DIMENSIONS OF GROWTH

4The economic development and socio-demographic strategy for a specifi c region would involve integra ng the current strengths of the region viz. exis ng economic ac vity levels, socio-demographic indicators, connec vity and linkages, natural resources, etc. with the overall vision of developing the region into a sustainable urban/ economic center.

In view of this, a detailed review of the infl uence region (viz. state) and the Capital Region has been undertaken to understand the current economic and demographic scenario, economic posi oning, key natural resources and raw materials present, industrial ac vity, infrastructure and key ini a ves proposed under the AP Reorganiza on Act, etc. This chapter is divided into the following sub sec ons:

1. Review of Exis ng Socio-Economic Informa on; 2. Regional Economic Analysis; 3. Benchmarking of Capital Ci es; 4. Economic Development Strategy for Capital Region; 5. Broad Demographic Projec ons.

School Kids near 4.1REVIEW OF EXISTING SOCIOECONOMIC INFORMATION 48 4.1.1REGIONAL CONTEXT

Andhra Pradesh Overview The state is very well connected to Located in the south-eastern part of the regional and na onal economic the country, Andhra Pradesh state is hubs such as , Chennai, bordered by & Chha sgarh , Bengaluru, , on the North, Telangana & etc. via these transit nodes on the west, towards the south and Bay of Bengal on the east. Fig.4.1 highlights the strategic loca onal The new state of Andhra Pradesh is advantages of the state in context of spread across an area of approximately the region. 160,200 square kilometers and divided into 13 districts with a total popula on The loca on of the state along the base of approximately 49 million eastern coast and its proximity to (2011). various economic hubs in the region have the poten al to be the eastern Andhra Pradesh is endowed with a gateway of (like Mumbai which is variety of geographic features such as the western gateway of India) with the Eastern Ghats, Nallamala Forest and Capital Region being located centrally the state is fed by Krishna and Godavari to all the regional economic hubs. rivers. The state boasts of vast arable fer le land and rich endowments of Economic Scenario natural resources such as asbestos, As discussed in the preceding sec on, coal, limestone, granite, bauxite, the state has vast arable land and gypsum, manganese, etc. Some of the it accounts for a large agricultural major urban centers in the Andhra produc on in the country. It has Pradesh state include Visakhapatnam, abundant availability of mineral Vijayawada, Tirupa , and resources geographically spread over Nellore. all the 13 districts of the state.

Regional ConnecƟ vity Fig.4.2 highlights the geographical Andhra Pradesh state is characterized spread of the state, the key natural by excellent intra and inter-state resources, exis ng industrial ac vity connec vity through road viz. NH-5 and a few notable industrial clusters. (part of Golden Quadrilateral) & NH- 9, domes c & interna onal airports, extensive railway network and 5 opera onal sea ports.

Fig.4.1 Strategic loca on of the State

As highlighted before, the abundant NaƟ onal Investment and availability of various raw materials Zone (NIMZ) ~ as part (agricultural produce, minerals, etc.), of the Act, two NIMZs have also been 49 biggest natural gas reserves (viz. KG proposed at Prakasam and Chi or basin near Kakinada) and exis ng districts which are to be developed industrial eco-system, etc. provides on a land area of approximately 5,000 signifi cant opportuni es for the Ha and 6,000 Ha respec vely. The two state to evolve as one of the most proposed manufacturing zones are prominent industrial hubs in the expected to witness an investment country by aggressively expanding into of INR 300,000 million and will be the downstream ac vi es of already able to generate an employment of established industrial ac vi es such approximately 0.3 million. Food processing, Tex le, Automo ve, non-metallic mineral products, etc. Establishment of a new port at Durgarajapatnam ~ A new sea port at Key iniƟ aƟ ves proposed under AP Durgarajapatnam in is ReorganizaƟ on Act 2014 proposed to be developed by central The future economic development of Government on a land area of approx. the region is infl uenced by the inherent 2,035 ha. Land acquisi on for the new strengths of the region as well as port is currently under progress. the key economic ini a ves already proposed in the infl uence region. In Expansion of exisƟ ng Airports ~ Current this context, we have undertaken an domes c airports of Visakhapatnam, assessment of the key economic/ Vijayawada and Tirupa are expected infrastructure ini a ves proposed to upgraded to interna onal airports. in the AP Reorganiza on Act, which could be leveraged while developing Integrated Steel Plant at Cuddapah an economic strategy framework for ~ The government has envisaged the state. Some of the key ini a ves development of an integrated steel proposed include: plant in Cuddapah with the produc on InformaƟ on Technology Investment capacity of 5 million tons. Total Regions (ITIR) ~ the government has investment outlay for the project will proposed investments worth INR be INR 200,000 million. It is expected 450,000 million to develop 9,000 acres to generate an employment of as ITIR region. The regions are expected approximately 10,000 people. Land to employ 0.4 million people once it’s acquisi on for the en re project is fully opera onal by 2038. currently in progress.

Fig.4.2Regional Context showing key natural resources, exis ng industrial ac vi es & industrial clusters EducaƟ on infrastructure ~ The State 4.1.2CAPITAL REGION was also promised se ng up of several OVERVIEW 50 renowned ins tu ons such as IIT, IIM, NIIT, AIIMS, Petroleum university, The Capital region (Capital Region) Agricultural university, etc. ~ expected is spread over parts of Krishna and to aid the economic growth of the Guntur districts and covers a total area region, by providing required skill set to of approx.7,420 sq. km. The capital employable popula on. region comprises of 291 small villages, 9 medium towns, 1 large city & 1 Visakhapatnam – Chennai Industrial metropolitan city. It has a total current Corridor ~ Asian Development Bank is popula on of approx. 5.8 million. expected to provide a fi nancial assistance of approximately INR 150,000 million The economy of the region is primarily to develop the Visakhapatnam-Chennai driven by agricultural and services industrial corridor proposed by the sectors (viz. trading, construc on, Central government. Visakhapatnam, hospitality). Some of the major crops Kakinada, Machilipatnam and Tirupa grown in the region include paddy, have been iden fi ed as the key nodes jowar, co on, chili, sugarcane, etc. on the aforesaid industrial corridor. Apart from the ci es men oned The capital region is strategically above, the industrial corridor will pass located centrally to the 2 major urban through ci es such as Rajahmundry, agglomera ons viz. Vijayawada and Vijayawada, Guntur, Nellore, Gudur, Guntur. Further, the region has a strong etc. The industrial corridor is expected network of transport infrastructure to generate a manufacturing output via rail (Vijayawada and Guntur ci es of approximately INR 3,000 billion by have major railway sta ons), roads (the 2025. NH-5 and the NH- 9 passes through the region), and a domes c airport near Development of Metro Rail Facility Vijayawada city (proposed interna onal ~ The Andhra Pradesh government airport). Further, the capital region has announced development of 2 is located at a distance of approx. 27 metro rail networks in Vijayawada and km from the proposed sea port in Visakhapatnam. Vijayawada-Guntur- Machilipatnam, which is expected to Tenali- metro rail (VGTM) is handle a cargo capacity of 17 million expected to have 4 corridors covering tonnes. approximately 50 kilometers in phase 1.

Fig.4.3Airport, Port & Railway Infrastructure

4.2REVIEW OF EXISTING In the secondary sector, construc on SOCIOECONOMIC IN and manufacturing have been the FORMATION major contributors with a contribu on 51 of approximately 83%. However, 4.2.1ECONOMIC AND SOCIO even distribu on has been witnessed DEMOGRAPHIC PROFILE amongst the sub-segments of the ter ary sector. GçÄãçÙ D®ÝãÙ®‘ã E‘ÊÄÊî‘ PÙÊ- ¥®½› D›Ãʦك֫®‘ Oò›Ùò®›ó ~ GçÄ- is one of the largest ãçÙ D®ÝãÙ®‘ã districts in the state. 84% of the district Guntur is regarded as the second domes c product (DDP) of Guntur largest district in the state of Andhra district is cons tuted by the services Pradesh in terms of popula on fi gures and agriculture segments. (4.88 million as of 2011). Agriculture based industries such as The district is home to various Food & Beverages, Tobacco and Tex les agricultural commodi es viz. Chili are providing extensive employment Fig.4.4Guntur District Economy Fig.4.6Guntur District Economic Composi on (Guntur houses the largest chili market opportuni es to the worker popula on Source: Directorate of Economics & Sta s cs Source: Directorate of Economics & Sta s cs in the country), paddy, tobacco, co on, in the district. and minerals such as limestone, In terms of educa onal scenario of quartz, copper, lead, etc. Guntur the district, signifi cant improvement district is regarded as one of the major has been witnessed in the overall agricultural and tex le hub of India. number of students appearing for the senior secondary examina on from E‘ÊÄÊî‘ CÊÃÖÊÝ®ã®ÊÄ – GçÄ- approximately 37,000 students in the ãçÙ D®ÝãÙ®‘ã year 2007 to about 46,000 in 2012. As men oned above, primary and Addi onally, the pass percentage has ter ary sectors have been the dominant witnessed a tremendous increase from sectors contribu ng to the DDP of 73% in 2007 to approximately 91% in Guntur district. The ter ary sector 2012. contributed approximately 55% to the The pie-chart on the le highlights the total DDP in 2012-13. Addi onally, age-group classifi ca on, wherein the the primary sector (primarily led by majority of the popula on is observed produc on of chilies, co on, tobacco, to be concentrated in the age group etc.) has contributed 29% to the overall of 15-59 (cons tu ng approximately DDP in 2012-13. 65% of the total popula on of Guntur Further, in terms of contribu on by district in 2011). Further, 17% of the the sub-segments, agriculture segment total popula on falls under the age- has been the largest contributor to the group of 5-14. These trends highlight overall primary sector. the signifi cant employable popula on that the region will be able to supply Fig.4.5Guntur District Demographic Overview Fig.4.7Guntur District Employee Distribu on going forward. Source: Directorate of Economics & Sta s cs Source: Directorate of Economics & Sta s cs In terms of educa onal scenario of E‘ÊÄÊî‘ CÊÃÖÊÝ®ã®ÊÄ Senior Secondary Results ~ Total number of Contribution to GDDP (2012-13) – INR 267,480 Mn the district, signifi cant improvement As men oned above, primary and Students 52 has been witnessed in the overall ter ary sectors have been the dominant number of students appearing for the sectors contribu ng to the GDP growth 50,000 46,351 44,625 42,253 42,273 senior secondary examina on from of . The ter ary sector 40,949 28% 38,904 40,750 40,000 37,770 approximately 37,000 students in the contributed approximately 58% to the 35,342 36,893 58% year 2007 to about 46,000 in 2012. total DDP in 2012-13. Addi onally, 31,455 14% 27,908 Addi onally, the pass percentage has primary sector (primarily led by 30,000 witnessed a tremendous increase from produc on of paddy) has contributed 73% in 2007 to approximately 91% in 28% to the overall DDP in 2012-13. 20,000 2012. 10,000 Further, in terms of contribu on by Kٮݫă D®ÝãÙ®‘ã E‘ÊÄÊî‘ PÙÊ- the sub-segments, agriculture segment 0 Primary Sector Secondary Sector Tertiary Sector ¥®½› has been the largest contributor to the 2007 2008 2009 2010 2011 2012 Krishna district, which is located overall primary sector. In the secondary Students Appeared Students Passed towards the north of Guntur district, sector, construc on and manufacturing is one of the highly developed districts have been the major contributors with Fig.4.8Guntur Senior Secondary Results Fig.4.10Krishna District Economy in the state. Services and Agriculture a contribu on of approximately 80%. Source: Directorate of Economics & Sta s cs Source: Directorate of Economics & Sta s cs are regarded as the most important However, even distribu on has been ac vi es of the district. Approximately witnessed amongst the sub-segments 86% of the district domes c product is of the ter ary sector. cons tuted by the above men oned segments. D›Ãʦك֫®‘ Oò›Ùò®›ó Fig.4.11 highlights the age-group Further, the district is characterized classifi ca on, wherein the majority Composition of GDDP – 2012-13 Population by Age- Group (2011) – 4.5 Million by presence of rich variety of soils due of the popula on is observed to be to which agriculture has emerged as concentrated in the age group of 15- 74,210 Mn 38,730 Mn 154,540 Mn

an important occupa on. The district 59 (cons tu ng approximately 66% of 10% 7% 100% also has rich mineral base including the total popula on of Guntur district 20% 17% limestone, chromite, iron ore, mica, in 2011). Further, 17% of the total 80% 42% 38% 22% etc. popula on falls under the age-group 60% 2% 66% of 5-14. These trends highlight the 23% 24% 40% 41% signifi cant employable popula on that 14% 20% the region will be able to supply going 33% 18% 20% 3% forward. 0% Primary Sector Secondary Sector Tertiary Sector Agriculture based industries such as Agriculture Livestock 0-4 5-14 15-59 60+ Forestry Fishery Food & Beverages and Tex les are Mining Utilities Construction Manufacturing providing extensive employment Trade Services Transport Banking & Communication Real Estate opportuni es to the worker popula on Public Administration & Other Services in the district as depicted in Fig.4.12 Fig.4.9Krishna District Economic Composi on Fig.4.11Krishna District Demographic Overview Source: Directorate of Economics & Sta s cs Source: Directorate of Economics & Sta s cs

No. of Workers % Name of Industry Senior Secondary Results ~ Total number of Students Further, considerable employment has 4.2.2SPATIAL ECONOM- (2011) Value been witnessed in the Non-Metallic IC POSITIONING Food & Beverages 16,219 51% 60000 Minerals industry (7%) and Metals 53 Tobacco Products 41 0% 50,944 49,069 (11%) primarily due to the presence Based on the detailed mapping of the 50000 46,820 Textiles 2,891 9% 45,151 43,649 of limestone, chromite and iron ore region, it was understood that the Leather Products 944 3% 40,124 41,295 40000 37,093 deposits. Capital Region is located on either sides Wood Products 1,122 4% of river Krishna with various urban Paper Products & Printing 2,139 7% 30000 Refined Petroleum In terms of educa onal scenario nodes forming part of the region. Products 474 1% 20000 of the Krishna district, signifi cant Further, a detailed assessment of Chemical Products 1,743 5% 10000 improvement has been witnessed in the these urban nodes and the corridors Rubber & Plastic Products 919 3% overall number of students appearing leading to these nodes reveals a Non-metallic Minerals 2,101 7% 0 for the senior secondary examina on certain character a ached to them in Basic & Fabricated Metals 3,371 11% 2008 2009 2010 2011 from approximately 45,000 students in terms of raw material present, type Total 31,964 100% Students Appeared Students Passed Fig.4.12Krishna District Employee Distribu on Fig.4.16Krishna District Senior Secondary School Results the year 2008 to about 51,000 in 2011. of industrial ac vity in the region and Source: Directorate of Economics & Sta s cs Source: Directorate of Economics & Sta s cs Addi onally, the pass percentage has other geographical features, etc. witnessed a marginal increase from The exhibit (Fig.4.15) highlights the Data Sources Publica ons Descrip on 82% in 2008 to approximately 86% in spa al spread of the Capital Region and Directorate of Economics and Sta s cs Handbook of Sta s cs 2011; Guntur Popula on by Age group, Industry wise number of 2011. the economic posi oning of various District & Krishna District workers, Number of students urban nodes in the region. Key data sources collated and analyzed District Domes c Product of Andhra District Domes c Product (DDP), Break up of District For the purpose of undertaking the In addi on, the study team undertook Pradesh (2004-05 – 2011) Domes c Product economic and socio-demographic a detailed mapping of each of the Fig.4.13Data Source analysis of the Capital Region, we have corridors connec ng the urban centers collated and analyzed various data within the Capital Region to iden fy and City Popula on Key Economic Ac vity sources. The key data collated and understand the economic drivers for analyzed has been presented in Fig.4.14 each of these nodes, which are cri cal Vijayawada 1.5 Regional Economic hub ~ to establish an appropriate posi oning Trading, hospitality, retail strategy for the region.

Mangalagiri 0.07 Handloom Industry (Sarees)

Guntur 0.65 Red Chilly Export, cot- ton spinning/ginning

Tenali 0.16 Trade & Agriculture Nandigama/

Kondapalli / 0.10 Industrial clusters (power, Cement, Jaggayyapet pharma, plas cs, chemical, etc.)

Nuzivid 0.06 Mango Exports

Gudivada 0.12 Aquaculture, Food processing Fig.4.14Spa al spread of Capital Region Fig.4.15Key economic ac vity Fig.4.17Happy school students at Cricket Academy in Amaravathi Township Vector 2: Nandigama– Nuzvid – Key Vectors – Capital Region Vector 1: has good intra city connec vity through The vector is primarily characterized Gudivada - Jaggayyapet (northern Vijayawada-Guntur-Tenali (southern road and rail connec vity. by agricultural and sporadic vector) 54 vector) industrial activity. The exisng acvity The vector is characterized by the The vector is primarily characterized Fig.4.18 highlights the economic is characterized by power,Cement, presence of prominent ac vity nodes by agricultural, sporadic industrial and character of vector 1. auto components, pharmaceu cal, including Vijayawada, Gudivada, ins tu onal ac vity. Guntur city is aquaculture and F&B industries. Further Nuzivid, Nandigama,Jaggayyapeta etc. the major urban agglomera on in the ,the vector comprises of established Vijayawada,the second largest city in vector, which is known for its large industrial clusters such as the state is located in the vector. The Chili yard and educa on infrastructure. Industrial cluster, Autonagar city is widely known for its trading ac The city is also the administra ve Industrial cluster, etc. vi es viz. agricultural trading, headquarters of the district. It is also transporta on, automo ve, retail, etc. the key transit point for various parts Fig.4.19 highlights the key economic of the district. The Mangalagiri-Tenali The vector has good inter-city character of the vector vector also has a creek passing along connec vity through road and rail. The the main arterial road rendering the domes c airport is also located in the scenic view of the vector. The vector vector.

VECTOR 1 - SNAPSHOT Vijayawada N Snapshot Nuzivid N Mulpuri Feeds Mangalgiri VNS RMC Key Agro Sugarcane, Fruits, Priya Foods Key Agro Mirchi, Cotton Ultra Tech RMC Produce Fish Produce NRI Hospital CPF Pvt. Ltd F&B, Aquaculture, Jersey Milk Key Key Power, Auto Sneha Foods F&B, Textile CRDA Agrigold Haailand CRDARD Industries Industries Components, Coca Cola Pharmaceutical N IJM Raintree Key Sand, Granite, Vijayanag Polymer Jn Minerals Gravel W E Acharya Nagarjuna Kondapalli industrial cluster University APHM Engineering Delta Sugar S Guntur Lanco power Cold Storage HIL Non Metallic NG Fertiliser Cluster CCI Products Amulya Enterprises Nifty Labs, ORC Pharmaceutica NTTP Ruchi Soya Godrej Agrovet Mirchi Yard labs, Kekule, Orch l Textile Cluster Kamakshi Cold storage NSL Garments L&T Infocity Hindustan Food APPM Ltd Krishna Prasad Cold F&B Products Model Dairy Cold Storages Storage Eastern Condiments Tenali Vijayawada Mulpuri Fisheries Best Price Gannaram Airport Spices Park VD Polymers, Rahamankhan Tobacco Plastic Textile Lorvens, Bhavana N

Industrial Pearl Beverages NKR Textiles W E Autonagar industrial cluster Kanakadurga Agro Oil NSL Textiles Jayalakshmi Spinning S Others mills Navata Transport Logistics Priya Foods Edlapadu VRL Transport Logistics Road Network Gudivada Auto KCP Sugar SR Auto Water Canal components Railway Line Aquaculture Production F&B Industrial Others Aquaculture Road Network Railway Line Ponnur Figure 19: Vector 1 Figure 20: Vector 2 Source ~ JURONG Research Source ~ JURONG Research Fig.4.18Vector 1 Source: Research Fig.4.19Vector 2 Source: Research

• Largest city in Andhra Pradesh Vizag 4.3REGIONAL ECONOMIC 4.3.2POSSIBLE FUTURE • Common capital for • Largest sea port on east coast ANALYSIS ECONOMIC DRIV Telangana & AP Hyderabad Significant manufacturing • 55 • IT/ITeS hub activity in petro chemical, ERS FOR AP CAP • Bulk Drug capital of India steel, pharma, etc. ITAL REGION • Established Bio- • Nascent IT/ITeS activity 4.3.1 REGIONAL ECONOM tech/Aerospace eco-system Kakinadanada Rajahmundry N IC POSITIONING OF The key fi ndings from the preceding Key advantages of CRDA vis-à-vis CAPITAL REGION modules have been analyzed to iden fy • Vijayawada & Guntur are the • PCPIR W E other regions of AP Vijayawada largest cities in CRDA • Fertilizer the poten al future economic drivers • Skilled manpower S • Hub for major food production Guntur manufacturing The Capital Region is located in proximity for the capital region. While doing • Adequate drinking water • Significant Textile to some of the major economic nodes in so, various factors such as hinterland • Significant food produce manufacturing CapitalAP CRDA Region • Central location to all parts of AP • Education hub the region such as Hyderabad, Chennai, synergies, domes c & export demand, PCPIR (Petroleum, Chemicals and • Excellent transportation network Bengaluru, Visakhapatnam, Tirupa , upcoming industry opportuni es and Petrochemicals Investment • Existing social infrastructure in etc. Further, these economic hubs are Govt. policy push, etc. have been urban centers • Temple town Region) • Existing Agriculture production • Significant floating characterized by unique economic analyzed in detail. • Existing Manufacturing strenghts pilgrim population Krishnapatnam posi oning that defi nes the key guiding • Established education principles of economic development in Based on preliminary assessment, the hub • Capital of Tamilnadu state • Capital of Karnataka state these regions. future economic drivers for the capital Tirupati • Manufacturing hub of India • IT/ITeS hub of India Chennai • Significant Auto and region could be broadly divided into 4 • Aerospace/defence hub Bengaluru electronics manufacturing Fig.4.20 highlights the economic categories: • Established electronics eco- • Considerable IT exports system posi oning of these hubs and the Hinterland Sectors – This category advantages of the Capital Region vis- comprises of sectors which have Fig.4.20Regional Economic Posi oning Source: Research à-vis the other urban centers in the high hinterland synergies in terms region that have the poten al to defi ne of raw material availability, basic the economic posi oning of the Capital infrastructure, upstream/downstream Administrative Demand Pull Hinterland Sectors Region going forward. network, etc. Sunrise Sectors sectors Sectors (AP State & Regional (Global & India Growth) Sunrise Sectors – This category Synergies) (Government (Synergies from other Bureaucracy) India growth regions) As highlighted in Fig.4.20, the key includes the industrial sectors exhibi ng advantages of the capital region include strong growth prospects at India as well ƒ Secretariat its adequate availability of skilled as global level. ƒ Assembly Agro & Food Non-Metallic ƒ Courts & Electronics/Hardware workforce (viz. Engineering, F&B, IT/ AdministraƟ ve Sectors – Development Processing ProductsProdducu ts tribunals ITeS, Tex le, etc.), rich agriculture of capital region necessitates the ƒ Head quarters of produc on (viz. paddy, chilies, jowar, development of administra ve facili es Textile & Garment Textile key Govt. Logistics sugarcane, co on, etc.), central for func oning of the Government Manufacturing departments loca on to major economic centers, thereby triggering the economic ƒ Housing for availability of drinking water to cater to development of the region Assembly Aquaculture Food & Beverages , Leisure & growing needs of urban agglomera on Demand pull sectors - This category members & Film City and excellent transporta on network. comprises of sectors witnessing higher bureaucrats growth in the other regions of India, Pharma/Bio-tech Rubber & Plastics ƒ Public facilities such as housing, thereby off ering opportuni es for the Aerospace/ hospitals, etc. Defense region IT/ITES Engineering

Fig.4.21Poten al Economic Drivers for Capital Region Source: Research 4.4REGIONAL ECONOMIC 4.4.2ANALYSIS OF INDUS- Reflective of core production competencies ANALYSIS TRIAL STATISTICAL 56 Representative of expansion opportunities 4.4.1CRITICAL PARAME- The economic data pertaining to the TERS FOR ECONOM- iden fi ed industrial/economic clusters GLOBAL, INDIA & AP MARKET IC PRIORITIZATION has been analyzed to iden fy the high Reflective of demand for growth poten al sectors for the capital specific sub-segments Reflective of high growth The preliminary category of economic region. This has been achieved through through exports / imports Production ac vi es iden fi ed as part of the above a weighted average ra ng of the industries module have been analyzed in detail sectors at a global, India and regional TRADE OPPORTUNITIES in terms of understanding the various level using a priori za on matrix for parameters such as industry output, key the parameters listed above. HISTORICAL & FUTURE INDUSTRY PERFORMANCE Identification of growth trends, employment genera on Exports / Growth poten al, FDI, export poten al, etc. to The key data sources that have been Imports Prominent Industry Sub- arrive at most promising industrial and u lized to undertake this module are Segments economic uses for the capital region. as highlighted in the Fig.4.23

Fig.4.22 highlights the cri cal 4.4.3PERCEPTION STUDY JOB CREATION INVESTMENT parameters analyzed to evaluate the high poten al sectors that could As part of this module, mee ngs Employment FDI / priori ze the economic development in with key stakeholders have been Investments the region. undertaken to gauge their inputs on industry growth drivers, raw material Further, to comprehend the industry availability, upstream/downstream dynamics and to evaluate the network in region, Govt. policy push Reflective of amount of Reflective of Investment trends Æ opportunity for the Capital Region, and the future outlook for the sector, employment Æ opportunities of Direct correlation with future various modules of studies have been etc., which are the cri cal parameters employment generation investment opportunities undertaken including: that drive the industrial development ac vity in a region. Fig.4.22Cri cal parameter analysed to evaluate the economic priori za on Analysis of economic data pertaining to various industrial segments Direct and telephonic survey conducted Data Sources Publisher Descrip on Stakeholder mee ngs (industrial across Govt. En es, manufacturing occupants, industrial associa ons, establishments, tourism operators, Global Industrial Database United Na onal Industrial Develop- Value of Output, Exports, Imports, etc. Govt. Authori es) to gauge inputs on entertainment & Film city operator, ment Organiza on (UNIDO) the outlook for the sectors Economic Service sector units, etc. to Opportunity assessment for industry obtain qualita ve feedback. Industrial Database (India) Annual Survey of Industries (ASI) Value of Output, Investments, Employ- at India, state and the region level ment, Number of Factories, etc. through primary and secondary Over 40 interac ons have already research been undertaken and more mee ngs Industrial Database (Andhra Pradesh) Annual Survey of Industries (ASI) Value of Output, Number of Factories, are currently being undertaken to Number of Employees, etc. obtain comprehensive feedback on the Fig.4.23Data Source poten al industrial and economic uses for the capital region.

Prominent companies The break-up of mee ngs undertaken range of raw materials such as rice, Industrial Interactions Break-up ~ Over across industrial clusters and some of sugarcane, jowar, mangoes, chilies, 35 Interactions Conducted* the prominent en es met thus far are etc. to name a few. India’s largest food 57 Aricent Ashok Leyland Delta Sugars F&B Technology presented in Fig.4.24 park (Srini Food Park), spread across 147 acres is located in Chi or district. Engineering 4.4.4OPPORTUNITY ASSESS- Over the years, the state is increasingly MENT FOR IDENTIFIED witnessing the interest from global Non Metallic Mineral Priya Foods Bharath Textiles Model Diary ECONOMIC USES conglomerates that are keen to invest Products and partner with the state to promote Governmental A detailed analysis of iden fi ed industrial an integrated food processing eco- Departments segments has been undertaken to system in the state. Some of such key Pharmaceuticals Alstom Sandvik Gati understand the opportunity for the ini a ves announced in the sector sector at a Capital Region level. The include: Walmart’s MOU with Govt. to Textiles following sec ons highlight the key buy & market 100 agricultural products Packaging dynamics and outlook of these sectors from Andhra Pradesh and PepsiCo’s Mulpuri Fishers KCP Cements Bayer for the region. recent approval for establishing Mango Chemicals Pulp extrac on plants in Krishna, Chi or, East & West Godavari districts.

Fig.4.24Industry interac ons break up Fig.4.25 Sample list of interacted industries 4.4.5FOOD AND BEV- ERAGE SECTOR

India is a richly endowed agricultural na on. It has nearly a tenth of world’s arable land and a fi h of word’s irrigated land. India is the world’s second largest producer of food next to China. The food processing industry is one of the largest industries in India and ranks fi h in terms of produc on, consump on and exports. As per the industry es mates, the sector has es mated market size of USD 40 billion in FY13 and is further expected to expand at a CAGR of 11 per cent by 2018. The industry contributed approximately 9.8 % to India’s manufacturing GDP in 2013.

The F&B industry is characterized as one of the largest industries in the AP state by value of output and growth. Andhra Pradesh is endowed with a wide Dynamics of Capital Region – F&B Andhra Pradesh is the 3rd largest GROWTH DRIVERS producer of co on in the country with 58 Guntur district is famous for Chilies over 5 Million bales and over 17 lakh Rich agricultural produc on and dis nct raw material base which witnesses a huge demand from acres of land being u lized for co o n Growing domes c & export demand all over the world. The capital region produc on. 60% of the co on Growth in organized retail is expected to boost the F&B sector is also well known for its rice, pulses produc on in the state is contributed AP Government has iden fi ed F&B as a thrust sector and & announced se ng up of food parks in all districts and sugarcane produc on. The region by Guntur (Capital Region) and KEY CHALLENGES is also famous for its mangoes exports Prakasam districts while the remaining grown in and Nuzivid town. However, is contributed by Vizianagaram and Highly unorganized and fragmented sector ~ dominated by small and micro enterprises the current F&B ac vity in the region is East Godavari. The state has over 150 Currently, the value addi on in the segment is limited ~ industry to acquire technology and train work force to primarily concentrated in the upstream spinning mills present in the region, be able to expand into the downstream ac vi es ac vi es (viz. cul va on, harves ng, albeit, primarily involved in the basic fermenta on, etc.) with the limited midstream ac vi es such as spinning O C R value add produc on. This presents and ginning. Some of the prominent signifi cant opportuni es for the Companies involved in the tex le sector to expand into the downstream manufacturing ac vi es in the state ac vi es such as processing, freezing, include NSL Tex le, Gokaldas Exports, packaging and marke ng the products Loyal Tex les, etc. directly to retailers or end users. Dùăî‘Ý Ê¥ CƒÖ®ãƒ½ R›¦®ÊÄ - 4.4.6TEXTILE INDUSTRY T›ø㮽› Fig.4.26 Opportunity Assessment for Capital Region – Food & Beverage India is the one of the world’s largest The region is characterized by producers of tex les and garments. signifi cant produc on of co on. GROWTH DRIVERS The key aspects that have transformed However, the exis ng manufacturing India into a key sourcing hub include ac vity is primarily engaged in basic Growing urbaniza on, expansion of retail market, changing consumer lifestyle along with favorable Government abundant availability of raw materials ac vi es such as spinning & weaving ini a ves are expected to have a posi ve impact on the growth of the industry such as co on, wool, silk and jute as well with negligible ac vity being witnessed Availability of signifi cant raw material and skilled workforce as skilled workforce. India is the world’s in the value added produc on. Govt. policy push ~ se ng up of Tex le Clusters, 100% FDI, IPDS scheme, welfare schemes for weavers, etc. second largest exporter of tex les KEY CHALLENGES and garments. As per the industry es mates, the sector contributes about Compe on from exis ng tex le hubs of India 14% to industrial produc on, 4% to Cheaper imported products will be a deterrent for domes c companies to be compe ve the gross domes c product (GDP), and 27% to the country’s foreign exchange O C R infl ows. The size of the Tex le industry was es mated to be USD 89 billion in 2011 and is expected to reach USD 223 billion by 2021.

Fig.4.27 Opportunity Assessment for Capital Region – Tex le

GROWTH DRIVERS 4.4.7NON METALLIC MIN- 4.4.8 AUTO AND AUTO ERAL PRODUCTS COMPONENTS SECTOR Signifi cant growth in construc on ac vity owing to development of infrastructure, smart ci es, etc. 59 Rich base of non-metallic minerals in the region The non-metallic mineral products The automobile industry is one of India’s Poten al to expand into the downstream manufacturing ac vi es industry bears a direct correla on with major sectors; accoun ng for 22% infrastructure development through of the country’s manufacturing GDP. KEY CHALLENGES the provision of primary materials The Indian auto industry, comprising required to undertake building and passenger cars, two-wheelers, three- Dearth of skilled workforce to enable the downstream expansion of the industry construc on ac vity. India is endowed wheelers and commercial vehicles, Compe on from neighboring states such as Telangana, Odisha which have a be er ecosystem for the industry with rich mineral deposits and produces is the seventh-largest in the world. 87 minerals including 4 fuel minerals, India has emerged as the economic 10 metallic minerals, 47 non-metallic powerhouse of growth over the last minerals, 3 atomic minerals and 23 decade in the automo ve sector. The O C R minor minerals. key hubs for automo ve manufacturing Andhra Pradesh state has rich mineral in India include Delhi-Gurgaon- base including manganese, limestone, Faridabad in the north, Mumbai- mica, stea te, copper, graphite etc. The Pune-Nashik- Aurangabad in the state stands 2nd in the mica deposits west, Chennai-Bengaluru-Hosur in the and produc on in the country and south and Jamshedpur-Kolkata in the contains 44% of the limestone reserves east. The automo ve manufacturing in the country. industry in Andhra Pradesh is currently Fig.4.28 Opportunity Assessment for Capital Region – Non Metallic Minerals at an emerging stage and is expected D C R to witness robust growth owing to GROWTH DRIVERS ùăî‘Ý Ê¥ ƒÖ®ãƒ½ ›¦®ÊÄ the increasing demand in the region Rising income levels together with increasing propensity to spend & easy availability of credit The region has abundant availability and due to its advantages such as The region has abundant number of engineering and ITI colleges to support the manpower requirements of the non-metallic mineral deposits such as availability of raw materials, good industry which is one of the key driving factors for the sector limestone, stowing sand, silica sand, port infrastructure for imports and its Proximity to major ports and established auto cluster in Chennai granite, etc. Further, the Capital Region is proximity to the exis ng automo ve AP Govt. policy push to a ract major auto companies to set up manufacturing units in the state currently characterized by the presence Hub in Chennai. KEY CHALLENGES of cement manufacturing units, stone crushing units, RMC plants, etc., Dùăî‘Ý Ê¥ CƒÖ®ãƒ½ R›¦®ÊÄ Signifi cant compe on from the established hubs such as Chennai, Manesar, Pune, etc. primarily suppor ng the construc on/ Lack of exis ng eco-system and skilled work force building ac vity in urban areas such The automo ve industrial ac vity in the as Vijayawada and Guntur. However, Capital Region is currently characterized O C R the growing urbaniza on coupled by an opera onal auto component with the thrust on the infrastructure cluster in Vijayawada. It was one of the development and construc on ac vity fi rst in the country to be developed in the Capital Region is expected to exclusively for the automobile servicing provide signifi cant opportuni es for the trade. In addi on to the majority of region to expand into the downstream the servicing units, the Vijayawada ac vi es of the sector. autonagar cluster also has few small- medium scale manufacturing units. Fig.4.29 Opportunity Assessment for Capital Region – Auto and Auto Components However the cluster has failed to The rubber and plas c industry in GROWTH DRIVERS develop into an integrated component Andhra Pradesh is characterized by a 60 manufacturing cluster owing to highly highly fragmented industry structure An cipated growth of manufacturing industry in the region heterogeneous nature of products and with a large number of small-medium Signifi cant growth of popula on in the region over the next 10-15 years ~ to trigger the consumer demand services, use of outdated technology, scale players opera ng in the segment PCPIR development in proximity to Capital Region ~ ensures availability of raw material inadequate tes ng facili es and small with wide range of products, primarily scale of opera ons etc. suppor ng the overall manufacturing sector. 4.4.9RUBBER AND PLAS- KEY CHALLENGES TIC INDUSTRY Dùăî‘Ý Ê¥ CƒÖ®ãƒ½ R›¦®ÊÄ High pollu ng nature of the industry ~ plas cs banned for consumer use The rubber and plas cs industry is the The region has limited manufacturing Highly unorganized and fragmented sector 12th largest industry in terms of value ac vity in the rubber and plas cs Fluctua ons in raw material cost would impact profi tability of output in the country. India is the industry and the exis ng ac vity in the world’s largest producer and the third region is dominated by micro and small largest consumer of natural rubber. enterprises. However, the development India’s Rubber produc on varies of PCPIR (Petroleum, Chemical and O C R between 6 and 7 lakh tonnes annually Petrochemical Investment Region) with a turnover of INR 12,000 million. region in proximity to Capital Region Most of the rubber is consumed by is likely to have a posi ve eff ect on the tyre industry which accounts for the sector in the region and would almost 52% of the total demand. Indian facilitate increased raw material plas cs sector has been es mated to availability for the sector. The sector be at a market size of approx. USD 25 would also benefi t from growth in end- billion in 2012 and expected to reach user industries like food processing, Fig.4.30 Opportunity Assessment for Capital Region – Rubber and Plas cs Industry USD 30 billion by year 2015. India is tex les, pharmaceu cal, etc., which are the third largest consumer of plas c iden fi ed as thrust sectors in Andhra products (outputs), behind China and Pradesh. the US. The sector is currently a highly fragmented (approx. 75% unorganized) and is characterized by high pollu on and low profi tability margins and high level of compe on.

GROWTH DRIVERS 4.4.10 PHARMACEUTI The pharmaceu cal industry in Andhra CAL INDUSTRY Pradesh is a nascent industry in Increasing per capita income together with changing lifestyles resul ng in higher incidence of lifestyle-related terms of contribu on to the overall 61 diseases The Indian pharmaceu cals sector manufacturing industry in the state. Establishment of PCPIR region in Andhra Pradesh ~ characterizes the raw material availability is es mated to have a market size of Jawaharlal Nehru Pharma City Increasing government expenditure on healthcare through various schemes like (CGHS), Na onal Programme approx. USD 12 billion as of FY13, with located in Visakhapatnam is the only for Healthcare of the Elderly (NPHCE), Rashtriya Arogya Nidhi (RAN) and Janani Suraksha Yojana (JSY) a compounded annual growth rate exis ng large scale Pharmaceu cal of approx. 10% during 2005 -13. The cluster in the state which is designed KEY CHALLENGES Indian pharmaceu cals market ranks to accommodate 120 companies. third by volume and 14th by value However, the large coast line, major High pollu ng nature of the industry globally; and contributes to approx. ports and PCPIR hub, etc. are expected Hurdles in environmental & regulatory approvals for new clearances 10% of the total global produc on. The to provide the much needed fi llip to the Absence of eco-system in the region sector in India is expected to grow at a growth of the industry. CAGR of 14% over the years 2014-18. Large popula on, increasing income Dùăî‘Ý Ê¥ CƒÖ®ãƒ½ R›¦®ÊÄ and healthcare expenditure levels in O C R the country would augment growth The region has seen limited of the domes c market. Exports from manufacturing ac vity in the India cons tute approx. 40% of the pharmaceu cal industry and total turnover of the sector in the the exis ng ac vity is primarily country. The country has witnessed characterized by sporadic ac vity in signifi cant FDI and other outsourced Kondapalli industrial estate ac vi es in the sector, illustra ng the increasing demand for generics from Fig.4.31Opportunity Assessment for Capital Region – Pharmaceu cal Industry export markets. Further, there is global opportunity for increasing generics market due to patent expira on of major high-value drugs. The Government of India ini ated policies and tax breaks on R&D which would further enhance the growth of the Sector. 4.4.11 ELECTRONICS INDUSTRY Dùăî‘Ý Ê¥ CƒÖ®ãƒ½ R›¦®ÊÄ GROWTH DRIVERS

62 Indian electronics industry produc on The region has witnessed limited Rising income levels together with increasing propensity to spend, easy availability of credit accounts for only 1-1.5% of the global ac vity in the electronic industry Increasing digi za on and larger investments by the government is driving the demand for the electronics sector electronics hardware produc on of USD and is currently characterized small in India 1.75 trillion. However, the demand in scale units such as Incap capacitors. Iden fi ed as the thrust sector by the central and state government the Indian market is rapidly growing and The industry is highly fragmented investments are fl owing in to augment and unorganized in nature. However, KEY CHALLENGES domes c manufacturing capacity. As the industry in the state is poised for per the es mates of Department of higher growth given the state’s new Over dependence on imports- Currently 40-45% of domes c demand is serviced by imports from countries like Electronics & Informa on Technology a rac ve electronics policy, increasing china, Taiwan etc. (DEITY), Ministry of Communica ons demand and infrastructure subsidy for Inadequate infrastructure and lack of ecosystem- limited infrastructure and poor supply chain management are & Informa on Technology, GOI, the the manufacturers from the central restric ng the product reach demand in the Indian electronics Government market is expected to touch USD 400 bn in FY20 from the market size of USD O C R 69.6 bn in FY12.

The electronics industry in Andhra Pradesh has witnessed limited produc on levels and is primarily characterized by small scale manufacturing units. Sri City, in Chi oor district is one of the prominent centers for electronic manufacturing Fig.4.32Opportunity Assessment for Capital Region – Electronics Industry in the state and comprises of a few SME electronic manufacturing units. Further, the promoters of the park in associa on with ELCINA (Electronic Industries Associa on of India) have already no fi ed 100 acres under EMC scheme.

GROWTH DRIVERS 4.4.12 BASIC AND FAB Dùăî‘Ý Ê¥ CƒÖ®ãƒ½ R›¦®ÊÄ RICATED MET Se ng up of PCPIR in Andhra Pradesh AL INDUSTRY The region has witnessed limited 63 Emerging engineering ac vity, growing infrastructure investments and growth in automo ve sector to boost the ac vity in the metal industry. It is overall ac vity in the subject region. The metal sector in India is almost a characterized by sporadic ac vity in Good transporta on network helps in easy procurement of raw materials to the industries century old, and exhibits signifi cant Kondapalli and Autonagar industrial economic importance due to estates. The region is dominated by KEY CHALLENGES rising demand by sectors such micro and small enterprises. as infrastructure, real estate and Lack of infrastructural facili es will be a deterrent to a ract new investments automobiles. India ranks 4th globally Limited scope for the fabrica on ac vi es as there is negligible steel produc on in proximity to the subject region in terms of iron ore produc on and is Compe on from neighboring clusters the largest producer of so iron in the Falling commodity prices globally world. It is also the 4th largest steel producing country in the world with a produc on of 81 million tons. The O C R market size of the industry is expected to grow from USD 58 Billion in 2011 to approx. USD 95 Billion in 2016.

The Industry in Andhra Pradesh is currently at a nascent stage of development with negligible produc on ac vity across the value chain. The industry in Andhra Pradesh Fig.4.33Opportunity Assessment for Capital Region – Basic and Fabricated Metal Industry is fragmented in nature owing to the dominance by small & unorganized players which manufacture low value added products. However availability of raw materials and overall an cipated growth of the economy are expected to drive the demand for the industry. 4.4.13 TOURISM Table 4.1District Tourist Flow_2013 GROWTH DRIVERS 64 Andhra Pradesh is characterized as the New capital forma on will put the region on the na onal/interna onal map, off ering its opportunity to harness top 10 states of the country in terms Name of District Domes c Tour- the poten al of the region of domes c tourist infl ow, accoun ng ist Infl ow (mil- The scenic loca ons of Capital Region viz. Bhavani islands, caves, Amaravathi Buddhist template, etc. to 98 million tourists in 2013. The lion) – 2013 Increasing middle class disposable income and expenditure towards tourism & leisure state con nued to witness increase Tourism sector is iden fi ed as thrust sectors by state and central governments. in domes c tourist arrivals in the Chi oor 36.23 last few years and is regarded as the KEY CHALLENGES domicile for all types of tourism such as East Godavari 11.25 pilgrimage tourism, heritage tourism, Terrorist a acks, poli cal unrest, crime against women regarded as the major dampeners among tourists. adventure tourism, cultural tourism, Krishna 10.41 Regulatory issues in terms of Visa arrivals for more countries, delay in tourism related projects, etc. beach tourism, etc. Status of the industry as real estate and limited funding avenues from funding ins tu ons Guntur 2.48 Dùăî‘Ý Ê¥ CƒÖ®ãƒ½ R›¦®ÊÄ Remaining 37.63 The popular tourist places in Vijayawada Districts O C R are Undavalli Caves, Mogalarajapuram Caves, , Bhavani Total 98 Island, Victoria Museum, Kondapalli Fort, Gandhi Hill, etc. Located between Krishna & Godavari delta, Kolleru Lake is characterized as the largest fresh water lake in India. The region has also several Buddhist se lements such as Amaravathi. Fig.4.34Opportunity Assessment for Capital Region – Tourism The districts with the highest tourist fl ow in the state is highlighted in Table 4.1.

4.4.14 AEROSPACE SECTOR Dùăî‘Ý Ê¥ CƒÖ®ãƒ½ R›¦®ÊÄ GROWTH DRIVERS Growth in civil avia on & military spending The Indian aerospace industry has The Capital Region currently comprises 65 Low man-hour cost base in India historically been dominated by large negligible manufacturing ac vity in the Increase in FDI limit to 49% & off set policy Public Sector Undertakings (PSUs). The Aerospace segment. However, various aerospace market in India primarily Government ini a ves such as increase comprises the commercial or civilian in FDI cap to 49%, Defense off set policy KEY CHALLENGES and the military sectors. In addi on manda ng 30% local sourcing, etc. are Lack of exis ng aerospace eco – system in the state and the region to this, space research and satellites expected to drive the growth of the Current lack of aerospace grade sub-assembly and raw material contributes to the lack of eco system for the forms another cluster completely industry over the long term horizon. industry administered by the Government of S ff compe on from other Aerospace parks in India viz. Hyderabad & Bengaluru India. In the present scenario defense related manufacturers in India are limited and clustered around Bangalore, Hyderabad and Nagpur. The residual state of Andhra Pradesh has negligible presence of aerospace and allied O C R industries, although the state is home to one of the large rocket launching sta ons in the country viz. SHAR.

Fig.4.35Opportunity Assessment for Capital Region – Aerospace Sector 4.4.15 IT/ITS INDUSTRY Dùăî‘Ý Ê¥ CƒÖ®ãƒ½ R›¦®ÊÄ GROWTH DRIVERS

66 The Indian IT/ITeS industry has been one The region is characterized by neg- Adequate availability of skilled manpower of the great success stories of modern ligible ac vity in the IT/ITeS sector. Physical infrastructure ~ excellent connec vity via road, rail and air to key loca ons in India viz. Hyderabad, India and has helped the country Vijayawada city has an opera onal IT Chennai, Vishakhapatnam and Bengaluru transform from an agriculture based SEZ developed jointly by APIIC and L&T Availability of social and support infrastructure including schools, hospitals, shopping centers, entertainment economy to knowledge based economy. near airport. The revenue avenues etc. in the urban centers of Vijayawada and Guntur The contribu on of the sector to India’s from Vijayawada was around INR 1,150 GDP has increased from a paltry 1.2% million during years 2012-13. However, KEY CHALLENGES in 1998 to an impressive 8.1% in 2014. the sector is expected to witness The industry turnover stood at USD gradual rise over the medium to long Signifi cant compe on from established IT hubs like Hyderabad, Chennai, Bangalore 118 Billion in FY-14 and is expected to term with a number of sustained High land prices can be a deterrent for se ng up new IT units double by the year 2020. ini a ves currently being undertaken by the state government. IT/ITeS sector in Andhra Pradesh is currently emerging with ci es such as Vishakhapatnam, Tirupa witnessing O C R increased investments by the private companies. The total revenues from these ci es were INR 16,280 million for the year 2012-2013, which contributed 0.4% to the na onal revenues. Further, the pro-ac ve steps taken by the state Government in terms of announcing an ambi ous IT policy outlining various incen ves and benefi ts to companies, upgrada on of airports Fig.4.36Opportunity Assessment for Capital Region – IT/ITeS Industry and other infrastructure developments, and emergence of ci es such as Visakhapatnam as the smart ci es to catapult the demand for the sector and a ract major investments.

GROWTH DRIVERS 4.4.16 AQUACULTURE Dùăî‘Ý Ê¥ CƒÖ®ãƒ½ R›¦®ÊÄ INDUSTRY Proximity to natural resources resul ng in lower logis cs cost The region is characterized by signifi - 67 MPEDA to invest INR 46,250 million in the state over the next 5 years on infrastructure (viz. cold chains, etc.) India is the second largest country in cant ac vity in aquaculture industry. Govt. incen ves such as diesel subsidies for 1,500 boats, insurance for 6.5 lakh fi shermen, etc. Aquaculture produc on in the world. It is geographically endowed as it is It contributes nearly 5% of the world’s located in close proximity to lakes and KEY CHALLENGES total fi sh produc on and approx. 8 - rivers viz. Krishna, Kolleru lake, Pulicat 10% of total aquaculture produc on. lake, etc. Favorable clima c condi ons S ff compe on from other states such as Orissa, West Bengal, Tamil Nadu, etc. Seafood exports contribute approx. are the other major reason for quality Dras c climate changes aff ec ng quality of produce 3.32% of the country’s total exports of aquaculture produce in the region. Sector primarily unorganized with small and medium sized producers employing 15 million people. India’s The key growth drivers and challenges long coastline of 7,500 km is the key for the industry are as highlighted in to the aquaculture produc on. The top the exhibit beside: 5 leading fi sh/aquaculture producer states in India are Andhra Pradesh, Karnataka, West Bengal, Tamil Nadu O C R and . The major importers of India’s seafood are Japan, EU, USA, Australia and Middle East.

Andhra Pradesh is the largest producer of fi sh in India with a produc on of 17.68 tonnes of fi sh annually. It contributes to 2/3rd of marine exports from India. Geographical advantages such as 972 kilometer long coastline Fig.4.37Opportunity Assessment for Capital Region – Aquaculture Industry (spanning across 7 districts), 4,120 km of riverine area, 60 reservoirs, 0.5 million ha of brackish waters, etc. are enabling the quality and reliable produc on in the state. The state has witnessed conversion of over 1 lakh acres of agricultural land converted into aquaculture sites during the last. 4.4.17 LOGISTICS INDUSTRY Dùăî‘Ý Ê¥ CƒÖ®ãƒ½ R›¦®ÊÄ GROWTH DRIVERS

68 The demand for logis cs services in The logis cs ac vity in the Capital Introduc on of GST is likely to bring in investments by large players in warehousing space India has largely been fuelled by the Region is characterized by cold Increase in FDI limit to 100% along with 10 year Tax holiday in Port sector can enable the state and the region to growth of the manufacturing sector in chains and small scale unorganized enhance its a rac veness India and the growth of industry can warehouses suppor ng the agricultural Envisaged growth in the overall manufacturing & organized retail business be regarded as a proxy to the overall produc on in the region. The region Development of inland waterways on and the other creeks in the region would enable the posi oning economic growth in India. As per the currently lacks any large scale of the region as mul -model logis cs hub industry es mates, the Indian logis cs warehousing development. However, industry was valued at an es mated the region possesses excellent KEY CHALLENGES USD 130 billion in 2012-13. It was connec vity to regional economic es mated to have grown at a CAGR of hubs via road, rail and air. This well- Lower economies of scale due to high fragmenta on of industry over 16 per cent over the last fi ve years. established transporta on Infrastructural bo lenecks The transport infrastructure in the state network coupled with the an cipated Signifi cant compe on from already established ci es such as Vizag, Chennai. etc. is well established. It is well connected by growth in manufacturing ac vi es in all modes of transport viz. air, road, rail sectors such as F&B, Tex les, etc. are & sea. Further, the state has numerous expected to drive the growth of the cold chains and warehouses owned by sector over the medium term horizon. O C R private operators & the warehousing corpora ons that cater to the exis ng agricultural/ food processing industry. However, the Government proposals to set up various logis cs clusters in the state are expected to trigger the development of organized logis cs clusters in the state.

Fig.4.38Opportunity Assessment for Capital Region – Logis cs Industry

Industry Segment Opportunity for Capital Region Key Growth Drivers 4.4.18 INDUSTRY OPPOR TUNITY MATRIX CAPITAL REGION 69

Short-Medium Term Medium to Long The fi ndings from the above modules Term viz. industrial sta s cal assessment, opportunity assessment and the Food & beverage prod- Largest sector in the state (27% share in the overall output – 2008-11) stakeholder interac ons have been ucts (Agro Processing) analyzed in detail to arrive at the outlook for the iden fi ed industrial/ Aquaculture Exis ng eco-system, favorable climate condi ons & fresh water sources economic uses that have the poten al to trigger the economic development within the Capital Region over the Tex le Industry Abundant availability of raw materials – Substan al export demand short-medium term and long term.

Non-Metallic Mineral Products Downstream opportuni es in the short-medium term due to raw material availability and growth in construc on industry Auto & Auto Components Government thrust and an cipated demand growth in the region

Rubber & Plas cs Strong inter – industry linkages; primarily as a support industry

Pharmaceu cals Hinterland synergies; bordering a large pharma hub; Es- tablishment of PCPIR region to propel growth

Electronics Industry Government thrust, presence of adequate power and manpower

Basic & Fabricate Metal Industry Downstream opportuni es in the short-medi- um term due to raw material availability

Tourism Govt. thrust & places of cultural and religious importance

Aerospace / Defense Emphasis on the industry by both Central & State govt.

Direct synergies with the overall industrial ac vity in the region Logis cs

IT / ITeS Presence of skilled manpower, Govt. thrust

Fig.4.39Industry Opportunity Matrix 4.5BENCHMARKING OF CAPITAL CITIES

70 Benchmarking has been undertaken the trigger point that catapulted of select prominent state capitals the economic growth of the city to which have evolved as economic the next level and led to signifi cant powerhouses in the country. The urbaniza on. The impact of the city has HYDERABAD LAND USE PLAN 2031 Trigger Point ~ 7 Years Later ~ 12 Years Later ~ objec ve of the benchmarking exercise spread to parts of neighboring districts Year 1998 Year 2005 Year 2011 is to understand the growth trajectory of Ranga Reddy, Medak, Nalgonda & ƒ Area* : 2,555 Sq.km ƒ Area: 3,065 Sq.km ƒ Area: 5600 Sq.km of these ci es, key growth drivers and Mahabubnagar. ƒ Population : 5.74 Mn (2001) ƒ Population : 6.47 Mn ƒ Population : 7.74 Mn ƒ GDDP^ (INR Crores) : 16,963 (2001) ƒ GDDP (INR Crores) : 34,347 (2006) ƒ GDDP (INR Crores) : 85,790 (2011) the consequent impact on popula on ƒ Key economic sectors: Manufacturing, ƒ Key economic sectors: ƒ Key economic sectors: Pharmaceutical Pharmaceutical, IT/ITES, R&D Pharmaceutical, IT/ITES, R&D and the expansion of the metropolitan Fig.4.41 highlights the growth trajectory region/urban agglomera on. At this of the Hyderabad over the last 10-15 ye Metropolitan region expanded to 7,228 Figure 28: Hyderabad Evolution Sq.km in 2013 stage of the study, the ci es chosen for ars: Figure 27: Hyderabad Urban Agglomeration the purpose of benchmarking include Hyderabad & Bangalore. E‘ÊÄÊî‘ PÊÝ®ã®ÊĮĦ Fig.4.40Hyderabad Urban Agglomera on Fig.4.42Hyderabad Evolu on The economic posi oning of Hyderabad 4.5.1HYDERABAD URBAN city is primarily defi ned by superior AGGLOMERATION basic and industrial infrastructure as well as the established eco-system for Hyderabad Metropolitan Region, with knowledge based sectors such as IT/ an area of 7,257 sq. km is the sixth ITeS, Bio-tech and Pharmaceu cal. largest urban agglomera on in India. The city has established itself as an Fig.4.42 highlights the economic important hub for knowledge based posi oning of the Hyderabad city and sectors (viz. IT / ITeS and bio-tech) the pillars on which the development and high-value add manufacturing of the city rests: sectors (viz. pharma, aerospace etc.). The growth of the city has been aided C½çÝã›Ù ƒÝ›— D›ò›½ÊÖÛÄã by excellent physical infrastructure The primary growth drivers for ini a ves such as the PVNR Elevated economic development and the key Expressway, Outer Ring Road, MMTS, economic clusters in the city have and the under construc on Metro Rail been analyzed to understand the pa ern of economic development and EvoluƟ on of the city Clusteriza on techniques adopted in The economy of the city has evolved planning the region. over me with the se ng up of Industrial zones in 1930’s to emergence Fig.4.43 highlighted alongside depicts of Pharmaceu cal sector in the 1970’s. the key economic clusters and their Late 1990’s saw emergence of IT sector geographical spread around the Fig.4.41Hyderabad Economic Posi oning with establishment of Cyber Towers in Hyderabad city. 1998, which was considered to be

Fig.4.45 besides highlights various the Karnataka Government. The trigger clusters, prevailing industrial ac vity points that paved the way for the and the key companies driving growth development of the city can be traced 71 in these clusters: to the se ng up of STPI in 1991 and the development of Export promo on Hù—›Ùƒƒ— E‘ÊÄÊÃù industrial park (EPIP) in Whitefi eld The GDP of Hyderabad urban region during the period 1994-96. The agglomera on has grown at a CGAR of turn of the millennium witnessed the 16% over the last 10 years. The growth new age IT companies entering into the in the GDP is primarily cons tuted by city making it the hub for many IT/ITeS the ter ary sector dominated by IT/ITeS companies in India. industry. Fig.4.49 highlights the growth trajectory The popula on in the urban of the Bengaluru agglomera on over Fig.4.43Cluster Based development Fig.4.46Economic Posi oning of Bengaluru agglomera on has also grown at a the last 15 - 20 years: Hyderabad CAGR of 3% over the last 10 year me Cluster Industry Prominent companies horizon. E‘ÊÄÊî‘ PÊÝ®ã®ÊĮĦ The economic posi oning of Bengaluru Cluster 1 Services Cluster Microso , Wipro, Accenture, Google, Infosys, TCS, IBM, Cognizant 4.5.2BENGALURU URBAN city is primarily defi ned by the crea on AGGLOMERATION of industrial investment regions and Cluster 2 Pharma Cluster Aurobindo Pharma, Dr. Reddy’s Laboratories, Neuland Pharma, Gland Pharma signifi cant investments in the educa on Bengaluru is the fi h largest urban infrastructure and basic infrastructure. Cluster 3 Genome Valley Dupont, Shanta Biotech, Biological-E, Bharat Biotech, Uni Sankyo, Lonza, Vimta Labs agglomera on in India with a covered Fig.4.50 highlights the economic area of approx. 8,000 sq km. It is posi oning of the Bengaluru city and Cluster 4 Aerospace/Defence/ TAS, Lockheed Mar n, Sikorsky, Astra Microwave, HCL, Tata Communica ons nicknamed ‘Silicon Valley of India’, the pillars on which the development Electronics because of its role as the na on’s leading of the city rests: IT exporter. Bangalore is also known as Fig.4.44Industry Clusters the intellectual capital of India, due to C½çÝã›Ù BƒÝ›— D›ò›½ÊÖÛÄã Bangalore Intl’ Airport the presence of prominent educa onal The primary growth drivers for (BIA) ins tu ons such as IISC, IIM, NLSIU. The economic development and the key growth of the city has been supported economic clusters in the city have by various infrastructure ini a ves such been analyzed to understand the North as the Outer Ring Road, Peripheral Ring pa ern of economic development and Road, Airport Expressway and Metro Clusteriza on techniques adopted in projects. planning the region. EastE st WhitefielWhitefiel Eòʽçã®ÊÄ Ê¥ 㫛 ‘®ãù Fig.4.47 highlighted alongside depict d SoutheastSouthSo The seeds of growth of Bengaluru the key economic clusters and their were laid by the Central government geographical spread around the investments into the public sector Bengaluru city. industries such as BEL, HAL, ISRO, HMT. Electronic The roots of IT revolu on in the country City were laid in the late 1970’s with the Fig.4.45Hyderabad Economy Fig.4.47 Cluster based development - Bengaluru establishment of Electronics City by Fig.4.51 besides highlights various clusters, prevailing industrial ac vity Gross District Domestic Product of Bangalore at Current Prices (INR Crores) 72 and the key companies driving growth 200,000 Population in these clusters: 11 year 180,000 CAGR CAGR ~ 3% (1999 -2012) ~ 160,000 17.51% B›Ä¦ƒ½çÙç E‘ÊÄÊÃù 140,000 The GDP of Bengaluru urban 120,000 Trigger Point ~ 11 Years Later ~ 20 Years Later ~ agglomera on has witnessed a CGAR Year 1996 Year 2007 Year 2015 growth rate of 17% over the last 100,000 80,000 Area: 421 Sq.Km (2003) 12 years. The growth in the GDP is 174,309 ƒ ƒ Area:* 1,306 Sq.km ƒ Area*: 8006 Sq. Km

60,000 146,299 ƒ Population : 8.4 Mn (2001) ƒ Population : 9.88 Mn (2007) ƒ Population : 11.1 Mn (2011) primarily cons tuted by the ter ary 131,135 GDDP^ (INR Crores): 26,350 (2001) 113,445 113,445 ƒ ƒ GDDP (INR Crores): 1,00,971 (2008) ƒ GDDP (INR Crores): 1,46,299 (2011)

40,000 100,971 sector, which is dominated by IT/ITeS ƒ Key economic sectors: Electronics, ƒ Key economic sectors: IT/ITES, ƒ Key economic sectors: and services industry. 20,000 Defense Biotechnology ƒ IT/ITES, Biotechnology, Aerospace, & 0 Defense, Electronics 2007-08 2008-09 2009-10 2010-11 2011-12 * Metropolitan Region The popula on in the urban ^ Bangalore District (Urban & Rural) and Ramnagara District agglomera on has also grown by 3% CAGR over the last 10-12 year me Fig.4.48 Bengaluru Economy Fig.4.49 Bengaluru Evolu on horizon.

Cluster Industry Prominent companies

Cluster 1 Hardware Park, Aerospace, IT/ Wipro Actuators, Amada, Shell Global Research Center, IBM, Nokia ITES Siemens, Alcatel Lucent, Tyco Electronics

Cluster 2 IT/ITES Wipro, Hical Technologies, Cisco, Accenture, Honeywell

Cluster 3 Bidadi Industrial Parks promoted by KIADB~ Toyota

Cluster 4 Defence & Aerospace HAL, NAL, ISRO Cluster 5 Electronic City Infosys, BHEL, Siemens, 3M, GE, Tech Mahindra, Biocon

Fig.4.51 Industry Clusters Fig.4.50 Bengaluru Economic Posi oning