Thursday, February 23, 2012


ANDHRA PRADESH-AN IDEAL  DESTINATION  FOR INVESTMENTS                


The Micro & small Enterprise Sector occupied a vital position in a developing economy in the world over. It played a prominent role as far as the contribution to the economic development of our country is considers. The Micro and Small enterprises sector is considered to be the most vibrant sector in the Indian economy and often the sector is termed as engine for growth. The micro and small enterprises played a dominant role in contributing to the GDP by way of its share in employment generation, exports and industrial output. The sector is wide spread across the country and producing a wide range of products and offering a variety of services. There are more than 8000 products manufactured in the Micro & small Scale Sector.
AP is the largest state in the southern peninsular region of India, with an area of 2,75,100 sq kms and a coast line of 974 kms. Based on the physical features, the state is divided into three regions - Eastern hills, the coastal plains and peninsular plateau. Vamsadhara, Nagavali, Godavari, Krishna and Pennar and  are the major rivers flowing through the state. The state has 23 districts, with 9 districts in the coastal area, 10 districts in the Telangana area, and 4 districts in the Rayalseema region. Hyderabad is the State capital. Total population of Andhra Pradesh as per 2011 census is 84,665,533 of which male and female are 42,509,881 and 42,155,652 respectively. In 2001, total population was 76,210,007 in which males were 38,527,413 while females were 37,682,594. The literacy rate is 67.66 compared to 60.47 of 2001 census.

RESOURCES

Andhra Pradesh is endowed with many natural resources, good human resources, and a climate congenial for agriculture and industrial production. The state is a leading producer of paddy and other crops like tobacco, cotton, sugarcane, pulses and horticulture produce. The state is the second largest producer of Horticulture products in the country. Major fruits produced in the state are Mangoes, grapes, pineapple, banana and guava. Coconut is another major capital crop in the state. Apart from these, the state is a major contributor in the production of spices like chilies, turmeric, ginger, coriander, etc.

The state shares about 14.5% in rice production of the country. AP is the largest maize producer, with 19.09% share of the country’s production as per the data of 2007-08. The state ranks 3rd in the country in pulses production with 11.52% share, 5th in total oilseeds production with11.39% share(second in sunflower seeds production) with 30.14 share and 3rdin cotton production after Gujarat and Maharashtra, with 13.49%share. AP ranks 1st in oil palm cultivation with 80.5% share. The state has a share of 36% in total tobacco production in the country, and ranks first. AP also enjoys a share of 60% in turmeric production. Andhra Pradesh is the leading producer of chilies. It also ranks amongst the top few states in production of fruits like mango, grapes, pineapple, cucumber etc. Floriculture is also an upcoming industry that offers immense scope, especially in the export market.

Andhra Pradesh is the leading producer of barites, mica, coal, bauxite, lime, granite etc. The state produces about 10 million tones of industrial minerals. Vast reserves of natural gas are found in the Krishna-Godavari basin with 62 million standard cubic meters per day being exploited already. This has opened up a plethora of industrial opportunities.

The state has a total forest cover of 23% of the geographical area. Around 45% of the cover falls in the Telangana region, while around 30% falls in the coastal region and 25% in Rayalaseema region. The major forest produces in the State are Timber, fire wood & charcoal and Minor forest produce include bamboo, Tendu/Beedi leaves, soap nuts, red sanders wood, seeds, medicinal plants etc. Plantation products like cashew, teak, coffee and pepper are also grown.

As far as live stock is concerned the state has 20.56% of the country’s poultry population. It is also the leading producer of poultry and eggs. It contributes to around 33% of eggs and 18 % of broiler meat to the country. AP has a rich livestock population, and is a major producer of hides and skins (10% of the country’s total production). Having a long coastline, AP is also a leading producer of marine food products.

Every year, the state produces more than 85,000 engineers, post graduates in computers and other fields, and management disciplines. These young professionals have made their good presence in the global IT industry. The state houses a number of Engineering colleges and B-schools. However these graduates need industry oriented trainings to make them suitable for the  local industrial sector.


INDUSTRIAL SENERIO

Micro, Small and Medium Enterprises have been recognized as one of the key sector for employment generation and overall economic development of our country. The Micro, Small and Medium Enterprises development Act, 2006, was enacted to expand focus to the entire gamut of micro, small and medium enterprises (MSMEs) both in manufacturing and service sectors. This sector now provides employment to nearly 60 million persons and accounts for nearly 45 % of India’s manufacturing output.

The micro and small scale sector in Andhra Pradesh has seen a phenomenal growth during the last four decades. The number of units in AP in this sector, during 1956 was just 6195, while the corresponding figures in 2009  the total number of MSEs in the State stands at 1, 58,173, according to Commissioner of Industries, GoAP data. The number of small scale industries has grown 20 fold during the 40 years from 1956. A corresponding increase in investment made and employment provided by the sector is also seen. However, an interesting trend in the investment and employment by the sector is that the average investment per unit in this sector has been rising, whereas, the average employment provided by the sector has been coming down. The major reason that can be attributed to this trend is the advent of new technologies and consequent increase in production.

Andhra Pradesh has a prominent role in the industrial sector. The major concentrations of industrial and business activities are Hyderabad, Medak, Ranga Raddy, Krishna, West Godavary and Visakhapatnem districts. There are 600 large scale industries in the state spread across the length and breadth. Major  public sector undertakings are however concentrated in and around Hyderabad and Visakhapatnam , thus making the major agglomeration of industries. The micro, small and medium enterprises are also more or less confined to these areas as ancillaries to the public sector enterprises. In addition resource based enterprises grown in clusters at various locations based on local raw materials and skills. The DC (MSME) did some interventions in 20 clusters in the state.
The Drugs & Pharmaceutical sector is another area which made this state as the Pharma Hub of the country. The sector has its concentration in Hyderabad, Madak, Ranga Reddy and srikakulam distts. The recent addition being an industrial park at Visakhapatnam

The gross State domestic product (GSDP) is Rs. 1, 17,434 crores with a contribution of Rs.16, 350 crores from manufacturing sector which comes to 13%. The per capita income is Rs.13, 135
Andhra Pradesh has the largest number (73) of Notified SEZs. These include IT & ES SEZs in and around Hyderabad.

FURTHER PROSPECTS
           
The state Govt. identified the following growth sectors for setting up of Manufacturing and service enterprises.
  • Automobiles and Auto Components
  • Biotechnology
  • Bulk Drugs and Pharmaceuticals
  • Food and Agro based
  • Information Technology
  • Mines and Minerals
  • Textiles and Leather
  • Tourism
Industrial growth in the state is not widespread compared to the states like Tamil Nadu, Gujarath and Maharashtra. It has confined to market oriented growth in the areas where PSU are established as there is market assurance. The others are like clusters based on the local raw materials and skills. This trend has to be changed by creating industrial corridors at various places within the state where agglomerations of Large, Medium, Small and Micro enterprises are promoted with their due representations.

It is a known fact that Andhra Pradesh is rich with natural resources and is not fully exploited, to add value by establishing enterprises. This may be due to some of the reasons like inadequate specialized training facilities, lack of skilled management, lack of market information including export markets, lack of awareness in IPRs and low exposure to ICT. The MSEs can not afford to have these facilities due to financial resource crunch. Hence there is need for awareness programs to attract entrepreneurs. Merely giving generalized Entrepreneurs Development Trainings organized by various Institutions will not meet this goal. The focus of all trainings should be towards nurturing the Entrepreneur in the specialized fields, based on the resources available in the identified regions. To achieve these goals there is need for establishing industry facilitation centers which can practically guide and assist the entrepreneurs in these areas.

In order to achieve these, following measures at all levels may have to be taken both by entrepreneurs and development agencies including financial institutions.


ENTREPRENUERS

  • Entrepreneurs should try to utilize full of resources and installed capacity by strategic planning and look for innovative processes.
  • Conduct market research in their related business for exact demand forecasting.
  • Understand export procedures for export of their products in international markets.
  • Get exposure to the applicability and use of ICT and equipment's for setting of identified industries based upon local and export markets.
  • Upgrade managerial skills and knowledge on prospective markets.
  • Get IPR awareness through WEB or through development institutions
  • Improve ICT skills and Quality management practices through such trainings

PROMOTION & DEVELOPENT AGENCIES:

The promotion and sustained growth of  MSME Sector is achieved well by coordinated efforts of the following agencies.

a)      Central Government
b)      State Government
c)      Technology Providing Agencies including IPRs
d)      Training & Consultancy Organizations
e)      Financial Institutions  
f)       Industry Associations        and
g)      Engineering & Management education Institutions/ Universities


The Tasks are to be taken by different organizations are broadly identified below

  • The Ministry of SMEs should provide more comprehensive marketing support for India's SMEs. The Govt. procurements should be made mandatory to the the prescribes limit as per the MSMED Act2006.

  • State Government should establish Industrial estates/parks specially for MSE Sector at a suitable location in each districts and provide adequate Infrastructure Facilities .

  • Organize vendor development programs at different locations in the state to establish linkages between micro, small, medium and large industry.

  • Encourage MSME  promotion through public-private partnerships in the areas of creation of training facilities, technology upgrading centers, research and testing labs, IPRs, etc.

  • Identify of new technologies suitable for MSEs and facilitate acquisition of such technologies.

  • Organize SME Product Exhibitions at different locations preferably on permanent display modes.

  • Facilitate flow of credit to MSE sector from institutional sources at par with agriculture loans.

  • The government should give all possible help to encourage SMEs to focus on innovation and technology development.

  • Level playing at par with the organized sector, in all aspects like preferential treatment for land, finance and other facilities.

  • Education institutions/ Universities should introduce specialized tailor made programs, both short and long duration to produce manpower according to the needs of the Industry.

 CONCLISION

Promotion and development of Enterprises need sincere efforts by all concerned. The Entrepreneur should develop close liaison with all development agencies and should possess good leadership qualities. It is the Entrepreneur and the team will have the ultimate responsibility as he/she only enjoys the fruits of the enterprise. As a leader he/she  has to lead the  team in a coordinated manner to achieve the desired goal.

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