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Industrial Development & Economic Growth in Andhra Pradesh

Last updated on Jun, 26 2020

Economic Snapshot: GSDP of Andhra Pradesh
Per capita Income of Andhra Pradesh

 

Factfile

  • Capital:Hyderabad (for 10 years)
  • Geographical Area (sq km):160,205
  • State Language:Telugu, Hindi, English and Tamil
  • Literacy Rate:67.4 per cent
  • Key Industries:Agro and food-based, biotechnology, bulk drugs and pharmaceuticals, IT and ITeS, textile and leather, tourism, automotive and auto components, gems and jewellery

ANDHRA PRADESH State Report | June, 2020

Andhra Pradesh (AP) is located in the Southern peninsula of India. The stateshares its boarders 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.

The state has a well-developed social, physical, and industrial infrastructure and virtual connectivity. It also has good power, airport, IT, and port infrastructure. At current prices, Andhra Pradesh's Gross State Domestic Product (GSDP) was Rs 10.08 trillion (US$ 154.62 billion) in 2019-20. The GSDP grew at a CAGR of 15.38 per cent from 2015-16 to 2019-20.

The state attracted Foreign Direct Investment (FDI) equity inflow worth US$ 19.19 billion between April 2000 and March 2020 according to the data released by Department for Promotion of Industry and Internal Trade (DPIIT).

As of February 2020, the state had 20 operational SEZs (Special Economic Zone), 32 SEZs with formal approvals, four SEZs with in-principle approval, and 27 notified SEZs. These SEZs were spread across diversified sectors which include textiles & apparel, food processing, footwear & leather products, multi-product, pharma, IT SEZs, etc.

Seemandhra, comprising Rayalaseema and coastal Andhra, 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 2020, Andhra Pradesh had a total installed power generation capacity of 24,854 MW.

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.

The state has a large coastline of nearly 974 kms, temple destinations, lush green forests, and spicy cuisine, which have led to an increase in domestic tourism in the last few years. Andhra Pradesh is one of the largest producers of brackish water shrimps and freshwater prawns. 

Recent Developments:

  • Government plans to set up AP Green Energy Corporation with a mandate to install 8,000 MW to 10,000 MW of dedicated solar power capacity.
  • The State 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 sea coast, protected by breakwaters. The estimated cost for phase I is Rs 3,736 crore (US$ 530 million).
  • On November 17, 2019, ports of Visakhapatnam and Ranong in Thailand entered a joint venture (JV) to explore business opportunities.
  • In November 2019, Visakha Container Terminal at Vizag port operated the first-ever direct service from Southeast India to North Europe (IEX), also connecting the Mediterranean region.
  • In January 2019, MoU (memorandum of understanding) was signed between JSW Group and Andhra Pradesh Economic Development Board. The company expected an investment of Rs 4,500 crore (US$ 623.70 million) to build a jetty at Ramayapatnam Port with plans to expand its logistic footprint.
  • In 2019, existing runways at Vijaywada airport was extended from 2,286 metres to 3,360 metres, whereas, for Rajahmundry airport, it was extended from 1,750 metres to 3,165 metres.

Key Sectors:

  • 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. Export of pharmaceuticals^ from the state stood at US$ 1.15 billion in FY19 and US$ 1.41 billion in FY20 (till February 2020).
  • 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 gram.
  • Andhra Pradesh ranked first in egg production, fourth in meat production and fourth in milk production in the country during 2018-19. It is also home to a thriving fisheries industry and employs about 1.45 million people and contributes 36 per cent of the total value of sea food export from the country. The state’s export of marine products increased to US$ 1,932.43 million in 2018-19 and reached US$ 2,193.25 million in 2019-20 (till February 2020).
  • As of April 2020, the state had 1,532 primary health centres, 7,459 sub-centres, 47 sub-district hospitals and 26 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, Andhra Pradesh Petroleum, Chemicals and Petrochemicals Investment Region (PCPIR) is being set up.
  • Andhra Pradesh is known for its pristine beaches, sacred places of worship, lush green forests, spicy cuisine, and hospitable people. In 2019, domestic tourist arrivals in the state stood at 195.8 million, while foreign tourist arrivals stood at 0.23 million.

 

Note: *CAGR in Rs terms, ^Includes drug formulations, biologicals, bulk drugs and drug intermediates

Factfile

  • Capital:Hyderabad (for 10 years)
  • Geographical Area (sq km):160,205
  • State Language:Telugu, Hindi, English and Tamil
  • Literacy Rate:67.4 per cent
  • Key Industries:Agro and food-based, biotechnology, bulk drugs and pharmaceuticals, IT and ITeS, textile and leather, tourism, automotive and auto components, gems and jewellery