Introduction
Andhra Pradesh (AP) is located in the southern peninsula of India. The state shares its borders with Chhattisgarh on the north, Odisha on the northeast, Telangana and Karnataka on the west, Tamil Nadu on the south, and Bay of Bengal on the east.
The erstwhile state of Andhra Pradesh has been bifurcated into two states, Telangana and residuary Andhra Pradesh (Seemandhra), by the Andhra Pradesh Reorganisation Act, 2014, or the Telangana Act. The Act consisted of the aspects of the division of assets and liabilities, the boundaries of the proposed new states, and the status of the capital city Hyderabad after the separation of the state.
It is the first state in the country to have enacted the Industrial Single Window Clearance. The Act made it compulsory for new industries to register with a single-window to obtain clearances quickly. It also simplified procedures for getting industrial clearances. The state also has separate acts for development in sectors such as solar power, electronic hardware, and food processing.
With 13 districts and a geographical area of 1,62,970 sq. km., Andhra Pradesh ranks as the 8th largest state in the country. The state has a well-developed social, physical, and industrial infrastructure, as well as virtual connectivity. It also has good power, airport, IT, and port infrastructure. At current prices, Andhra Pradesh's gross state domestic product (GSDP) stood at Rs. 1,201,736 crore (US$ 157.36 billion) for 2021-22. The GSDP increased at a CAGR of 12.14% from 2015-16 to 2021-22. The Gross Value Added (GVA) growth stood at 18.47% during 2021-22.
The government is striving towards creating quality infrastructure, coupled with a congenial industrial environment in the state, to make AP an attractive destination for both domestic and foreign investors.
- Between October 2019-December 2021, FDI inflows in Andhra Pradesh stood at US$ 450.86 million. The state ranked 14th in India in terms of FDI inflows.
- The state’s exports stood at US$ 22.18 billion in the first three quarters of FY22.
- A new industrial policy is under process and will be announced by the government soon. In 2019-20, 44 large and mega industrial projects were established with an investment of Rs. 22,282.16 crore (US$ 3.03 billion), providing employment to 18,385 people, and 10,019 micro, small and medium enterprises were established with an investment of Rs. 2,979.86 crore (US$ 404.8 million), providing employment to 76,716 people.
Andhra Pradesh has most of the power projects of undivided Andhra Pradesh. Coal-based power plants are mostly located in the state due to proximity to the ports. As of March 2022, Andhra Pradesh has a total installed power generation capacity of 25,726.89 MW. Of the total, private utilities contributed 16,647.39 MW, state utilities contributed 6975.18 MW and central utilities contributed 2,104.33 MW.
Key Sectors
- In July 2021, United Telelinks Neolyncs, the manufacturer of Karbon mobile phones and other electronic devices, announced an investment of Rs. 2,150 crore (US$ 290.82 million) in Andhra Pradesh. This investment will generate direct employment for 6,000 people and indirect employment for 15,000-20,000 people.
- Andhra Pradesh is home to many global and national pharma players, and various companies have set up their manufacturing hubs in different cities of the state. Pharmaceutical exports from the state stood at US$ 1.79 billion in FY21.
- Hyderabad has become one of the preferred destinations for global pharma biotech investments and has attracted around Rs. 7,500 crore (US$ 983.52 million) of investments in FY22, which is expected to result in employment for about 35,000 people.
- The presence of rich climatic and soil conditions makes Andhra Pradesh a major agricultural belt. Few of the leading crops produced in the state include rice, chilly, oilseeds, cotton, pulses, and grams.
- 77 agri testing labs will be operationalised from the Kharif 2022 season to address the problem of spurious seeds, fertilisers, and pesticides.
- The cost of installing electricity meters for agricultural pump sets will be borne by the state government.
- 52.38 lakh farmers received Rs. 7,016 crore (US$ 920 million) in financial assistance under the Rythu Bharosa scheme in 2021-22.
- Andhra Pradesh is home to a thriving fisheries industry and employs about 1.45 million people and contributes a major proportion to the total value of sea food export from the country.
- In FY22, marine products exports from the state stood at about US$ 3.09 billion.
- Andhra Pradesh is one of the largest producers of brackish water shrimps and freshwater prawns
- As of FY21, the state had 1,142 primary health centres, 7,458 sub centres, 28 area hospitals and 14 district hospitals.
- According to the Director General of Hydrocarbons (DGH), Andhra Pradesh has huge oil and natural gas reserves. Production of crude oil and natural gas in the state was recorded at 216.51 thousand metric tonnes and 847 million cubic metres (MCM) during 2019-20, respectively. The state’s Krishna-Godavari basin, spread over an area of nearly 52,000 sq. kms, has a total hydrocarbon resource base of 1,130 million metric tonnes. To promote investment in the industry, the Andhra Pradesh Petroleum, Chemicals and Petrochemicals Investment Region (PCPIR) is being set up.
- In July 2021, the Central Government agreed to establish a petrochemical corridor with an outlay of Rs. 25,000 crore (US$ 3.27 billion) in Andhra Pradesh.
- In August 2021, Reliance Industries Limited (RIL) announced an increase in its PET recycling capacity by establishing a recycled polyester staple fibre (PSF) manufacturing facility near the Krishnapatnam Port in Andhra Pradesh's Nellore district.
- Andhra Pradesh is known for its pristine beaches, sacred places of worship, lush green forests, spicy cuisine, and hospitable people. In 2020, domestic tourist arrivals in the state stood at 70.83 million, while foreign tourist arrivals stood at 67,591.
Recent Developments
- As per the Budget 2022-23:
- In phase III of the Nadu-Nedu program, the infrastructure in 24,620 schools (such as furniture, fans, lights, and drinking water) will be upgraded.
- Rs. 13,640 crore (US$ 1.78 billion) was allocated for agriculture and allied activities.
- Allocation of Rs. 8,597 crore (US$ 1.12 billion) as capital expenditure on transport. Out of this, Rs. 2,173 crore (US$ 284.54 million) has been allocated for roads and bridges.
- The State Government has set aside Rs. 8,495 crore (US$ 1.11 billion) for urban development in 2022-23. Out of this, Rs. 1,000 crore (US$ 131.13 million) has been allocated towards the Smart Cities Mission, while Rs. 800 crore (US$ 104.9 million) has been allocated for the creation of essential infrastructure for the new capital city.
- The State Government announced plans to invest Rs. 9,451 crore (US$ 1.24 billion) to develop the state’s energy sector.
- Allocation of Rs. 15,708 crore (US$ 2.06 billion) for health and family welfare. Out of this, Rs. 2,462 crore (US$ 322.85 million) has been allocated towards the National Health Mission, and Rs. 1,009 crore (US$ 132.31 million) has been allocated for Primary Health Centres (PHCs).
- Rs. 30,385 crore (US$ 3.97 billion) has been allocated for education, sports, arts and culture. Out of this, Rs. 8,015 crore (US$ 1.05 billion) has been allocated towards teaching grants to Mandal Praja Parishads, and Rs. 2,136 crore (US$ 280.1 million) has been allocated towards the Samagra Shiksha Abhiyan.
- The Andhra Pradesh government set aside Rs. 2,755.17 crore (US$ 361.1 million) for industrial and infrastructure development.
- Traffic handled by the Visakhapatnam port reached 69.03 million tonnes in FY22.
- In March 2022, Arcelor Mittal announced a renewable energy partnership with Greenko Group under which it will invest US$ 600 million to own and fund a 975 MW renewable energy project in Andhra Pradesh.
- In 2021, 7,107 Micro, Small and Medium enterprises (MSMEs) were established in Andhra Pradesh, with an investment of Rs. 2,099 crore (US$ 275.25 million), providing employment to 46,811 people.
- In December 2021, Minister for Road Transport and Highways Mr. Nitin Gadkari inaugurated and laid the foundation stone for 41 road projects in Andhra Pradesh for a length of 1,048 km, to be completed at an estimated cost of Rs. 16,826 crore (US$ 2.2 billion).
- In August 2021, a new N5 taxiway and six parking bays were made operational at the Visakhapatnam Airport. The taxiway will increase operational capacity by allowing 12 aircraft movements per hour instead of the current nine and the parking bays will allow aircraft to be parked overnight.
- In August 2021, Adani Ports announced that the proposal to acquire a 10.4% share in the Gangavaram Port (GPL) has been approved by the Andhra Pradesh government. The proposed acquisition will cost Rs. 644.78 crore (US$ 86.98 million).
- In July 2021, Indian Railways announced 33 projects in Andhra Pradesh that consist of 16 projects of new railway lines, while the remaining 17 projects were for doubling of the existing lines. These projects would cost Rs. 62,801 crore (US$ 8.45 billion) and cover 5,706 kms in the state.
- In April 2021, the government announced that it would covert 10 major state highways in Andhra Pradesh into national highways at a cost of Rs. 8,000 crore (US$ 1.09 billion).
- In February 2021, Finance Minister Ms. Nirmala Sitharaman announced commencement of the Nadikudi-Srikalahasti railway project. The Central government spared Rs. 1,144 crore (US$ 154.2 million) to fast-track the project.
- In February 2021, Union Minister for Road Transport and Highways, Mr. Nitin Gadkari, approved a proposal to construct a six-lane Kantakapalle-Sabbavaram section of NH 130CD worth Rs. 824.29 crore (US$ 111.1 million) and the development of a six-lane Korlam-Kantakapalle section of NH 130CD worth Rs. 772.70 crore (US$ 104.2 million). In addition, approval was also provided for widening and strengthening the four-lanes of urban link of NH-42 in Ananthapur town worth Rs. 311.93 Crore (US$ 42.1 million).
- The government plans to set up a AP Green Energy Corporation with a mandate to install 8,000 MW to 10,000 MW of dedicated solar power capacity.
- The government plans to develop a greenfield port at Ramayapatnam in the state to meet the ever-increasing cargo demand under the landlord model with artificial deep harbour along an open straight seacoast, protected by breakwaters. The estimated cost for phase I is Rs. 3,736 crore (US$ 530 million).
FACTFILE
Capital
Hyderabad (for 10 years)Geographical Area (sq km)
160,205State Language
Telugu, Hindi, English and TamilLiteracy Rate
67.4 per centKey Industries:
Agro and food-based
Biotechnology
Bulk drugs and pharmaceuticals
IT and ITeS
Textile and leather
Tourism
Automotive and auto components
Gems and jewellery
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