Big Industry Bias? Andhra Pradesh MSMEs Left Behind
No one would say that big industries should not be brought to a state. In any state, if small and medium industries are promoted on a large scale, it not only creates employment opportunities for many people but also paves the way for many to grow as entrepreneurs. However, there is a growing discussion that the model being followed by Chief Minister Chandrababu Naidu in Andhra Pradesh is completely the reverse. It is clearly visible that he constantly focuses on big industries and big industrialists, but does not put any real focus on small and medium industries. Not only that, he provides hundreds and thousands of crores worth of land along with incentives to big industrialists, but hardly pays attention to small and medium industries. Even the benefits that are to be given to them as per the existing policy are made very difficult to obtain. For big industrialists, not only are huge lands and incentives given, but it was also recently announced that escrow accounts would be opened to provide these benefits and even sovereign guarantees would be extended to them.
On the other hand, small and medium entrepreneurs are forced to run around government offices to get the incentives and benefits meant for small and medium industries. Supporting the MSME sector and small industries does not bring much image or national-level mileage to Chandrababu or to Nara Lokesh. That is why, even if they have to give thousands of crores in incentives, even if it means draining the state exchequer, they show interest in benefiting big industrialists, but do not focus much on the MSME sector. Publicly, Chandrababu has been repeating attractive slogans such as “an entrepreneur in every home” and “creating Tatas and Birlas” for more than two decades. But in reality, he tilts more towards corporate companies and big industrialists than towards small players. An industrialist opined that if even a part of the incentives and benefits given by Chief Minister Chandrababu Naidu to billionaire companies like ArcelorMittal, and the value of land given to real estate companies in the name of IT firms in Visakhapatnam, were extended to small and MSME units, the industrial landscape of the state would look entirely different.
However, there is a discussion that whether it is Chandrababu or Nara Lokesh, they conduct events worth hundreds of crores in collaboration with bodies like the CII in ways that benefit big players, but do not focus on the MSME sector. Industrial circles are of the view that there are many vested interests of those in power behind this entire affair. Many also express the opinion that, compared to neighbouring states, the industries department in Andhra Pradesh is weak. In neighbouring states, there are Additional Chief Secretary– or Principal Secretary–level officers for micro, small and medium industries. That means such senior officers are mandatorily there even for large industries. But in Andhra Pradesh, only one Secretary has been assigned to the industries department, with several other subjects also tagged to them. Similarly, instead of an Industries Commissioner, a Joint Collector–level officer has been appointed as Industries Director. Even important initiatives related to industries, such as the Visakhapatnam–Chennai Industrial Corridor, have only been given additional charge.
To guide the 26 district collectors on industrial development, it would be better if officers senior to them were appointed. Or can officers of the same level or lower level really provide such guidance? That is the question here. Although there are many Additional Directors in the industries department, only one Additional Director is assigned to industries, while the rest are posted in different wings. Even though the Andhra Pradesh Micro, Small and Medium Enterprises Development Corporation has been set up, its growth over the past ten years has been zero. Moreover, the corporation is still in a position where it has not been able to properly utilise even the central funds it received. Although APIIC exists for industrial land allocation, the number of employees, which was more than 300 in 2014, has now come down to below 100. Industrialists do not have a proper connection with APIIC. Most of these institutions are largely being run at the behest of consultants. Although the Andhra Pradesh State Finance Corporation was established through a legislative act to financially support industries, it has no allocations and is surviving by channeling loans borrowed from banks to industries. It is being said that if the state government takes responsibility and allocates funds to it either from Reserve Bank resources or from state government funds, the institution can support industrial development.
The industries department itself has very few employees. Especially in newly formed districts, appointing a Deputy Director–level officer as the District Industries Officer instead of a General Manager–level officer can also be said to be an obstacle to industrialisation. Due to the lack of the required number of Industrial Promotion Officers, aspiring entrepreneurs are left without proper guidance. There are many such obstacles if one goes on listing them. When it is a fact that industries bring revenue to the state and generate employment, it is important to focus on the various departments related to industries, appoint the required number of staff, and also make the necessary arrangements to support micro, small and medium industries. Only then will a path be created for an entrepreneur in every household. When the Budameru floods last year submerged micro, small and medium industries in Vijayawada, it was announced that all kinds of assistance would be provided to them. So far, they have not received any assistance. Another key point is that there is also a discussion even within official circles that consultants, along with the Economic Development Board (EDB), have now emerged as a major power centre in the Andhra Pradesh government.
