate of 11.37 per cent, ahead of
(USD280.46 million) towards disaster management01. the national growth rate of 5.8 per cent04.
Undettered by the challenges, the state of Andhra Adopting efficient fiscal management and prudence,
Pradesh, under the leadership of Hon’ble Chief mobilisation and effective deployment of investment,
Minister, Chandrababu Naidu, committed itself to the state has made considerable progress in

01. Government of Andhra Pradesh, Budget Speech 2015-16 03. AP socio-economic survey 2016-17
02. Government of Andhra Pradesh, Budget Speech 2015-16 04. A.P. registers 11.37% growth rate in first half of current fiscal, The Hindu, 8 December 2017

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9

bringing down revenue deficit while containing the


fiscal deficit within the limits.. From an estimated
INR142.42 billion (USD2.19 billion) (2.72 per cent
of GSDP) in FY2014–15, the revenue deficit, is
estimated to be INR4.16 billion (USD64 million)
(0.05 per cent of GSDP) by the end of FY2017–18.
Similarly, the fiscal deficit target has declined from
3.88 per cent of GSDP in FY2014–15 to 3 per cent
in 2016-1705. The decline in revenue deficit and fiscal
deficit indicates an increase in revenue of the state
and improvement in its fiscal capacity.
The journey towards transformation commenced
with the state steadily introducing new initiatives,
one after the other. The journey started with laying
down the foundation for a city that belongs to the
citizens of the state as well as the global citizen of
the world and comitting to the growth story.

Amaravati: The
people’s capital of
Andhra Pradesh
The first step towards the transformation was
taken by laying down the foundation of Andhra
Pradesh’s new capital city in Amaravati. Amaravati
is envisioned to be a world-class capital region that
will have the capability to accommodate a population
of nearly 3.5 million people by 205006. The city
will be positioned as a global economic hub and a
top destination for people, investments and jobs,
endowed with the world’s best infrastructure.
Key features of the city:
• The seed capital covers an area of 6.84 sq.km,
while core capital and capital regions span over an
area of 217 sq.km and 8,603 sq.km respectively;
Thullur, Tadepalli and Mangalagiri mandals form
core capital area.
• Amaravati is planned around 9 cities with smart
city features and walk-to-work concept.

05. The AP Growth Story: How the State considerably improved its revenue after bifurcation, The NEWS
Minute, 20 March 2017
06. Andhra Pradesh Capital Region Development Authority, accessed on 12 February 2018

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10

Media city
• Media and creative
industries
Sports city • World class
1,679 Ha Government
city production facilities
1,093 Ha Finance city • Broadcasting
2,091 Ha
• Films
• Publishing
• Gaming
Media city Tourism city • Mobile
2,067 Ha Justice city 4,716 Ha
• Advertising
1,339 Ha
• Residential, hotels,
retail, F&B
Knowledge city
3,459 Ha

Sports city
• International sports
Health city stadiums
2,647 Ha
• Velodrome
• Indoor sports area
Electronic city • Aquatic centre
2,663 Ha
• Sports village
• Sports academics
• Sports mall
• Residential, hotels,
retail, F&B

Justice city Knowledge city


• High Court • Legal processing and • World class centers
• Local Courts and support centres universities • National library
Tribunals • Residential, hotels, • Centers for higher • Recreational parks
• Legal firms retail, F&B learning and and sports facilities
• Law schools excellence • MICE
• Para-legal training • Multi disciplinary • Residential, hotels,
centres educational retail, F&B
• Legal research institutions
institutes justice • R&D institutions
• Knowledge centre • Start-up/incubation

Electronic city Health city


• IT campuses • Warehouses • Medical tourism innovation suites
electronics industrial • Residential, hotels, • Centers of medical • Alternative medicine
clusters retail, F&B excellence research centre
• Electronic retail hubs • Super speciality • Rehabilitation centres
• Testing labs health facilities • MICE
• Incubation centers • World class medical • Residential, hotels,
• Training institutes universities retail, F&B
• Logistic centers • Bio-medical research
institutions
• Incubation and

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11

• Resilient urban infrastructure, usage of smart


Tourism city
technologies and creation of sustainable public
• Heritage tourism • Museums spaces constitute core elements of the city. State-
• Religious tourism • MICE of-the-art technology from around the globe is
• Theme parks • Residences, hotels, being leveraged to develop the city
• Water front tourism retail, F&B
• One of the key highlights of the capital project is
Water taxis
the manner in which land has been acquired. Out
• Science centre
of the total required area of 54,000 acres, the
Government was already in possession of 21,000
acres and the remaining belonged to the farmers
Government city in the area07.
• Government • State level ministers • A unique land pooling scheme was charted
complex • City square wherein farmers were urged to voluntarily give up
• Legislative Assembly • Convention centre their land in return for developed land elsewhere
• Secretariat • Residences, hotels, and suitable annual compensation. Within six
• International retail, F&B months, nearly 33,319 acres of land was voluntarily
bureaucratic pooled in from more than 26,000 farmers08. This
institutions and was India’s largest ever consensus based land
embassies pooling.
• Within two years, more than 59,000 plots have
already been returned to farmers through public
Finance city lottery and around 3,900 plot options have been
provided to farmers (highest globally)08
• Waterfront Central • Trading houses
Business District • Corporate
(CBD) headquarters
• Banks • MICE World-class infrastructure: 600 km
• NBFCs • Residences, hotels, of road network by 2050
• Mutual fund retail, F&B
institutions
• Investment banks Jobs and homes for all: 3.55 million
• Rating agencies resident population by 2050 and 1.5
million jobs by 2050

Green and clean: 20% area reserved


for green and blue and > 20+ km
public river waterfront

Quality living: Parks and public


facilities within 5-10 minute walking
distance

Efficient resource management:


Flood resistant city towards net zero
discharge

Identity and heritage: Heritage and


tourism network using roads, metro
and waterways

07. Birth of a new Capital: All you need to know about Amaravati, a ‘futuristic world-class city’, FirstPost, 08. Andhra Pradesh Capital Region Development Authority, accessed on 12 February 2018
8 February 2018

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12

Inclusive growth
After the state’s reorganisation in June 2014, Andhra Irrigation
Pradesh faced a host of development related • Net irrigated area, a major supporting factor of
challenges. Three years down the line, the state has food production, widened to 2.4 million Ha
emerged as one of the fastest growing economies
in India maintaining a double digit growth rate. • Pattiseema Lift Irrigation Scheme linking rivers
The state is leveraging sustainable and inclusive Godavari and Krishna became the country’s
measures to realise its vision of becoming a leading first and fastest river-linking project to provide
state in development and happiness by 2029. The necessary water for irrigation to farmers
Government has adopted a development framework • Use of technology - Real time monitoring of
that is aligned to the Sustainable Development Goals water levels using piezometers was introduced
(SDG) – through which various social indicators such for proactive drought mitigation. Results of the
as poverty rate, food security, sustainable agriculture, real-time monitoring are transmitted to the Chief
health and well-being, quality education, gender Minister’s CORE dashboard
equality, water and sanitation etc. are regularly
• Innovative measures such as sprinkling/drip
monitored. The SDG framework, built on the tenets
irrigation, polynets/shadenets augured well for the
of inclusiveness, forms the guiding agenda for the
state in bringing down the impact of drought on
state’s development initiatives.
crop yield.

Key initiatives to enable inclusive Healthy society


growth: • Integrated Child Development Services (ICDS)
scheme addresses nutritional challenges faced by
Poverty and inclusive development young children, pregnant and nourishing mothers
• The state’s poverty rate is 9.2 per cent, • Adoption of technology – Global Positioning
considerably lower than that of India’s, which System (GPS) based vehicle tracking to monitor
stands at 20.9 per cent09 movement of essential food items
• ransforming into a slum-free state: Construction
T • Maternal, childcare and family welfare servies
of nearly 56,68,370 houses has been completed, delivered through 7,617 sub-centres, 1,069
comprising 51,68,249 in rural areas and about Primary Health Centres (PHC), 179 Community
5,00,121 in urban areas under the Weaker Section Health Centres (CHC), 49 area hospitals, 9 district
Housing Programme, till the end of February 201710. hospitals, 6 mother and child care hospitals and 11
teaching hospitals in the state11
Agriculture • IMR and MMR at 35 and 92, respectively, are
• Zero Budget Natural Farming (ZBNF) – a unique better than the national averages
program run by the GoAP with an aim of improving • Approximately 98 per cent of births are institutional.
the livelihood of about 5,00,000 farmers settled in • Under 5 mortality rate at 41 - better than the
399 clusters in 2,000 villages national average which stands at 5012
• 100 per cent digitisation of Public Distribution • Health insurance schemes available for Below
System (PDS) to address leakages in distribution Poverty Line (BPL) and Above Poverty Line (APL)
of food grains and bogus ration cards families12.
• Allow cashless transactions in all Fair Price Shops • First state in the country to become Open
to facilitate purchase of essential commodities Defecation Free (ODF) in urban areas
using digital currency
• Around 70 per cent Open-Defecation Free (ODF) in
• Provide soil health cards, testing of soil samples,
rural areas and target to become 100 per cent ODF
reducing micro nutrient deficiency and extension
by 2019
and guidance from knowledge partners such as
ICRISAT.

09. Andhra Pradesh Sustainable Development Goals, 2016-17 Department, Government of Andhra Pradesh, July 2017
10. A.P Economic Survey, 2016-17 12. Andhra Pradesh Sustainable Development Goals, 2016-17
11. Sunrise Andhra Pradesh Vision 2029, Vision Management Unit INNOVATION APSDPS, Planning

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13

• Swachh Andhra – Visakhapatnam, one of the


leading cities in the state, is ranked third in the all Current and projected rise in per
India Swachh Bharat Mission Index. capita income (USD)
Financial inclusion
• Jan Dhan Yojana (JDY) and women Self Help Group 14,545
(SHG) to maximise mainstream participation of its
citizens
4,470
These initiatives have helped improve the per 1,409 1,629 1,854 2,697
capita income of Andhra Pradesh from INR93,000
(USD1,409) in 2015 to INR1,84,000 (USD2,831)
2015 2016 2017 2019 2022 2029
in 201713.

13. AP Economic Survey, 2016-17, 2015-16 and 2014-15, Vision 2029 Annual Report 2017

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14

Education hub and knowledge society


Skill and knowledge mission was set-up as one of the
seven missions in the ‘Sunrise Andhra Pradesh Vision
2029’. It incorporated learnings from countries to
establish an ecosystem for tranforming the workforce
into skilled and ‘industry ready’. Under the mission,
several noteworthy initiatives were undertaken.
• Andhra Pradesh State Skill Development
Corporation (APSSDC) has been set up to bridge
the demand gap and promote entrepreuship and
innovation in the state
• About 447 government-run junior colleges, eight
government-run vocational junior colleges, 1749
private un-aided junior colleges functioning in the
state14
• Andhra Pradesh is the first state in the country
to introduce digital class rooms in all 352 KGBVs
(Kasturba Gandhi Balika Vidyalayas - residential
schools for underprivileged sections of the society)
• 250 digital classrooms14 in Visakhapatnam district
on pilot basis
• 100 per cent of schools have been mapped on GIS.

8 institutes of excellence 13 universities


• Indian Institute of Technology, Tirupati • Amrita Vishwa Vidyapeetham, Amaravati
• Indian Institute of Management, • Vellore Institute of Technology, Amaravati
Visakhapatnam • SRM University, Amaravati
• Indian Institute of Science, Education & • XLRI, Vijayawada
Research, Chittoor
• Indian Institute of information, Design &
• Indian Institute of Information Technology, Mfkg, Kurnool
Chittoor
• Jawaharlal Nehru Technological University,
• All India Institute of Medical Sciences Kakinada
(AIIMS), Guntur
• Sri Krishnadevaraya University, Anantapur
• National Institute of Technology,
• Rashtiya Sanskrit Vidyapeetha, Tirupati
Tadepalligudem
• Andhra Univeristy, Visakhapatnam
• School of Planning & Architecture, Vijayawada
• NTR Health Univeristy, Vijayawada
• National Institute of Design, Vijayawada
• Sri Venkateshwara Univeristy, Tirupati
• Sri Padmavati Mahila University, Tirupati
• Damodram Sanjivya National Law
University, Vizag

14. AP Economic Survey 2016-17

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15

Happy Andhra, successful Andhra


• The state’s vision is to ensure a happy and globally 122nd with a score of 4.315, among 155 nations (in
competitive society, and people’s happiness and the World Happiness Report, 2017).
well-being have been put at the forefront of the
• In 2017, the Government of Andhra Pradesh (GoAP)
state’s efforts15.
established ‘Happiness Department’ led by the
• United Nations Sustainable Development Solutions Hon’ble Chief Minister, Chandrababu Naidu. It
Network (SDSN) measures global happiness and became the second state in the country to do so
conducts global annual happiness assessments after Madhya Pradesh
across countries published as the ‘World
Happiness Report’.
• Andhra Pradesh is the only state among the
Happiness of the people of Andhra Pradesh
countries that is linked with SDSN and has
is the supreme goal of the government and
followed the global methodology to assess
people’s well-being and happiness is being put
happiness levels within the state.
at the forefront of state’s efforts.
• State’s happiness rank was assessed based on
responses collected during the ‘Andhra Pradesh
happiness survey 2016-17’. The survey was based
on the UN SDSN’s World Happiness Framework.
Key aspects included GDP, generosity, social
support, corruption in business, corruption in the Chandrababu Naidu
government, freedom to make life choices etc. Chief Minister
Based on the evaluation, AP stood at 74th position
Andhra Pradesh, India
globally with a score of 5.3616. India was ranked

15. Happiness Index-AP Vision 2029 16. World Happiness Report,

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16

Driving growth through industrial corridors


India is building five large industrial corridors17 which
are expected to boost direct economic growth
prospects across 14 States in India. The cumulative
investment for these corridors is estimated to be
around INR32.5 trillion (USD500 billion) and expected
to create approximately 40 million jobs over the next
20-25 years18. Out of these five industrial corridors,
two are passing through Andhra Pradesh given its
strategic location, availability of land, resources and
skills. These Industrial corridors, once developed,
will not only cater to competitive manufacturing
but also ensure streamlining of urbanisation
and drive economic growth. Currently, Andhra
Pradesh is implementing two industrial corridors –
Visakhapatnam Chennai Industrial Corridor (VCIC) &
Chennai-Bengaluru Industrial Corridor (CBIC)

Visakhapatnam Chennai Industrial


Corridor
• Key part of the planned East Economic Corridor,
and India’s first Coastal Corridor
• Supported by Asian Development Bank (funding of
INR40.6 billion (USD625 million))
• Potential to:
–– Increase GDP in the Corridor districts by six

times (from INR2 trillion (USD30 billion) in 2015


to INR11.6 trillion (USD174 billion) by 2035)
–– Expand manufacturing output by seven times
from INR1.1 trillion in 2015 (USD16 billion) to
INR7.8 trillion (USD117 billion) by 2035
–– Create 11 million additional incremental
employment from 2.9 million in 2015 to 14
million by 2045
• Four nodes proposed – Visakhapatnam,
Machilipatnam, Srikalahasti-Yerpedu & Donakonda
• Master planning completed for two nodes –
Visakhapatnam & Srikalahasti- Yerpedu
• Huge opportunity for establishment of
manufacturing units across 11 industrial sectors
(Pharmaceuticals, electronics, A&D, machinery
& heavy engg., hi-tech engineering, electronics,
automobile, food processing, textiles, building
materials & machinery parts)

17. Delhi – Mumbai Industrial Corridor (DMIC), Visakhapatnam – Chennai Industrial Corridor (VCIC), Chen- 18. DIPP
nai – Bengaluru Industrial Corridor (CBIC), Bengaluru – Mumbai Economic Corridor (BMEC), Amritsar
– Kolkata Industrial Corridor

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17

Visakhapatnam Chennai Industrial Corridor (VCIC)

VCIC Node

Airports

Proposed Ports
Ramky Pharma City VISAKHAPATNAM NODE
Existing Ports (Nakkapalli & Atchutapuram – 6,847 acres)
Atchutapuram SEZ VISAKHAPATNAM
VISAKHAPATNAM (97 MMTPA)
GANGAVARAM (55 MMTPA)

VIJAYAWADA

DONAKONDA
MACHILIPATNAM NODE (12,145 acres)
MACHILIPATNAM (150 MMTPA)

DONAKONDA NODE (17,117 acres)


RAMAYAPATNAM (100 MMTPA)

Sri City KRISHNAPATNAM (75 MMT)


DURGAJAPATNAM (100 MMTPA)
TIRUPATI
SRIKALAHASTHI-YERPEDU NODE
BENGALURU (Routhusuramala and Thotambedu – 24,191 acres)
CHENNAI

Chennai Bengaluru Industrial


Corridor
• CBIC is expected to drive growth of both large
industries and SMEs and boost exports by
focusing on sectors like electronics, automobile,
textiles and food processing
• Three nodes are proposed under CBIC –
Krishnapatnam, Hindupur and Orvakal
• CBIC has been included under National Industrial
Corridor Development and Implementation
Trust (NICDIT), which is an apex body under
administrative control of DIPP
• Krishnapatnam Node will be developed in
Phase – I of CBIC
• Conceptual Master Plan for the Krishnapatnam
node completed

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18

Developing
Chennai Bengaluru Industrial robust
Corridor (CBIC) industrial infrastructure

ORVAKAL NODE
(~7,800 acres to be identified)
CBIC Node

Existing major SEZs

Airports VISAKHAPATNAM (97 MMTPA)


GANGAVARAM (55 MMTPA)
Proposed Ports

Existing Ports

ORVAKAL

DAGADARTHI
PUTTAPARTHI
KRISHNAPATNAM NODE
(10,480 acres)

Sri City KRISHNAPATNAM (75 MMT)


DURGAJAPATNAM (100 MMTPA)

HINDUPUR NODE
(~10,700 acres to be identified) BENGALURU CHENNAI

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19

Real-Time Governance (RTG)


With the objective of bringing both efficient and RTG is helping the State in efficiently monitoring
effective governance closer to the citizens by key social and economic indicators, vision 2029
leveraging e-Governance, technology and electronic parameters, Andhra aligned-SDGs and all state issues
communication, ‘Real-Time Governance (RTG)’ on a real-time basis. It has permeated across sectors
has been adopted by the GoAP. RTG has been like agriculture, irrigation, health, education, disaster
implemented as a unified platform ecosystem with management, financial management, citizen centric
data integration from multiple departments and services, etc.
sources. It enables data driven decision making in
real time with the ultimate objective of achieving
80 per cent citizen satisfaction. It is also aims to
increase public participation in state governance.

Objectives and components of RTG: People first

• Integrated grievance redressal


• People first / ‘1100’
• Real time feedback


IVRS
Issue based surveys
Satisfaction
• Participatory e-Governance and level > 80%
m-Governance platforms
• E-office

IOT and surveillance


Good governance
• Drones
• Sensors • A.P. CM connect
• Dashboards • Parishkara Vedika (call center)
• Geo tagging • Mee Kosam (Grievance
• Biometrics redressal mechanism)
• Weather • Kaizala
• Disaster control • Social media
• SEOC Infrastructure • Print and electronic media
• Incidents and • A.P. fiber grid • Mobile applications
events • CC cams • Common operational platform
• FSOC (wireless) • Machine learning
• Digital classrooms • Predictive analysis
Incidents • Aadhaar platform and
• ISRO applications
• Sensors

People hub Land hub CFMS Cloud hub 1100

13. AP Economic Survey, 2016-17, 2015-16 and 2014-15, Vision 2029 Annual Report 2017

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20

Key initiatives:
• Real-Time Governance Centre (RTGC) inaugurated • Implemented a ‘People Hub’ which is designed as
at AP Secretariat. It is Asia’s biggest integrated a state-wide single source of data on people
control and command centre. 13 district centers
• Other RTG initiatives across sectors include:
are being setup along the primary RTGC
–– Real-time ground water monitoring using
• ‘People First’ campaign – Call centre based real
sensors,
time monitoring of all welfare schemes
–– Real-time weather monitoring using sensors,
• e-Pragati, a state-wide Enterprise Architecture, is
–– Real-time reservoir monitoring through sensors
the largest eGovernance programme approved by
and drone technology,
any state in India. It covers 33 departments, 315
agencies & around 745 services –– Health – CC Cams using sensors for laboratory
equipment,
• Fibergrid with 25,000 kms of fiber has been
–– e-Aushadhi
laid across the entire state to provide network
connectivity to entire State. Connectivity through –– NTR Bharosa using biometric/ iris devices,
fibergrid enables real-time monitoring –– Real-time monitoring of Street Lights using
sensors
• Innovative and citizen centric e-governance
projects such as Mee Seva, Mee Kosam, Mee –– Police – CC Cams
Bhoomi, to ensure improved delivery of services –– Revenue – Mobile application
and faster grievance redressal of citizens –– Rural development using mobile application.
• Chief Minister’s Office Realtime Executive (CORE)
Dashboard and AePDS have been cited by the
Niti Aayog as replicable best practices for other
governments in India to emulate

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21

Sunrise Andhra Pradesh Vision 2029


Towards a happy and globally competitive society
• Sunrise Andhra Pradesh Vision 2029 (Vision 2029) • Vision 2029 includes seven missions to expedite
that envisions the entire state machinery to work socio-economic growth by focusing on social
in tandem towards a unified goal – achieving the capital, economic infrastructure and governance,
best standards for all in an inclusive society. five awareness campaigns to encourage
stakeholder participation, and establishment of five
• Synchronised with the overall aspiration of the
grids to enable each household access to basic
state, Sunrise AP Vision 2029 was put in place
amenities within a defined timeframe.
with the objective to be a ‘Happy and Globally
Competitive and Innovation Driven Society’
by becoming one among the top three most
developed States in India by 2020, achieving
developed state status by 2029 and becoming a
leading global destination by 2050.

By 2022 By 2029 By 2050


To be To be #1 To be a
among top state in leading
three most development global
developed and destination
states in happiness for
India investments

• Key targets for Vision 2029 include:

Economic growth CAGR 12%

Cumulative investments estimated


between INR84 trillion (USD1.3 trillion) to
INR97 trillion (USD1.5 trillion)

Human development index value of


over 0.9

Global competitive index to be among


top 15 countries

Employment: Generate 14.4 million


additional job opportunities

Source: Sunrise Andhra Pradesh Vision 2029, Vision Management Unit INNOVATION APSDPS, Planning
Department, Government of Andhra Pradesh, July 2017

13. AP Economic Survey, 2016-17, 2015-16 and 2014-15, Vision 2029 Annual Report 2017

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22

Seven key missions14 - The progress so far

Primary sector Social empowerment Knowledge and skill


• Used rain-gun technology • Adopted Sustainable development
for drought mitigation Development Goals • Enabled 1,638 schools
• Nearly 1.0 million minor (SDGs) to eliminate with digital classrooms
irrigation sources now poverty, injustice and • Employed 1,325
in Andhra Pradesh tackle climate change headmasters and 1,07,000
vs. 9,72,000 sources • Around 24.97 per cent teachers trained
previously growth in urban population • Set-up 1,360 colleges
• About 6,93,000 hectares • Facilitated free lab offering professional
(Ha) covered under micro- investigations to patients courses
irrigation under NTR Vaidya Pariksha • Trained and placed over
• Micro-nutrients distribution • Trained 8,96,440 DWACRA 90,000 students under skill
to farmers – 10 per cent groups comprising development program.
improvement in yield seen 90,36,616 women
• 1.553 million Ha covered • Around 97 per cent
under micro-nutrient children vaccinated. Infrastructure
fortification • Enabled port-led
• First in oil palm cultivation. development for industrial
Service sector growth corridors and
logistic hubs, improved
• Attracted 7.5 million
road connectivity, ease of
Urban development visitors annually
doing business
• Strengthen the capital city • Contributed 46 per cent to
• Developed deep draft
Amaravati - confluence of GVA
ports with cumulative
9 cities
capacity of 250 MMTPA;
• Placed 16 Urban Local plans to increase to 750
Bodies in top 100 clean Industry sector MMTPA
cities in the country
• Set-up two industrial • Road network of 4,700
• Andhra Pradesh is corridors – VCIC, CBIC kms in the state
currently the third state
• Established 57 large and • Second longest coastline
with maximum clean cities
mega projects of 974 kms
in top 100
• Attracted total investment • Became a power surplus
• Sanctioned more than
of INR50.51 billion state.
90,000 houses for urban
(USD785 million)
poor.
• Ranked first in ease of
doing business
• Provided online industrial
incentives
• Organised two partnership
summits.

14. AP Socio Economic Survey 2016-17 and Sunrise Andhra Pradesh Vision 2029, Vision Management Unit
INNOVATION APSDPS, Planning Department, Government of Andhra Pradesh, July 2017

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23

Making AP globally competitive


Working towards becoming one of the top 10 economies in the world
In 2015, the GoAP signed a MoU with the World the 141st economy in the world, and first in India, to
Economic Forum (WEF) to assess its economy implement this Index. It not only became the first
viz. the twelve pillars elaborated by the Global Indian state to conduct such an empirical analysis but
Competitiveness Index (GCI), which not only provides was also positioned ahead of the national value. The
a cross-country comparison across the globe over the state surpassed India’s rank of 55 and score of 4.31
defined set of indicators, but also enables to do an with 51st rank and a score of 4.3715.
assessment of economies of similar socio-economic
For the year 2016-17, the state scored 4.57/7 and GCI
profiling and hence provides learning from best
equivalent rank of 36 surpassing India’s 2016-17 value
practices of higher ranked economies15.
of 4.52/7 and rank of 3915.
The GoAP assessed the competitiveness – both
strengths and weaknesses – of the state’s economy
based on the GCI framework. In 2015, AP became

Impact assessment

Institutions
6.13
Infrastructure
7 6.69
Innovation
5.8 6
5 Macro-economic
4 environment
Business 6.84
sophistication 3
5.8
2
1 AP 2016-17
Market size Health and
AP 2015-16
7 0 primary education
6.89 Best score 2016-17

Technological Higher education


readiness and training
6.41 6.18

Goods market
Financial market
efficiency
development
Labour market 5.78
5.7
efficiency
5.8

15. The global competitiveness index- Andhra Pradesh 2016-17

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24

GCI 2016-17 rankings

Economy Score Current rank

Switzerland 5.81 1

Singapore 5.72 2

United States 5.70 3

Germany 5.57 5

United Kingdom 5.49 7

Japan 5.48 8

Taiwan, China 5.28 14

United Arab Emirates 5.26 16

Malaysia 5.16 25

Korea, Rep. 5.03 26

China 4.95 28

Thailand 4.64 34

Andhra Pradesh 4.57 36

Kuwait 4.53 38

India 4.52 39

Russian Federation 4.51 43

South Africa 4.47 47

Brazil 4.06 81

AP India

2016-17 2015-16 2016-17 2015-16

Rank Value Rank Value Rank Value Rank Value

GCI 36 4.57 51 4.37 39 4.52 56 4.31

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25

No. 1 in DIPP and the World Bank’s


‘Ease of Doing Business’ ranking
for Indian states, 2016

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26

Attracting investments, accelerating


economic growth
In 2015, the Department of Industrial Policy and • Spot approvals for allocation of raw materials such
Promotion (DIPP) in collaboration with the World as coal and ethanol, highly efficient especially for
Bank initiated a programme to rank Indian states on industries such as pharmaceuticals, ceramics etc.
ease of doing business parameter. Andhra Pradesh • Technology enablement, system driven scrutiny of
ranked second, implemented a slew of measures to drawings, risk based categorisation for inspections
simplify the government processes for granting of
regulatory clearances for setting up and running a • Guarantee of service delivery, public service
business in the state. delivery guarantee for ensured delivery of
regulatory clearances within defined service levels.
In 2016-17, the state improved its ranking and is now
ranked as no. 1 state in the country on Ease of Doing
Business (EoDB). An investor friendly state, Andhra
19 departments, 15
Pradesh, took the following measures to provide a 29 out of 39
spot approvals, 6
conducive business environment to investors: approvals are
within a week, 8 within
Single desk portal, mainstay of the reforms, is provided within
• 15 days, 17 within
an online platform available 24x7 for obtaining 15 days
21 days
necessary regulatory clearances
• No physical interaction with the departments, the
>25,000 approvals Guarantee of service
state discourages any direct interaction between
granted through through ‘public
investors and departments.
single desk portal service delivery
• Self-certification based approvals, as many as 15 since June 2015 guarantee’
approvals are granted on the spot based on self-
certification by the investor
• Joint inspections, to ensure investor convenience,
EoDB reforms are supported by robust policy and
inspections of several departments such as Labour
governance environment. Instruments like ‘single
and Factories are combined into one inspection
desk policy’ and ‘public service delivery guarantee’
• Single integrated returns under labour reforms help assure seamless implementation of reforms
• Online application and sanction of incentives, Single Desk Bureau (SDB), established in June 2016,
transparent process of applying and sanctioning is the governing body that oversees the functioning
of industrial incentives of ‘single desk portal’ including providing deemed
approvals in case of breach of SLA. Led by the
industries department, it has representation from
all departments involved in granting approvals. The
SDB convenes on a fortnightly basis to review SDP
progress, pendency and accord deemed approvals, if
necessary. No applications can be rejected without
the concurrence of SDB.
The state strives to be globally competitive and
plans to benchmarking itself against the top ranked
countries in the world. A benchmarking study has
been initiated to adopt best practices in the areas
of electricity connection, construction permit, land
administration, property registration, etc.

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27

Strong enablers for equitable and decentralised industrial development16

Enabling policy environment Industrial land bank Getting electricity

Robust policy environment through • GIS-enabled large industrial • First state in South India to
industrial and sector-specific land bank; online process for offer 24x7 quality and reliable
policies, with best-in-class policy application, processing and power to industry and second
instruments and fiscal incentives. payments state to achieve 100 percent
Lower prices for industrial land electrification
• Industrial development policy •

against comparable Indian • Ranked #1 state in the


• Sector policies: Aerospace country in ‘Energy Efficiency
states; land given on outright
and Defence Manufacturing, Implementation Readiness’ by
sale basis
Automobile and Auto the World Bank
Components, Biotechnology, • Focus on implementing
sustainable and green Industrial • Energy transmission &
Food Processing, Fisheries, distribution losses (9.80 per
Retail Trade, Textile and Apparel, practices in select industrial
cent) amongst lowest in the
MSME, Tourism parks
country
IT sector: IT, electronics, • Scope for developing industrial

• Strong focus on renewable
Global In-House Centers (GlC), parks on PPP basis energy; 18 GW renewable
designated technology parks, energy capacity (10 GW Solar,
innovation and startups, cloud 8 GW Wind) by 2021-22
hub • Winner of multiple awards for
• Infrastructure: Port, solar power, power saving initiatives and
wind power, civil aviation energy efficiency activities,
conferred by the Union Ministry
of Power

Connectivity Industrial infrastructure Industrial water supply

• Ports: Second longest coastline • Focus on industrial corridors for • Steps undertaken to provide
(974 km) in India, 14 notified development; Visakhapatnam industrial water supply in
ports of which 6 are operative – Chennai Industrial Corridor Hindupur (Anantapur district),
ports with deep draft capable (VCIC) and Chennai–Bengaluru Orvakal (Kurnool district) and
of handling the largest of Industrial Corridor (CBIC) industrial clusters in Chittoor
vessels • Under VCIC, master plans for district
• Airports: Five operational Visakhapatnam (7,680 acres) and • Connecting to water sources
airports; New Greenfield Srikalahasti – Yerpedu (11,000 such as Gandikota reservoir
International Airport at acres) nodes completed; Under Veligallu reservoir, Kandaleru
Bhogapuram (Vizianagaram CBIC, Krishnapatnam (15,975 reservoir, and Srisailam
district), Dagadarthi (Nellore acres) node being developed foreshore
district) and domestic Airport at • Proposed Coastal Employment • 10 TMC of water planned across
Orvakal (Kurnool district). Zone (CEZ) near Krishnapatnam industrial clusters to support
• Road network – 46,962 km • Electronics Manufacturing industrial development
(6,401 km of national highways Clusters (EMC) in Tirupati,
running through the state) Anantapur, Visakhapatnam
• Railway - 7,040 track km of • Ultra mega food park in Kurnool,
network mega food park at Mallavalli
• Inland water transport - 888 km (Krishna district)
national waterway • MSME parks to be developed in
175 assembly constituencies

16. Andhra Pradesh Industries Department, GoAP, accessed on 12 February 2018

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29

Focus
sectors
The Andhra story has just started. Strong
commitment to development, robust infrastructure,
stable social ecosystem and international visibility,
Andhra Pradesh has enormous potential to become
a global business hub.
The ‘Sunrise Andhra Pradesh Vision 2029’ sets an
ambitious target for economic growth for the state -
sustained double digit growth rate of 12 per cent,
with a 1 per cent increase in productivity.
Understanding that growth targets cannot be
achieved only through growth in agriculture, the
state has aggressively worked on industrial growth
through adequate policy and governance framework.
Consequently, the Industrial Development Policy
2015-20 was formulated, which aims to foster
innovation and create employment opportunities
across identified priority sectors. Andhra of the
future envisions holistic growth across all the focus
sectors of the state.
Developments over the last four years have also led
to the emergence of investment opportunities in
other areas along with identified focus sectors.
The following section presents Andhra Pradesh’s
strengths, achievements and investment
opportunities across some of the key sectors.

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30

Agriculture and allied sectors


Sector overview
Andhra Pradesh is working towards doubling the Agriculture and allied
contribution of agriculture to the GSDP to INR600 sectors growth
billion (USD9.23 billion) by 2021.01 The state has
improved its total food grain productivity in the 27.60%
recent years and strengthened its PDS of nearly 22.96%
30,000 fair price shops and 14.2 million households
owning food cards.02

GVA for Agriculture and 21.358


allied sectors (USD billion) 2016-17 Q1 2017-18

18.731 • Budget allocation of INR90.91 billion (USD1.4


billion) for FY2017-18
• Increase in net irrigated area to 2.4 million Ha
• Agriculture credit plan increased by 50 per
cent in 2017 with a corpus of INR832 billion
2015-16 2016-17 (USD12.8 billion)
• Single largest employer of the state, engages
nearly 55 per cent of the state’s labour force

01. A.P Socio-Economic Survey 2016-17


02. Sustainable Development Goals, Status Report 2017 and The Way Forward, State Planning department,
GoAP

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31

Andhra Pradesh’s competitive advantage

Agriculture Horticulture
• Growth rate of 11.61 per cent as compared to • First in mango and papaya production
7.11 per cent in India (FY2016-17) • Largest producer of lemon, tomato, chilli and
• Second largest producer of paddy and maize turmeric
• Second largest producer of raw silk • Contributes ~46 per cent to India’s chilli
production

Fisheries Dairy and poultry


• Sector identified as a growth engine • First in egg production in 2017
• Third in global shrimp production and first in • Second in meat production in 2017
India • Third in milk production
• Sixth in global aquaculture production • Leading state in poultry meat production
• Contributes to 1.19 per cent of global and
20.77 per cent of national fish production
(2014-15)

Schemes at a glance

Soil health cards Micronutrients Distribution of inputs

• 3.557 million SHCs set as target • 94,796 MTs (91 per cent) Seed
SHCs distribution target per yr. micronutrients distributed • Seed subsidy worth INR4.0935
• 1.011 million (28 per cent) SHCs • 1.057 million ha (102 per billion (USD62.9 million)
distributed so far in second cycle, cent) area covered to rectify extended to farmers during
first phase micronutrient deficiencies in FY2017-18
• AP first in India for second different crops in FY2017-18 • 7,18,000 Qtls (63 per cent)
consecutive time in soil analysis • Enhancement of INR7.2 billion • Kharif seed distributed in
and soil health card distribution (USD111 million) in farmers’ FY2017-18
during FY2016-17 income
• 3,18,000 Qtls (88 per cent)
• Micronutrients worth INR865
• Rabi seed distributed
million (USD13.3 million)
supplied on 100 per cent
Fertilizers
subsidy
• 1,57,000 MTs reduction in

fertilizers consumption during


Kharif 2017 over Kharif 2016
• INR2.23 billion (USD34.3 million

saved to the farmers


• INR1.52 billion (USD23.3 million)

saved to GoI in the form of


fertilizer subsidy

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Farm mechanisation Crop insurance

• Target of providing Rythu ratham • 1.9 million farmers insured in


tractors to 12,000 farmers in FY2017-18
FY2017-18. Only 6353 (53 per • 2.03 million ha area insured in
cent) distributed so far FY 2017-18
• 21 Custom Hiring Centres • Gross premium of INR13.88
(CHCs) developed under PPP billion (USD213.6 million)
mode in FY2017-18 collected in FY2017-18
• National average farm power of
1.8 KW/Ha
• State average farm power of
1.64 KW/Ha

Loans Natural farming

• INR560.7 billion (USD8.63 • 399 clusters implemented


billion) (89 per cent) crop loans ZBNF during 2016 and
disbursed during FY2017-18 FY2017-18
• INR145.45 billion (USD2.24 • 5,00,000 Ha and 5,00,000
billion) (60 per cent) agriculture farmers fixed as target for five
term loans disbursed during years
FY2017-18 • So far, 1,98,000 farmers and
• INR18.34 billion (USD282 million) 83,744 Ha implemented in AP
tenant loaning for 6,00,000
farmers in FY2017-18

Key reforms/plans in place


• Promotion of integration of technology (primarily wherein officials visit the farm twice a week to
farm mechanisation) with agriculture for promote advanced technology among farmers05
improving efficiency of agriculture and related
• The state has partnered with ‘Sustainable India
sectors03
Finance Facility’ (SIFF) a collaborative initiative
• Micro irrigation, drip irrigation, ‘panta sanjeevani’, of United Nations (UN) Environment, World
rain gun, farm ponds and drought proofing Agroforestry Centre, and BNP Paribas for scaling
measures being implemented up natural farming06
• Organised national seminar on ‘Trends in Farm • Andhra Pradesh Integrated Irrigation &
Mechanisation and Engineering Interventions Agriculture Transformation Project (APII&ATP)
for Sustainable Agriculture’ to promote use of being implemented with World Bank’s
technology in agriculture04 assistance of INR16 billion (USD296 million)07.
• Organised ‘Chandranna rythu kshetralu’
and ‘Polam-Pilustondi’ (Farm is calling) campaign

03. Sunrise Andhra Pradesh, ‘Achieving Sustainable Development Goals 2030 – Baseline, Targets and 06. Andhra Pradesh plans to scale up zero budget farming with UN-backed SIFF, The Economic Times, 25
Strategy’ January 2018
04. AP to set up 1000 Custom Hiring Centers, The Hindu, 20 January 2017 07. Andhra Pradesh Agriculture Budget 2017-18
05. Sunrise Andhra Pradesh, ‘Achieving Sustainable Development Goals 2030 – Baseline, Targets and
Strategy’

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Major achievements

• Soil health cards: • Fisheries has been identified as one of the


growth engines for achieving double digit
–– Distribution of 1 million ‘soil health cards’
inclusive growth
carrying recommendations on crops and
rectification of micronutrients deficiency • Andhra Pradesh – The aqua hub
in soil08
–– Andhra Pradesh ranks #1 in marine product
• About 27,000 Ha areas covered under micro- exports, aquaculture shrimp production and
irrigation from 2014 to 2017 area under aquaculture with its contribution
• Procurement and supply of seeds through of 42.62 per cent, 70 per cent and 30 per cent
Aadhar-enabled web land based biometric respectively to the national share.10
system-enabled transparency and plugged the
field level manipulations in seed distribution
• Horticulture registered a growth of 16.97 per
cent in 201709

Future plans/potential investment opportunities

• Introduction of ‘Seed Act’ to standardise quality • Establishment of freshwater fish brood banks
of seeds and certified seed nurseries
––A mega seed park in Kurnool to set-up world • Building of air cargo facilities for promoting
class laboratories, seed processing facilities, exports of fish
R&D centres and facilities with international
quality to export the seed11
• Develop itself as a major ‘horticulture hub’ with
net sown area upto 35 per cent over the next
three years12 - INR2 billion (USD37.04 million)
outlay for horticulture
• Fisheries and livestock are major growth engines
of state’s economy
• Mechanise 60 to 70 per cent of farming and
allied activities as against the current 20 per
cent13
• Set-up 1,000 CHCs – opportunity for
organisations dealing in manufacturing
agricultural machinery/farm equipment14
• Plan to scale up ZBNF to six million farm-lands
across the state through farmer outreach15
• Increase horticulture acreage from 4 million
acres to 10 million acres over the next six years
• Introduce micro-irrigation with precision irrigation
techniques in horticulture

08. Collector’s Conference, 19 January 2018 12. Andhra Pradesh Agriculture Budget 2017-18
09. Annual Report 2016-17, Planning Department, Andhra Pradesh 13. AP to set up 1000 Custom Hiring Centers, The Hindu, 20 January 2017
10. AP Food Processing Society, Department of Industries & Commerce (FP), Government of Andhra 14. AP to set up 1000 Custom Hiring Centers, The Hindu, 20 January 2017
Pradesh – accessed on 12 February 2018 15. Andhra Pradesh plans to scale up zero budget farming with UN-backed SIFF , Economic Times, 25
11. Will develop State as seed capital, says Naidu, Economic Times, 10 October 2017 January 2018

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34

Case studies

Avanthi Frozen Foods Pvt Ltd


• Annual shrimp production in Andhra Pradesh is
6,77,000 MTs and export is 3,00,000 MT
• Avanthi Frozen Foods has set up a Shrimp
Processing Unit in East Godavari with an
investment of INR1.15 billion (USD17.8 million)
• The unit uses world class technology and
provides employment to 1,000 people directly
and 3,000 indirectly
• Farmers covered under the project: 5,000
• Unit has been given a sanctioned grant of
INR50 million (USD776,500) with sanctioned
interest subvention of INR25 million
(USD388,250)

Vijayanagar Food and Nutraceuticals


Pvt. Ltd
• Andhra Pradesh ranks fourth in production of
coconut of 1,427 million nuts per year in India
even though the processing and value addition
of coconuts is meager in the state
• Vidyanagar Food and Nutraceuticals Pvt. Ltd is
the first company in Andhra Pradesh to come
up with a large Coconut processing plant in
Srikakulum with and investment of INR70
million (USD1.08 million)
• The unit plans to process the coconuts of
2,00,000 nuts per day which will benefit 2,500
farmers in better price and development of
livelihood in their villages.
• The unit uses world class technology with fully
automated DCS system control and provides
employment to over 500 people directly and
1,500 indirectly.
• Products: Extra virgin coconut oil, edible oil,
roasted coconut oil, desiccated coconut powder
high and low fat, cocopith, cocofhiber, coconut
water, coconut milk

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Energy
Sector overview

Installed capacity (MW)


T&D losses (%)

22,298 13.91%
CAGR: 8.7%
9.82%
8,307
MW

FY14 FY17 FY14 FY17

Source: http://www.cea.nic.in/reports/monthly/installedcapacity/2017/installed_capacity-03.pdf

Per capita consumption (kWh)

1,105
kWh

• 100 per cent household electrification


957 • 24x7 power supply
• 99.95 per cent transmission system
availability
FY14 FY17

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Key reforms/plans in place Major achievements17


• Investment of INR92.35 billion (USD1.43 • Currently ranked #1 among all Discoms
billion) in T&D segments since June 2014, under ‘Ujwal DISCOM Assurance Yojana’
thereby ensuring robust T&D infrastructure in (UDAY)
place
• Ranked #1 in 2016 by the World Bank in
• INR9.22 billion (USD143 million) under energy efficiency
the ‘Deen Dayal Upadhyaya Gram Jyoti Yojana’
• Power surplus state from 22 MU deficit per
(DDUGJY) and INR6.5 billion (USD101 million)
day in June 2014
under the Integrated Power Development
Scheme (IPDS) sanctioned by GoI for taking • Reduced T&D losses from 13.40 per cent to
up various activities in rural and urban areas 9.80 per cent which is currently the lowest in
respectively the country
• High Voltage Distribution System (HVDS) for • World’s largest solar park at Kurnool with
providing 49,319 agricultural services under 1,000 MW capacity
the Japan International Co-operation Agency
• Technology interventions such as ‘Andhra
(JICA) at an estimated cost of INR2.65 billion
Pradesh Vidyut Pravah’, ‘Urja Mitra’, ‘Kaizala
(USD41.3 million)
mobile application’ developed by Microsoft,
• The GoAP released new wind and solar System Average Interruption Duration
policies during 2015 with a plan of adding Index (SAIDI), System Average Interruption
5,000 MW of solar and 4,000 MW of wind Frequency Index (SAIFI) across the value
energy in the state by 2022 chain of the power sector have enhanced
accountability
• Subsidy of INR37 billion (USD5.76 billion) is
provided by the state government for farmers • Distributed 2,17,000 LED bulbs and 2,61,000
towards free power supply during the current energy efficient fans, replaced 6,18,000 street
year. lights and 8,350 non-ISI pump sets under
various Demand Side Management (DSM)
initiatives.

Future plans/potential investment opportunities

• APGENCO is contemplating the addition of • Setting up of world’s solar-wind hybrid park


11,210 MW at an estimated cost of INR665.38 with storage facility for 160 MW capacity at
billion (USD10.23 billion)* over the next 10 years Muthavakunta and Kanaganapalli villages
in a time bound manner
• Installation of solar micro grids and decentralised
• Installation of around 1 million smart meters in solar power generation plants
the state
• Around 1,00,000 in-efficient pump sets are
• Lowering of cost of power purchase by addition proposed for replacement with energy efficient
of ‘smart local solar grids with energy storage’ ISI pump sets during the year
• Reduce T&D losses to around 5 to 6 per cent by • Electric charging stations for future electric
taking up local smart grid with wind solar hybrid vehicles are in pipeline
along with storage
• 4,000 MW capacity solar parks being developed
in Anantapur, Kurnool and Kadapa districts.

*APGENCO website, Ongoing Projects

17. Department of Energy, GoAP – accessed on 12 February 2018

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Case study18

• The state was facing severe energy deficit • For agricultural consumers seven hours power
(22 MU per day) at the time of formation in is being supplied which is to be increased to
June 2014 nine hours in a phased manner
• The GoAP invested to double the installed • 100 per cent household electrification was
capacity over the last 3.5 years. The energy met achieved on 8 June 2016
has increased from 43,810 MU during 2013-14
• Reduction in power purchase cost (From
to 54,257 MU* during 2016-17, registering an
INR4.35/unit in 2015-16 to INR3.80/unit in
increase of 8.7 per cent annually. The peak
2017-18) helped in achieving much needed
demand has increased from 6,549 MW to
affordability
8,000 MW, registering an increase of 22 per
cent. • So far, 6,554 MW capacity RE power projects
*http://www.cea.nic.in/reports/monthly/powersupply/2017/psp_energy-03.pd have been installed in the state which includes
3,820 MW of wind power and 2,145 MW of
• Currently, 24x7 power is being supplied to all solar power.
consumers in the state including rural areas Source: http://nredcap.in/PDFs/Tenders/RE_Status_31_01_2018.pdf

18. Department of Energy, GoAP – accessed on 12 February 2018

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32

Education and skill development


Sector overview Andhra Pradesh’s
The state achieved nearly 99 per cent enrollment at competitive advantage
schools at the elementary level and 91.5 per cent at
the secondary level in 2016-17.
• Dedicated Skill & Knowledge Mission set up
to transform the State into an education and
knowledge hub
Skilling the masses - number in million
• Top institutes like AIIMS for medical
education, NID (National Institute of Design),
IITs to impact world class technical education
and many top universities and private colleges
12.1
9 • Focus on transforming the workforce into skill
6 ready and industry ready in line with global
3
best practices
Source: Sunrise Andhra Pradesh Vision 2029, AP Socio-Economic Survey 2016-17
2017 2018 2019 2020
Year

Source: AP Socio-Economic Survey 2016-17

32. AP Socio-Economic Survey 2016-17


Sunrise Andhra Pradesh Vision 2029, Vision Management Unit INNOVATION APSDPS, Planning Depart-
ment, Government of Andhra Pradesh, July 2017
Andhra Pradesh SDG Report 2017
Andhra Pradesh State Budget 2017-18

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39

Intermediate
School education Collegiate education Technical education
education

• 61,528 schools • 3,264 junior colleges • 287 degree colleges • 1,360 professional
colleges
• Enrolment - 6.85 • Enrolment -5,40,000 • Enrolment - 1,85,000.
million. (first year). • 3,131 polytechnical
colleges
• Enrolment - 4,00,000.

Major achievements33 Key reforms/plans in place


• The state has built primary schools within 1 • The ‘Sarva Siksha Abhiyaan’, ‘Rashtriya
km and upper primary schools within 3 km of Madhyamik Siksha Abhiyaan’ are two schemes
all habitations in the state aimed at reinforcing education in
schools in accordance to the enrolment, quality,
• In primary education, ratio of girls to boys has
access as well as retention
improved from 0.94 in 2014-15 to 0.95 in 2016-
17. For secondary level, the ratio has stood at a • Under the centrally sponsored Rashtriya
commendable level of 1.01 over the past two Uchchatar Shiksha Abhiyan (RUSA),
years construction of new model degree colleges in
six districts are under progress with an outlay of
• A total pf 120 Jawahar Knowledge Centres
INR120 million (USD1.8 million)
were established in government degree
colleges and 14,460 students were trained • Andhra Pradesh has taken up women and
over 250 hours girl child focussed schemes such as ‘Maa Inti
Mahalakshmi’ to support girl children from their
• Around 1,638 schools have digital classrooms
birth until they complete their graduation
out of the proposed 5,000 schools during
2016-17 and 2017-18 with a total cost allocation • The state’s efforts to universalise elementary
of INR450 million (USD6.9 million) education for all children have been channelised
through a dedicated campaign called ‘Badi
• E-Hazar – Aadhaar enabled Biometric
Pilustondi’ (school is calling)
Attendance implemented in >41,600 schools
to improve student and teacher attendance • Under academic stream, priority has been
given for establishing 275 CM’s skill excellence
• Collaboration with a European multinational
centres in engineering colleges and 390
software company to setup world class ‘3D
employability skill centres in degree colleges
experience’ labs in various engineering
with a total target to train 3,00,000 youth
colleges with a target of training 1,00,000
youth in next three years • Under non-academic scheme, priority has been
given to job fairs, Youth Training Centres (YTC-
• A total of 98,617 unemployed youth have
Tribal) and upskilling with the target of training
benefitted under the non-academic stream out
1,30,000 youth
of which 75,413 were placed through job fairs
so far. • In collaboration with a German conglomerate,
total 40 centres (6 CoEs and 34 Technical Skill
Development Institutes (t-SDI)) have been
established with a capacity to train 1,00,000
of which 25,233 candidates have been trained
so far.

33. Sustainable Development Goals Status Report 2017 & Way Forward, Planning Department, Government
of Andhra Pradesh
Andhra Pradesh State Skill Development Corporation
AP Socio-Economic Survey 2016-17

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40

Future plans/potential investment opportunities


• Virtual class rooms have been proposed in • Sector specific training programs have been
around 3,500 schools as a remote education proposed in FY2018-19 by engaging well known
solution. industry bodies, government institutions and
Sector Skill Councils with a target of training
• By 2029, the state targets to train 18.5 million
1,00,000 unemployed youth in FY2018-19
youth in employable skills
• Drones skilling program, which is first of its kind
in the whole country has been initiated with
a target to train 120 in FY2017-18 and 1000 in
FY2018-19

Case study

Kasturba Gandhi Balika Vidyalayas (KGBVs)34


• There are 352 KGBVs in Andhra Pradesh out of
which 175 schools achieved a pass percentage
of 100 per cent in SSC 2015-16
• Around 54 students from KGBVs have secured
admission in IIIT for the academic year 2016-17
• Special care is being given to CWSN (Children
with Special Needs) studying in KGBVs
• In 2016, a deaf-mute student scored a GPA of
10/10.

e-KGBV
• Andhra Pradesh is the first state in the
country to introduce digital class rooms in
all 352 KGBVs and also proposed to provide
intermediate education in at least one KGBV
per district from the academic year 2017-18
• 13 KGBVs are proposed for upgradation as
junior colleges in the first phase
• Solar power systems were provided in 65 KGBV
schools in remote/agency areas towards self-
sufficiency in power generation
• NCC units are proposed for all KGBVs during
this year to build up self confidence among
KGBV girls
• ‘Magic English Second Language Learners
Programme’ in KGBV schools is a two-year
immersive English language programme
aimed to rapidly improve the English speaking
proficiency of children from predominantly
non-English environments in collaboration with
Karadipath organisation with support from
UNICEF.

34. AP Socio Economic Survey 2016-17, Planning Department of Government of Andhra Pradesh

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41

Andhra Pradesh State Skills Development Corporation and a German


conglomerate company initiative35
• First of its kind as a single platform in capacity • Sectors and trades covered: Automobile,
building with various skill set and giving priority Aerospace and Defence, Mineral Based
for all core sectors by giving more priority Industries, Electronics and IT, Agro & Food
to ‘Make in India’ Processing.
• CoEs are equipped with state-of-the-art tools
Student training model:
and technologies and serve as a ‘Technical
Knowledge Resource’ for industry and a ‘Hub’ • Student profiling: Will be informed by
for t-SDIs respective college for registration/maintenance
of the database of students’ profiles
• ‘t-SDIs’ are focused on skilling students in
vocational trades at the Polytechnic/ITI level • Training: The company ‘learning methodology’
involves experiential learning techniques to suit
• Target group: Engineering and Polytechnic
the industry needs
candidates (including alumni), ITI and school
dropouts. • Assessment: Continuous evaluation of students
through tests and assignments
• Certification: On successful completion of
course and assessment, a student will be
6 CoE’s issued a certificate from the company.

Established 31
labs in 40 engineering
institutions colleges

34 t-SDIs

35. Andhra Pradesh State Skill Development Corporation

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42

Infrastructure: Ports and airports


Sector overview

5 operational non-major ports; 1 major port and 3 non-major ports under development

Bhavanapadu
Meghavaram
Visakhapatnam
Gangavaram Port
Coal, Coke, Fertilizer & FRM, Iron Ore
Kakinada
SEZ Kakinada Deep Water Port
Coal, Fertilizer & FRM, Granite, Alumina, Sugar
Machilipatnam
Kakinada Anchorage Port Legend:
Vodarevu Rice, Cement
Operational Port
Rawa Port (Captive)
Crude Oil Under development

Andhra Pradesh Narsapur Proposed


Ramayapatnam
Major Port
Krishnapatnam Port (top commodities handled at Operational
Coal, Containers, Edible Oil, Limestone, Granite
Dugarajapatnam Non-Major Ports are shown in Italics)

AP non-major ports handled 69.81 million MT cargo during FY2016-17


Cargo volume at AP non-major ports has grown at 19.7% during FY2017-18 vis-à-vis FY2016-17
(up to December)

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43

Andhra Pradesh’s competitive advantage

Ports
• Among the ports on the East coast of India, the state’s ports have the highest draft and combined
capacity
• The state’s ports enable reduction of total transit time to 2 to 3 days compared to the West coast of
India for cargo movement from/to the East of India

Share of AP in the total cargo Total cargo handled at Andhra Pradesh ports
handled at Indian Ports - FY2018*

CAGR: 5.8%
23% GJ
40% 146.1
MH 116.50
62.9
58.5
AP
11% 58.0 83.2
TN
FY14 FY18*
13% Others
13% AP Major Ports AP Non-Major Ports

*Values pro-rated for FY18 based on traffic till December 2017 Source: Indian Ports Association, accessed on 12 February 2018
Source: Department of Ports, GoAP, accessed on 12 February 2018

Airports
• Five operational airports in Andhra Pradesh
• New Greenfield International Airports at Bhogapuram (Vizianagaram district), Dagadarthi (Nellore
district) and domestic airport at Orvakallu (Kurnool district)
• Robust intra-state connectivity with regular scheduled commercial flights

Air traffic movement at Andhra Pradesh Passenger traffic data on Andhra Pradesh
airports (in 000's) airports (in millions)
Air traffic movement (in 000's)

60 4.0
3.8
Passengers (in millions)

50 47
3.0 2.8
40 38
30 26 2.0
1.6
20
1.0
10
0 0.0
FY14-15 FY15-16 FY16-17 FY14-15 FY15-16 FY16-17

Source: Airports Authority of India, accessed on 12 February 2018 Source: Airports Authority of India, accessed on 12 February 2018

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44

Employment opportunity
Volume of cargo at Andhra Pradesh
airports (in 000's MT) • Every INR100 expenditure produces
benefits worth INR325 for the local
economy
6.00
• Every 100 direct jobs result in 610 new jobs
Cargo in 000's MT

4.62
created in the local economy
4.00
2.87 2.95

2.00

0.00
FY14-15 FY15-16 FY16-17

Source: Airports Authority of India, accessed on 12 February 2018 Source: International Civil Aviation Organization, accessed on 12 February 2018

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45

Ports
Key reforms/plans in place
• Andhra Pradesh Port Policy has been notified
in November 2015
• Inland vessel rules for the state have been
notified
• Constituted AP State Sagarmala Committee
• AP Maritime Board Bill submitted to GoI for
Presidential assent.

Major achievements

• Department of Ports successfully


implemented Phase 1 of the Smart Port
System
• Prepared a holistic maritime concept master
plan
• Reduced VAT on bunkering to among the
lowest in the country
• Center of Excellence (CoE) built for deep sea
and allied technologies
• Logistics university is being planned
• Setting up a number of multi-modal logistics
parks at various locations in the state.

Future plans/potential
investment opportunities

• New ports – for the new capital city


Amaravati at Machilipatnam, a Greenfield
port at Bhavanapadu and KSEZ Port are
planned
• Nine new passenger jetties are planned for
development of tourism in the state
• Integrated ship engineering complex cum
shipbuilding facility is under the initial stages
of conceptualisation.

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46

Airports
Key reforms/plans in place
Andhra Pradesh Civil Aviation Policy – 2015 was • Provide Viability Gap Funding (VGF) for
released by GoAP to support robust growth of underwriting seats in airlines for underserved
aviation sector in the state to sectors
• Proactively reduce the tax on Aviation Turbine • Provide Stamp Duty and Property Tax
Fuel (ATF) from 16 per cent to 1 per cent reimbursements for aircraft Maintenance, Repair
and Operations (MRO), air cargo infrastructure,
• Assist with land acquisition and pooling for airport
aviation education training.
development
• Provide incentives/reimbursements to encourage
development of airports and airlines to connect
the cities of Andhra Pradesh

Major achievements
• Passenger traffic growth is one of the highest • Capacity addition and airport expansion of
in India with passenger traffic recorded at 3.8 airports at Rajahmundry, Vijayawada, Tirupati and
million in FY2017-18 Vizag airport.
• Development works underway at Orvakallu
in Kurnool district at a cost of INR885 million
(USD13.77 million) on 1,010 acres on EPC basis

Future plans/potential investment opportunities


• Development of Greenfield International Airport • Administrative air strips planned to be developed
at Bhogapuram and Dagadarthi in Kuppam and Bobbili to facilitate intra-state air
connectivity
• Capital investments, presence of prominent
tourist destinations coupled with major • Infrastructure development upgradation plans for
pilgrimage centers are boosting demand for Nagarjunsagar, Kuppam and Donakonda airport
enhanced air connectivity to enhance air connectivity
• With passenger growth increasing at 30 per • Regional flights with nine seater aircraft
cent, more than 5 million passengers are planned to operate on Vijayawada – Puttaparthi,
envisioned to fly through state’s airports in 2019 Vijayawada – Kadapa to boost intra-state
connectivity
• International flights envisaged to commence
from Vijayawada and Tirupati Airport in 2018, • Attractive investment opportunities for airport
which may trigger further development of region developers, airline operators and aviation
through direct air connectivity from the Middle- infrastructure developers across Andhra Pradesh
East and far-East and supported by attractive policies from the
central government.
• To support robust increase of traffic, GoAP
envisages to develop regional airports across 8
districts to enhance domestic and intra-state air
connectivity

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47

Information Technology and Electronics


Sector overview25
487 >50 per cent CAGR
~44,000
IT and electronics Influx in IT and Electronics
People employed
units Units since 2014

AI Cloud Hub Policy >7,400


First state in the country to have policy on MeeSeva Centers in the state
Artificial Intelligence and Industry 4.0 catering to 110 million transactions

>23,000 kms Animation and FinTech Valley


Of optic fiber gaming city Global hub for FinTech
cable laid To be established in Vizag established in Vizag

Hybrid cloud Brand ‘Amaravati’


~40,000 sq. ft.
First state to implement Promotion of handicrafts and handlooms
Of incubation space improving the livelihood of artisans and SHGs
hybrid state data center

Kaizala Blockchain Grounding


First state to pilot Hosted Asia’s biggest of marquee
mobile governance blockchain conference companies

25. Information Technology, Electronics and Communication department, GoAP – accessed on 12 February 2018
Andhra Pradesh Electronics and Information Technology Agency – accessed on 12 February 2018
Andhra Pradesh Innovation Society – accessed on 12 February 2018
Meeseva Official Portal - Government of Andhra Pradesh - accessed on 12 February 2018

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48

Andhra Pradesh’s Major achievements26


competitive advantage
• Implemented projects such as CORE
dashboard, e-Seva, and e-procurement for
• Diverse range of policies extending best in transparency in governance
class fiscal and non-fiscal support for sub • Grounding of marquee names in the state
sectors within IT and Electronics
• Enabling infrastructure and creation of • More than 2.5 million sq. ft. of built up area for
knowledge economy plug and play operations
• Leader in adoption of disruptive technologies • The state has established two Electronic
such as blockchain, IoT, cybersecurity, data Manufacturing Clusters (EMCs) in Tirupati and
analytics, machine learning, etc. has received three in-principle approvals for
• Lower operating costs compared to setting up of Greenfield EMCs in the state. In
Tier 1 locations. addition, the state has applied for approvals for
four additional EMCs
• The state has developed four incubation
centers which are operated by organisations
Key reforms/plans in place such as NASSCOM, 7INQ, Govin Capital and
IC2 University of Austin Texas
• The state has applied for approvals for four • Skill development training to 15,000 ITIs/
additional Electronics Manufacturing Clusters Polytechnic students of IT/Electronics through
and 4 IT SEZs NIELIT, GoI, which is being implemented
• Formulation of animation, gaming, visual and by AP State Skill Development Corporation
comic policy to spur growth in the sector (APSSDC)

• Adoption of blockchain technologies in • Established International Institute of Digital


government records and transactions Technologies (IIDT) in Tirupati, a world class
institute on digital technologies
• 10 million rural population to be IT literate by
2019 • Laid >23,000 kms of fiber across the state to
provide high speed connectivity to enterprise
• Establish Vizag as India’s FinTech capital and households.
• Provide internet connectivity to all
villages – ‘Digital Andhra Pradesh’
• Centre of Excellence for Internet of Things.

26. Information Technology, Electronics and Communication department, GoAP – accessed on 12 February 2018
Andhra Pradesh Electronics and Information Technology Agency – accessed on 12 February 2018
Andhra Pradesh Innovation Society – accessed on 12 February 2018
Andhra Pradesh State Fibernet Limited - accessed on 12 February 2018
AP State Skill Development Corporation- accessed on 12 February 2018
e-Pragathi, Information Technology, Electronics and Communication department, GoAP – accessed on 12 February 2018

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49

Future plans/potential investment opportunities


Andhra Pradesh aims to: • Contribute 5 per cent share to the national
software exports
• Achieve leadership position in the country in
terms of providing qualitative and quantitative • Produce one entrepreneur from each family
e-services
• Establish 100 incubators and accelerators
• Establish the state as ‘Silicon Corridor of India’
• Incubate atleast 5,000 companies and startups
• Attract investments of USD2 billion in IT and
• Create 1 million sq.ft. of incubation space
USD5 billion in electronics manufacturing
• Mobilise venture capital to the tune of USD200
• Generate 1,00,000 jobs in IT and 2,00,000 jobs
million.
in electronics

Case study

e-Pragati Authority has made rapid progress in • Core dashboard: Helps track the progress of
converting GoAP in to the first digitally transformed various government schemes across all 33
state government in India. The year 2016-17 was departments. The Core dashboard has 46 cards
declared as the ’Year of e-Pragati’ for bird’s eye view and operational view, tabular
views for 34 cards, links for 10 cards and
In order to ensure that government departments
analytics view for 2 cards.
are adequately equipped and facilitated with ICT
tools following actions were undertaken • Localisation: To increase the outreach of the
government online service delivery platform,
• Core platform: An integrated platform with
e-Pragati has undertaken a mammoth task of
exhaustive features and a components list
renovating existing government portals in the
which would be supported through four key
Telugu language. More than 130+ websites
functionalities
have been identified for translation into Telugu.
• ISB training programme: The authority signed
a MoU with Indian School of Business,
Hyderabad to conduct training programmes

The e-Pragati Authority Year 2016-17

01 Core platform

02 Localisation ‘Digital Andhra


Pradesh’
(The e-Pragati
authority)
03 Change management and capacity building

04 CM core dashboard 2.0

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Industries
Sector overview
Industry sector comprises mining and quarrying, in FY2016-17. Despite being a largely agrarian state,
manufacturing and construction. Industry sector Andhra Pradesh has shown tremendous progress
registered a growth rate of 10.05 per cent with in industrial development. Structural reforms
estimated GVA of INR1.31 trillion (USD20.8 billion). undertaken by the state have helped in accelerating
Manufacturing registered a double digit growth with industrial growth.
estimated GVA of INR508.62 billion (USD7.83 Billion)

Indusrial Gross Value Add (GVA) in Manufacturing Gross Value Add (GVA) in
USD billion (CAGR - 10.16%) USD billion (CAGR - 10.5%)

9
25
8
20 7
6
15 5
4
10
3
5 2
1
0 0
2014-15 2015-16 2016-17 2014-15 2015-16 2016-17
Year Year

Source: Andhra Pradesh Socio Economic Survey 2016-17 Source: Andhra Pradesh Socio Economic Survey 2016-17

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51

Andhra Pradesh’s Major achievements


competitive advantage
• Double digit industrial and manufacturing GVA
growth with CAGR of 10.16 per cent and 10.50
• Robust policy environment through industrial
per cent respectively between FY2014-15 to
and sector-specific policies, with leading
FY2016-1727
policy instruments and fiscal incentives
• GIS-enabled large industrial land bank; online • Over 300 large and mega units (across
process for application, processing and sectors such as automobile, engineering,
payments pharmaceuticals, food processing, chemicals,
since June 201428
• Lower prices for Industrial land against
comparable Indian states; Land given on • Single Desk Portal (SDP) – for all industrial
outright sale basis approvals, identified as a best practice by the
• Focus on industrial corridors for development World Bank
• Guarantee of industrial clearances through • First state in South India to offer 24x7 quality
Public Service Delivery Guarantee Act, 2017 and reliable power to industry
• Second largest coastline in India (974 km) • Two large industrial corridors being developed
provides for high export potential. - Visakhapatnam Chennai Industrial Corridor
(VCIC) and Chennai Bengaluru Industrial
Employment Corridor (CBIC)
>90,000 employment committed through large • Proposed for establishment of Coastal
and mega grounded units Economic Zone (CEZ)
1,33,000 additional employment by 2019 • Attracted FDI of USD 2 Billion from a South
>2,85,000 employment generated by MSMEs Korean automobile manufacturer including
in last 3.5 years associates and vendors
• National Leader in Ease of Doing Business
– 1st Rank in Business Reform Action Plan
framework of DIPP and World Bank
• More than 25,000 industrial approvals granted
through SDP since June 2015.
Investments
> INR380 billion (USD5.85 billion) of L&M
investments grounded over the last 3.5 years
(across Industries, FP and Textiles)
INR1,480 billion (USD22.8 billion) of L&M
investments in advanced stages
MSME – INR109.94 billion (USD1.69 billion)
investments grounded from FY2014-17

27. AP Socio Economic Survey 2016-17


28. Andhra Pradesh Investment Tracker, accessed on 12 February 2018

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Key reforms/plans in place

• Industrial Development Policy 2015-20 and six • Guarantee of service through ‘Public Service
industrial sectors (Aerospace and Defence, Delivery Guarantee’
Automobile and Auto component, Biotechnology,
• Online system for processing and sanction of
Food Processing, Textiles and MSME) policies in
industrial incentives
place providing best in class incentives
• Streamlined process for providing external
• SDP – Provides Industrial approvals covering
infrastructure to mega projects
19 departments, 15 spot approvals, 6 approvals
granted with a week, 8 approvals within 15 days • Online investment tracking for monitoring
and 17 approvals within 21days lifecycle of investments from DPR submission to
commercial production.
• Spot approvals for allocation of raw materials
such as coal and ethanol

Future plans/potential investment opportunities


• State of the art MSME parks with plug-and-play processing infrastructure
facilities to be developed in each of the 175
• Presence of electronic manufacturing clusters
Assembly constituencies; thereby providing
in Visakhapatnam, Tirupati and Anantapur;
opportunity for Industrial park developers and
opportunities for manufacturing and assembling
MSME investors
of mobile phones, tablets, LEDs and other
• Increased focus on electric mobility solutions, electronic components
opportunities available in EV/battery/Electric
• Two VCIC nodes (Visakhapatnam and
components manufacturing
Srikalahasthi – Yerpedu in Chittoor) which are in
• Ultra mega food park coming up in Kurnool, and advanced stages present immense opportunities
mega food park at Mallavalli (Krishna district), for investment across critical infrastructure and
provides opportunity to tap into Andhra’s manufacturing facilities.
abundant food produce for processing and food

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53

Case study29

Laying the red carpet for an investment of INR130 billion (USD2 billion) from South Korea’s oldest
motor vehicle manufacturer including associates and vendors
A South Korean auto major was exploring ways • Handed over around 587.84 acres of levelled
to enter the Indian market through a Greenfield land within three months
integrated car manufacturing facility. After
• Provisioning of external infrastructure facilities
evaluating several locations across the country,
at the selected site in a planned manner
Andhra Pradesh was selected to set up its
manufacturing facility. • Regular project monitoring under the leadership
of the Chief Minister
Actions taken by the state include
Proposed Outcomes
• Presenting the initial pitch presentation
showcasing the state’s best case scenario -- Production of 3,00,000 vehicles per annum
-- 4,000 direct and 7,000 indirect jobs
• Providing site options across various locations
with details of infrastructure facilities available -- Development of an ecosystem of automobile
component manufactures around Anantapur
• Addressing investor queries on aspects such
as policy framework, incentives and physical
infrastructure

Speed of execution

January 2019
April 2017 May 2017 (Target trial production)
(Signing of MoU) (Site levelling and land allotted)

May/June 2017 August 2017


(Temporary utility connections) (Start of construction activities)

29. AP Industries Department, GoAP – accessed on 12 February 2018

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54

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55

Irrigation
Sector overview
Andhra Pradesh has a cultivable area of 19.93 million acres out of which irrigation potential (IP) is created for
52 per cent area.

Cumulative ayacut stabilised by 'Neeru-Chettu' initiative


26%
Cultivabe
area - IP 5.2 L Ac.
created
10.36 million
51% acres 3.6 L Ac.
Non-cultivable
area 20.37 million 17%
acres Cultivable area - 1.4 L Ac.
to be created
6.96 million
acres
6% 2015-16 2016-17 2017-18
Cultivable area - ongoing (till date)
projects 2.61 million acres

Energy savings to the tune of INR5 billion (USD76.9 million) in FY2017-18 through conjunctive usage of water.
Highest rise in ground water levels as compared to last 17 years.
Sustainable on-farm water use practices with over 20.83 per cent of area irrigated with micro irrigation.

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56

Area covered under micro irrigation 7 7 8


7 8 8
-1 -1
7 t-1 -1 -1 -1 -1
ay l p ov n ar ay
M Ju Se N Ja M M
Million Hect.

0.00
0.83 CAGR: 4.8% 2017-18
5.00
0.69
2016-17
10.00

15.00

20.00
As on March 2016 As on March 2017

Andhra Pradesh’s competitive advantage

• The state is blessed with major east flowing • Real-time monitoring of water resources
rivers and has the potential to tap water to through a web portal connected to water
ensure 100 per cent water-security resource assets of the state
• Effective governance mechanism backed • Well entrenched participatory irrigation
by world’s best practices like drone based management with over 80 per cent of area with
reporting, virtual reviews, machine learning, big Water User Associations
data analytics, geo-tagging of water assets and • Legislation for protection of water bodies and
IT enabled planning and monitoring methods framework for rain water harvesting
• Core dashboard developed to showcase entire
water resource information of all the sources for
effective planning and implementation of all the
projects

Key reforms/plans in place


• First to link rivers out of all states in the
country, by linking of Godavari water to
Krishna’s basin through the ‘Pattiseema Lift
Irrigation Project’ (PLIP)
• Through the ambitious vision of interlinking all
the rivers in the state, 500 TMC of flood water
flowing into the sea every year is planned to
be diverted to drought prone areas. This year
alone, more than 100 TMC of water is diverted
to Krishna delta region
• Andhra Pradesh is striving to become drought
proof over the next five years.

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Major achievements16

• Record 144 TMC water supplied to Rayalaseema in 2017-18 through various projects
• Around 3,12,000 acres ayacut is brought under micro irrigation taking the total to 1.985 million acres

Project Achievement Impact

Early plantation of Kharif crop to an extent


Record quantity of 105.8TMC
of 1.308 million acres in Krishna Delta,
Pattiseema of water lifted from Godavari to
yielding crop with INR100 billion (USD1.53
Krishna’s basin during FY2017-18
billion)

Veligonda Filled with 16.95TMC of water for 96,961 acres irrigated under TGP in
reservoir the first time Kurnool District

37.34 TMC is supplied to TGP, 19.98 TMC


Pothireddypadu Record quantity of 82.22 TMC of
to KC Canal/Nippula Vagu & 24.9 TMC to
head regulator water supplied
SRBC/GNSS

Gorakallu 7.74 TMC of water is stored for the Facilitated supply of water to Gandikota
Reservoir first time through Owk Reserrvoir

Record storage created in


• Gandikota : 8.27 TMC
Water supplied to 1,40,000 acres ayacut
GNSS • Chittravati: 6.05 TMC
compared to 60,000 acres last year
• Mylavaram: 6.28 TMC

• Paidipalem: 3.5 TMC

Future plans/potential investment opportunities

• The state envisages implementation of latest • Special focus on mega projects such as
technologies in irrigation on a large scale for Polavaram to cater irrigation, industrial and
efficient use of irrigation water supplied and drinking water needs of state, and provide water
increased crop yield. security
• Various water conservation initiatives taken up • Emphasis on drone technologies and IT enabled
under schemes such as ‘Neeru-Chettu’, ‘Jala services for real-time monitoring
Samrakshna Udhyama Spoorthi’, ‘Panta Sanjeevini’
etc., to facilitate ground water levels reach
8 metres pre monsoon and 3 metres post
monsoon

16. Irrigation Department’s Presentation for Collectors’ Conference, 18 January 2018

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Case study

A mega project which broke the records


• The ambitious project of Andhra Pradesh’s • About 125 km away, in Tadipudi, West Godavari
Hon’ble Chief Minister, Chandrababu Naidu, district, heavy-duty pumps sprang to life. Water
the ‘Pattiseema Godavari-Krishna river linking from the Godavari gushed against gravity into
project’, has made it to the Limca Book of the Polavaram right main canal and entered the
Records for completion of the project in record Krishna about 18km from Vijayawada. The two
time, without any cost escalation. rivers were now linked, bringing 80 TMC of
water to the Krishna river.
• The foundation for the PLIP was laid on 29
March 2015, its phase one was inaugurated on • It is a boon to farmers as the surplus water
15 August 2015, making this river-linking not in Godavari will be used to cultivate 8,00,000
just peninsular India’s first but also one that has acres, which are currently dependent on
been achieved in record time. Krishna water and the monsoons. And the
water which flows into the Krishna barrage
from Srisailam and Nagarjunasagar dams
upstream will now be diverted to meet the
irrigation and drinking water requirements of
Rayalaseema.

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59

Mining
Sector overview
Revenue accrued to the state exchequer has been growing at a CAGR of 26 per cent over the last three years.

Mineral revenue Andhra Pradesh's contribution to India's mining GVA

5%
2.4
INR1,701/USD261.6

Minerals GVA (India)


(USD billion)

Minerals GVA
INR838/USD128.9 (Andhra Pradesh)
50.8 (USD billion)

FY2013-14 FY2016-17
Year

Source: Department of Mines and Geology, Government of Andhra Pradesh Source: Department of Source: Annual Report, Ministry of Mines, Govt of India, 2016-17
Mines and Geology, Government of Andhra Pradesh

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60

Andhra Pradesh’s
competitive advantage

• Home to 93.5 per cent of India’s barytes


resources
• Largest Uranium producing state in India
• Largest primary source of diamond in India
• Large deposits (327.3 MT) of heavy mineral
beach sands
• Third largest producer of limestone in India
• Home to premium granite varieties, such
as ‘Black Galaxy.
Source: Indian Bureau of Mines Statistical Profile for Minerals, 2015-16

Major achievements30 Key reforms/plans in place

• Andhra Pradesh becomes the fourth state to • Amendments have been made to the Andhra
successfully conduct the auction of a non-coal Pradesh Minor Mineral Concession rules to
mining lease rationalise the levy being collected from the
industry.
• The only state in the country to implement
Free Sand Policy for domestic consumption • Lease area restrictions have been introduced
to ensure a level playing field in the industry
• Computerised filing of applications and
monitoring of application status through • Mining Surveillance System has been
MeeSeva to ensure transparency and speedy implemented for major mineral leases in the
resolution of applications state
• Introduction of auto e-Transit passes for MDL • The introduction of automated e-Permit
holders has reduced manual intervention and has reduced manual intervention and has
has enhanced ease of doing business for enhanced ease of doing business
mineral dealers.
• Mineral Dealer License Rules 2017 has been
notified for online issue of license and e-Transit
pass.

Future plans/potential investment opportunities


• Auction of seven major mineral blocks, including • Third largest resources of granite in the country
six limestone blocks and one Gold Block, is in including premium varieties such as Black
the pipeline for 2017-18. Galaxy.
• A large number of major mineral blocks, • Lead-Zinc deposit in Bandalamottu, Guntur
particularly in Manganese ore and limestone, District.
currently under exploration, will be put up for
• Iron ore resources in Kadapa District.
auction in 2018-19

30. Department of Mines and Geology, GoAP – accessed on 12 February 2018

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61

Tourism
Sector overview19

GSDP contribution (USD billion) Domestic arrivals (million)

10.00 8.74 200


165
8.00 CAGR:21%
150 CAGR:21%
6.00 4.96
100 93
4.00
50
2.00

0.00 00
2014 2017 2014 2017
Year Year

19. Website of Andhra Pradesh Tourism Department – accessed on 12 February 2018

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62

Key reforms/plans in place


Foreign arrivals (thousands)
• Tourism Policy 2015-20 offers incentives
300 271 such as capital subsidy (for tourism services
250 only), concessional power tariffs, SGST
CAGR:60% reimbursement, complementary infrastructure
200 etc. to 12 types of tourism infrastructure
150 projects and 20 types of tourism services
• Governance of Tourism sector in the state is
100 66
streamlined through integration of tourism,
50 heritage and culture departments as Andhra
Pradesh Tourism, Culture and Heritage Board
00
2014 2017
headed by Hon’ble Chief Minister of Andhra
Pradesh, Chandrababu Naidu. This provides
Year greater autonomy and greater authority for
fast-tracking tourism sector development in the
state
• Andhra Pradesh Tourism Authority was formed
Andhra Pradesh’s and notified as nodal agency for development
competitive advantage of tourism sector in the state
• Skilled manpower in various aspects of tourism
are engaged to drive holistic development of
• Cultural heritage – hosts places of historical tourism sector
importance
• Land Lease Policy 2015-20 for tourism projects
• Spiritual heritage- Tirupati/Tirumala temple
is in force. It offers government land at a lease
has highest number of pilgrims in the world
rate of 2 per cent of market value (lowest in the
• Biodiversity - Eastern ghats, lakes, country)
backwaters add to tourist experience
• Clearances through Single Desk Portal are
• Ranked third in number of domestic tourists
provided within 21 days
• Robust Tourism Policy 2015-20 and Land
Lease Policy 2015-20 in place. Land lease-2 • State topped DIPP and the World Bank’s ease
per cent of market value, lowest in the of doing business rankings
country • Upgradation of existing hotels and other
facilities owned by the Andhra Pradesh Tourism
Development Corporation through PPP model
Employment opportunity
• Major tourism hubs being developed across the
About 10,000 jobs are created from 70 tourism state
projects in various stages of implementation
across the state • Greater focus on integration of Information
Technology into tourism services for improving
tourist.

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63

Major achievements20

• World Travel and Tourism Council recognised the • Emerging tourism destinations such as
policy with ’Policy Leadership’ award in 2015 Gandikota, Orvakal have attracted lot of attention
• About 150 projects worth INR100 billion • Vijayawada and Tirupati airports are accorded
(USD1.52 billion) and employment potential of international airport status thus enhancing
50,000 are in various stages of development. their prospects of being connected to many
INR33.8 billion (USD520 million) tourism international destinations
investments grounded21
• New airports in Rajahmundry, Kadapa are being
• Best National Tourism award 2017 by GoI connected with various cities in the country
under UDAN scheme which will provide tourists
• Best new hot spot destination 2017, at ITB Berlin
access to remote tourism destinations in the
• Domestic footfall have increased from 93 million state
in 2014 to 165 million in 201722. Top tourist
• Many innovative events such as Godavari Dance
destinations in the state are Tirupati/Tirumala,
and Lantern, Sounds on Sand, Amaravati Theatre
Visakhapatnam
Festival, Social Media Awards, Araku Balloon
• Foreign footfalls have increased from 66,000 in Festival, etc.
2014 to 2,71,000 in 2017. Top destinations are
Visakhapatnam, Puttaparathi and Tirupati
• Number of rooms available (3-star and above) in
the state have gone from about 6,000 in 2014 to
9,500 (projected) in FY2017-1823

Future plans/potential investment opportunities


• Development of new Buddhist, heritage, eco- • Developing TU 142, INS Viraat and Havelock
tourism circuits bridge into heritage tourism attractions
• Integrated beach tourism master plan to explore • Creation of tourism infrastructure at existing
974 kms of coastline and to promote coastal and new tourism destinations. This may be in
tourism the form of star hotels, homestays, wayside
amenities, services etc.
• Development of new tourism destinations such
as Polvaram, Orvakal, Gandikota, Konaseema etc. • Upgradation of tourism infrastructure through
PPP model
• Promoting village tourism, an emerging concept
of rural homestays to promote culture and • Standardisation of tourism services across
heritage of the state the state along with geo-tagging of all tourist
amenities in the state.

20. Website of Andhra Pradesh Tourism Department – accessed on 12 February 2018 22. Website of Andhra Pradesh Tourism Department, Footfall dashboard – accessed on 12 February 2018
21. Andhra Pradesh Online Investment Tracker – accessed on 12 February 2018 23. Andhra Pradesh Tourism Authority – accessed on 12 February 2018

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64

Case study24

Upgradation of existing hotels and other amenities of APTDC through PPP model
• APTDC owns a number of hotels and other • Detailed financial models were prepared to
tourism amenities in the state. It is proposed to forecast revenues and select suitable financial
outsource operation and maintenance of these indicators for the projects
facilities to improve their efficiency and there
• PPP structuring was done for the identified
by enhance tourist experience in the state
properties and development obligations for
• In order to help identify private investors, private partners were chosen
assess market demand and propose
• A standardised bid process was adopted for
appropriate business models, a transaction
selection of qualified and experience private
advisor was brought onboard
partners
• Extensive consultations were held with a large
• As a result, close to 15 properties were
network of domestic and global investors to
outsourced with an investment potential of
assess market demand and propose suitable
INR1.5 billion (USD23.08 million)
PPP models for upgradation
• ‘As-is analysis’ of existing infrastructure was
conducted to identify potential aspects of
upgradation

24. Andhra Pradesh Tourism Development Corporation – accessed on 12 February 2018

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65

Amaravati
After bifurcation, the state was posed with another Singapore, Japan and China models were studied
challenge of finding a feasible location to set up its before the core capital master plan work was given
capital city. An expert committee was formed after to a Singapore firm, and the design to a Japanese
consultation with GoI to study possible locations for company.
the capital.
Amaravati is envisaged as ‘a smart, green,
Keeping in view public welfare, access to all, sustainable city,’ with zones consisting of a central
centrality to state’s geography, rail, road and airways business district, residential areas, green zones and
connectivity, proximity to ports such as Kakinada, waterbodies.
Machilipatnam, availability of water, existing
Amaravati is currently in fast paced execution mode.
infrastructure to kick-start development, Amaravati
was chosen as the location for the state’s capital city.
Andhra Pradesh Capital Region Development Covered
Covered Covered
Authority (APCRDA) was formed by passing a under seed
under capital under capital
legislation ‘AP Capital Region Development Act area of
region city
2014’ for end-to-end planning, coordination and Amaravati
development of the capital development area. 8,603 km2 217 km2
6.84 km2
New capital in Amaravati was envisioned as not only
an administrative hub but also as a global economic
Consented
hub. Amaravati also promises to be an aesthetically
land owners Projected Projected
appealing city with state-of-the-art architecture.
under Land GDP by 2050 employment
According to the city plans, Amaravati is designed
Pooling USD35 by 2050
to have four prominent gateways resembling the
scheme billion 1.5 million
entrance of historic temples and have city squares
designed on the lines of famous Trafalgar and the 26,839
Duke of York squares.

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66

Amaravati development plan

Economic
Land Planning and design Construction
development

• 90 per cent of • Amaravati masterplan • Transit government • Master development


the total area of for 53,647 acres complex completed of start-up area
the project under notified
• Government housing • Private universities –
possession
• Master plan for for 3,840 employees VIT, Amrita, SRM
transit government’s under construction
• Public sector
complex by Fosters +
• Infrastructure worth organisations – RBI,
Partners
INR182.45 billion Indian Navy, CITD
• Infrastructure master (USD2.8 billion) is
• Higher education
plan for 3.5 million under execution
institutes – NID,
population
AIIMS
• Socio-economic
• Social infrastructure
masterplan, for
– top international
INR227.5 billion
schools and hotels
(USD3.5 billion)
economy • Healthcare – Indo-
U.K., leading heart
• Concept designs
institute in India,
for Assembly, High
leading eye institute
Court and Secretariat
in the region
finalised

Source: APCRDA – Collector’s Conference presentation, 18 January 2018 

Major achievements

• Fastest completion of people centric city • Identified as one of the 30 cities by the Smart
planning Cities Mission under the smart cities challenge
by Ministry of Housing and Urban Affairs,
• Innovative city financing - First and largest
Government of India. The Amaravati Smart
ever Hybrid Annuity Model for development of
and Sustainable City Corporation Limited
urban integrated infrastructure; leveraging land
(ASSCCL) has been constituted to oversee its
monetisation for long-term financial sustainability
development.
• Transit government complex brought governance
to the doorstep of people, eight years ahead of
schedule
• Largest ever successful voluntary land pooling
showcases the participatory approach of the
government

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67

Progress made31
Following economic development initiatives has • National Biodiversity Museum assigned
been undertaken in Amaravati identified site for acceptance
• Integrated university with 200 acres of allotted • Leading banks and financial Institutions to come
land is constructed and classes for engineering up in the capital region
courses have commenced. It is expected to
• MICE Hub, convention center with 10,000
generate 8,000 employment opportunities
seating capacity is under planning.
• Indo-U.K. institute of health with 1,000 bedded
hospital and allied components. Foundation
Snapshot of progress made
stone laid.
• National Institute of Design has engaged
National Building Construction Corporation
(NBCC) for construction of its buildings
• Andhra Pradesh Human Resources Development
Institute (APHRDI), a HRD training Institute with
Universities Schools
1,500 trainees is in the pipeline
• 1,000 students Eight top schools
• Central Institute of Toll Design (CITD) is a tool
enrolled till date including India’s
design institute that has identified the site for
• Overall planned top seven, offering
development
strength of IB, ICSE and CBSE
• Integrated university in 200 acres with 5,200 2,00,000 curriculum board
students along with 750 bedded teaching students. schools.
hospital has already commenced engineering
courses in August 2017
• Integrated university in 200 acres with 4,700
students along with 1,500 bedded hospital is
under progress
• State headquarters of the Reserve Bank of
Hotels Hospitals
India (RBI) has been handed over the site for
development. 9 global hotel Leading global and
brands evinced domestic chains
• Medcity healthcare and research institute, large are creating world
interest in setting
healthcare project with 1500 bedded hospital class healthcare
3-,4- and 5-star
and allied institutions about to start construction ecosystem in
hotels.
at the designated site Amaravati.
• Boat training rescue institute and state office of
the India Navy have been assigned the site
• Several schools (national and international) have
been proposed

31. APCRDA – Collector’s Conference presentation, 18 January 2018

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68

Case study

• The objective was to overcome the challenges


of building a Greenfield capital city by attracting
top quality investments in key sectors that kick-
start the organic and inorganic growth of the
city in a smart and sustainable manner
• After deliberation top quality investments in
key sectors were identified to be the crucial
step towards achieving sustained organic as
well as inorganic growth. Government’s transit Transit government complex
complex was used as an anchor to boost
investor confidence. • Six blocks with 6,00,000 sq.ft of built up area
• The transit government complex in Amaravati • 45 acres of area development
built in record time of 192 days. Governance • 6,000+ government employees
was brought to the doorsteps of people
of Andhra Pradesh, signaling stability to • Built in a record time of 192 days
the investors, and being the first anchor in • Government at the doorsteps of the people.
Amaravati to kick-start the economy.

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69

Way
forward

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70

Andhra Pradesh embarked on a transformation 04. Investor outreach and engagement to


journey with the objective of achieving double digital proactively ‘know the investor’ and ensure
growth and becoming the most developed state efficient redressal and grounding of projects
in the country by 2029. With time, new goals and
05. Thrust on industry mission to ensure equitable
reforms have been added as part of the journey to
investment across all identified focus areas
holistically transform the state into an inclusive and
such as aerospace and defence, automobile, life
happy society. Reforms have been aimed at making
sciences and biotechnology, food processing,
Andhra Pradesh a leading global destination with
minerals and textiles
desired standards of living, positioning the state as
India’s most-business friendly destination, and most 06. Inclusive and decentralised industrial
importantly keeping ‘people first’. development through industrial corridors,
industrial clusters, MSME parks will create
Undeterred by the challenge posed by the state’s
employment opportunities for its people, as
bifurcation and its impact on the state finances, a
well as offer investment opportunities in
mission-based approach of the state, coupled with
manufacturing, economic cities and infrastructure
quick integration of technology into every sphere of
development
functioning of the government is slowly positioning
Andhra Pradesh as an investment destination 07. Andhra Pradesh is the first state in the country
of choice. It is realised that achieving targets as to introduce blockchain technology for land
pronounced in its vision are critically dependent on records. A proof-of-concept is currently under
active engagement of private sector organisations development.
and civil society, while continually reshaping overall
08. A FinTech valley, with self-sustainable ecosystem,
governance mechanisms.
is coming up in Vishakhapatnam
In its endeavour to achieve the desired growth, a
09. Amaravati, the state’s capital city, is all set
structured approach is being followed to transforming
to emerge as a hub for opportunities across
economy and lives of citizens of Andhra Pradesh.
infrastructure, industry, health and education,
While laying huge focus on agriculture and allied
amongst other investment avenues in the capital
sectors, the state is continually focusing on bringing
city
the necessary structural shift in the economy to
industry and services. 10. Maintaining its national leadership in EoDB, state
is now looking at benchmarking itself against
New measures are also introduced as required to
the best in the world. The state is aiming to
strengthen the implementation of reforms.
become world’s most conducive business place
01. Adoption of SDGs to guide and drive the socio- by adopting leading practices on ease of doing
economic agenda of the state. These goals business.
have become the central point of the state’s
11. The state continues to strengthen its global
development. There are 17 goals and 169 targets
presence by representing in world forums and
that are prioritised by the state for a happy
forging partnerships with countries for mutual
inclusive and competitive society in future
development.
02. Real-time outcome monitoring system in place
While these reforms are yielding positive results for
for monitoring progress on social programmes
Andhra Pradesh, there is a long and exciting road
such as ‘Samaja Vikasam’ (basic amenities for
ahead for the state in consistently sustaining its
all villages), ‘Kutumba Vikasam’ (basic amenities
double-digit growth and setting new benchmarks in
for all families), SDGs, and seven key missions
governance.
launched as part of ‘Sunrise Andhra Pradesh
Vision 2029’ to trigger the state’s transformation
journey
03. Chief Minister’s Real-time Executive (CORE)
dashboard that enables reliable information
collation and sharing in a transparent manner

© 2018 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved
Acknowledgements
We acknowledge the efforts put in by the
following individuals in developing the paper:
• Sandeep Paidi
• Preeti Sitaram
• Priyanka Sharma
• Mahalakshmy Gopalswamy

We would like to thank the team below for


their contributions:
• Anand Paranjpe
• Ankita Bhattacharya
• Anupam Shrivastava
• Chandrasekhara Sarma
• Devendra Singh Rawat
• Himanshu Vidhani
• Karun Sareen
• Latika Sharma
• Manoj Gurramkonda
• Pavan Tej Yerur
• Prasad Rebbapragada
• Pratyush Poddar
• Santhosh T
• Satya Pavan Mummidi
• Sreekanth Sattiraju
• Srinivasa Rao Patnana
• Tushar Saxena
• Udaykiran Alamuru
• Priyanka Agarwal
• Rishabh Rane
• Shveta Pednekar
• Rasesh Gajjar
• Darshini Shah
• Shilpa Bhoir

from KPMG in India in preparing this publication.

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© 2018 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved
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