Vijayawada: Govt urged to release incentives to industries

Vijayawada (NTR district): Andhra Pradesh Chambers of Commerce and Industry Federation (AP Chambers) expressed happiness over the announcement of the new Industrial Policy 2023 and thanked the State government for considering some of its suggestions in the new policy and also for declaring the Logistics sector as an industry.

AP Chambers president Pydah Krishna Prasad, in a statement released here on Wednesday, said that they wish to bring to the notice of the government that many industries in the State are still waiting to receive the long-pending incentives. While Rs 200 crore incentives are due for the MSME units in the Food Processing sector, another Rs 200 crore to large units in the Food Processing sector is pending for a long time. Unfortunately, the pending incentives were not released by the State government when it released incentives to MSMEs in September 2021. Additionally, around Rs 1,400 crore to spinning and textile units and 1,000 crore to MSMEs pertaining to the remaining sectors are still pending. A couple of textile units were shut down recently due to obvious reasons and cash flow issues.

The MSMEs have been struggling for the last five to six years on account of the economic recession, Covid pandemic, and the Russia-Ukraine war. The production costs have gone up exponentially due to the increase in raw material, power, and logistics costs.

Logistics costs have gone up as fuel rates have increased to a great extent over the years. The raw material costs have doubled in the last two to three years. Labour costs have increased too. Power charges have increased tremendously on account of true-up charges, electricity duty and grid support charges. All these factors have made operating the units a difficult task.

The State government has come to the aid of industries by releasing incentives of Rs 1,124 crore in September 2021. With regard to the current pending incentives, the State government initially promised that they will be released by September 2022 and subsequently by January 2023 before the Global Investors Summit at Visakhapatnam. The timely release of incentives is crucial for the survival of the MSME sector. If the State government releases all the pending incentives immediately, the MSME sector will experience some relief and slowly get back on track for growth, Krishna Prasad said.

As MSMEs are the backbone of the State’s economy and provide large-scale employment, he requested the State government to release all the pending incentives and help them thrive.