Spurring growth surge in Andhra Pradesh

##BIG-IMAGE#In order to encourage manufacturing sector in the South India, the Centre has started putting in place infrastructural facilities along two industrial corridors: Chennai–Bengaluru Industrial Corridor (CBIC) and Visakhapatnam-Chennai Industrial Corridor (VCIC).

The government believes that developing economic zones close to seashore into manufacturing hubs will spell a bright future for the State. The AP government has already invited sealed bids from eligible bidders for construction and augmenting of power distribution capacity and for meeting industrial requirements at Rachaguneri, Naidupeta and Yerpedu in Chittoor district.

In the forthcoming days, the VCIC will expand from Pydi Bhimavaram in Srikakulam district to Chennai, connecting two Southern States, covering 3.5 per cent land of the country. This is going to be the first of its kind coastal corridor which involves an investment of Rs 1 lakh crores and would provide jobs to around 50,000 persons, besides providing indirect employment to several thousands.

Asian Development Bank (ADB) has come forward to extend long term investment. It will also support preparation of a conceptual development plan (CDP) and a regional perspective plan (RPP) for the VCIC, which includes identification of nodes for industrial development, high potential industrial sectors, and a set of priority projects.

By 2019, the first phase of this corridor will be completed. There will be 4 nodes in this corridor with clusters in each node. Pydi Bhimavaram, Atchutapuram, Nakkapalli, and Bhimili will be finished in the first phase, while Kakinada clusters will be in Kakinada node. Kalahasti–Yerpedu will be developed as part of the first phase of Srikalahasti–Yerpedu Node.

Gannavaram–Kanikpadu clusters (Amaravati) will be in Gannavaram–Kankipadu node. Among these four nodes establishment of Visakhapatnam, Srikalahasti - Yerpedu node is given priority in the first phase. It is proposed to undertake 13 infrastructure projects in VCIC, of which APHC will undertake four projects worth Rs 9,780 crore, APRDC four projects worth Rs 13,089 crore, GVMC one project worth Rs 2,921 crore and GVC one project worth Rs 3,795 crore.

Department of Industrial Policy and Promotion, and Japan International Corporation Agency(JICA) will jointly prepare plans for Chennai-Bangalore industrial Corridor. Under this corridor, three powerful nodes will be arranged in the State. They will be set up in Krishnapatnam in Nellore district.
With infrastructural facilities in place and with the setting up of industrial units, Visakha–Chennai industrial corridor will be all set for a rapid growth.

Especially, if Vijayawada–Kharagpur and Delhi–Chennai railway transport corridors come through as proposed in 2016-17 Railway Budget, they will prove to be effective transport liaison between the above two corridors. To strengthen the industrial progress, the state government proposes to set up two National Investment Manufacturing Zones (NIMZs) one in Pamooru in Prakasam district, and the other in Chittoor district with 14,237 acres and 5000 acres respectively.

AP is the first State in the country with such NIMZs. There are at present 80 companies in Sri City, an industrial city in Satyavedu constituency of Chittoor district, to connect Tirupati–Chennai–Nellore cities. The establishment of ISUZU vehicle unit worth Rs 1,500 crore investment which is providing jobs to 400 directly and 600 indirectly will ensure an enviable place of name and fame to Sri City in the world map.

Strengths of VCIC:

A transport corridor in the heart of VCIC that extends north to south over 800 in along the coast connecting a set of economic nodes justifies the potential of the region to develop as an industrial corridor. The corridor includes prominent networks like National Highway-5 which is a part of Golden Quadrilateral, the Kolkata–Chennai rail route and seven non-captive operational ports.

NH network of 2,268 km and railway network of 2,113 km together facilitate easy movement of goods in and outside the corridor. Food processing, pharmaceuticals, Auto and Auto components, Textiles, Metallurgy, Chemical and petrochemicals, and Electronics are the seven key sectors proposed for development in the coming years.

The industrial corridor approach involves creation of an efficient multimodal transport network supported by Quality Infrastructure and logistics with in a defined geography, and a policy framework that facilitates business operations for integration with global production network. Industrial Corridors are central to India’s “Make in India” initiative which encourages investments into the manufacturing sector to stimulate growth and create high quality jobs.

The VCIC Development Programme (VCICDP) will complement the ongoing efforts of the State Government to enhance industrial growth and create high quality jobs. The recent announcement of special package by the Centre will serve as a robust boost to the State for development of industries.

Of late, AP achieved first place among the states in the country with regard to the “Ease of doing business” which is a good sign for future. Lastly, a word of caution. In the wake of automation worldwide, which replaces labour with machines in some sectors, there is no job guarantee for those employees who are already working in various units.

If a machine does the work of 20 or 30 workers, and the price of labour is higher than that of capital (i.e. machines) what the law of ‘production economics’ suggests substitutes factors of production i.e., substitution of labour with capital. Similarly, the long run fate of these industrial units in the wake of globalization also deserves consideration.

It will be wise, before leaping into the dark, to consider whether the demand for their products is permanent or temporary or seasonal. Considering all these contingencies is vital for long-run survival of entrepreneurs. (Prof Krishna Rao is a Retd Professor of Andhra University, and Dr Gopal Rao a faculty of MR (A) College, Vizianagaram)

By Prof B Rama Krishna Rao & Dr B Venu Gopal Rao