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Andhra Pradesh has a diversified manufacturing base but has a long way to go, the Confederation of Indian Industry (CII) has said.
A major slice of investments made in the manufacturing sector in the last few years has gone into traditional basic metals, chemical products and non-metallic mineral sectors. The State emerged as India's fourth largest employer, employing over 10 lakh. “But it lags behind in all key metrics related to value added manufacturing, such as per-capita gross output and net value added,” a representative of the Andhra Pradesh Chapter of the CII said.
Recent studies have shown that the net value added per employee in the manufacturing sector in Andhra Pradesh is about Rs 3.35 lakh, trailing behind Karnataka (Rs 5.04 lakh), Maharashtra (Rs 7.78 lakh) and Uttarakhand (Rs 12.35 lakh).
Not only in value-addition, but the State has declined in the growth in manufacturing sector last decade, with the period not seeing any significant birth of large industries beyond pharmaceuticals and biotech. Experts attribute this trend to entrepreneurship in the State shifting to areas that gave quicker economic yields such as IT and ITES.
“One reason could be that AP has predominantly been an agri-State, but has been rapidly moving from this sector to manufacturing,” Mr T.S. Appa Rao, Andhra Pradesh Principal Secretary (Industries and Commerce), told a CII meet on the subject on Friday. “We do have the largest number of manufacturing SEZs in the country. There are challenges such as shortage of skilled labour, but there is significant potential (in manufacturing).”
Though Andhra Pradesh has over 96 SEZs, only about 28 are operations; and 18 of these are focussed on IT and ITES.
In terms of export, Andhra Pradesh's exports (goods only) were $8,558 million in 2009-10, behind Maharashtra ($43,351 m), Gujarat ($38,771 m), Tamil Nadu ($16,083 m) and Karnataka ($9,092 m). “The majority of AP's exports, estimated at Rs 73,143 crore, were in the IT and ITES sector, followed by drugs and pharmaceuticals,” a recent CII study has shown.
The CII has said that the State has the opportunity to emerge as a major manufacturing hub by attracting foreign direct investment, improving infrastructure and supply chain network and building a brand for the State.
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