Assocham advises AP to focus on delayed projects

Says nearly 49% of projects worth Rs 8.2 lakh crore have remained non-starters in the residual State till date

Hyderabad: Associated Chambers of Commerce and Industry of India (Assocham) on Tuesday suggested to the Andhra Pradesh government to focus on delayed projects, besides setting up ‘AP Entrepreneurship Mission’ for faster industrial development and employment generation in the residual state.

The premier industry body, which released a report titled 'Strategy for Developing the New Andhra Pradesh State', pointed out that the AP had total outstanding investments of about Rs 8.2 lakh crore as on March 31,2014, with power accounting for 28 per cent followed by manufacturing sector (18 per cent) and infrastructure (17 per cent).

"However, most of the investment projects attracted by AP are facing significant delays in implementation owing to a plethora of reasons like land acquisition delays, fund constraints, delay in environmental and other clearances along with law and order problems,” the report said.

It further stated that AP painted a grim picture vis-à-vis implementation of investment projects as over 49 per cent projects had remained non-starter. “Of these about 28.5 per cent projects are in announcement stage while implementation of about seven per cent projects has been stalled,” it added. The report further said that the new government must focus more on implementing the delayed projects on priority basis. “Though projects with just 0.5 per cent share have been completed in the state, projects under different stages of implementation hold majority share of about 51 per cent in the investments attracted by residual AP,” it explained.

On the AP Entrepreneurship Mission, the report maintained that the initiative should be taken up in the public private partnership (PPP) mode. “With the ultimate objective of employment generation through acceleration of entrepreneurship and business creation to tap rural markets of AP, the Mission must aim at facilitating 200 business and convenience hubs to provide services and facilities to both rural industries and households,” it explained.

As each rural entrepreneurial hub would require funds in the range of Rs 30-50 crore, the initiative would require financial support worth Rs 6,000-10,000 crore to create requisite ecosystem for 200 hubs over next 10 years, it added. “As in the case of special category state, 90 per cent cost of creating this ecosystem will be though grants from the Government of India and the remaining will be treated as a loan to the AP,” the industry body explained.

On the ways and means to transform AP’s economy, the industry body underlined the need for the State to adopt sector-wise focus in the areas of IT and ITeS, health tourism, horticulture, floriculture, dairy, setting up of solar parks and revival of inland waterways. It called for long-term finance to micro, small and medium enterprises (MSMEs).

Furthermore, Assocham also asked AP to develop a world-class airport hub at Vijayawada with required convenience, connectivity and network. Other suggestions include faster modernization of Machilipatnam port, a ten-lane road between the port and Hyderabad, and setting up of an Andhra Pradesh Maritime Board. “To fulfill various electoral promises, AP govt should promote value addition in agriculture sector and create opportunities to double farmers’ income,” it added.