Growth of Small Scale Industries in Andhra Pradesh

Growth of Small Scale Industries in Andhra Pradesh!

The utility of entrepreneurship development is reflected mainly in the growth of the SSI sector at the State level. Hence a brief review of the growth of SSI Sector in Andhra Pradesh has been attempted here.

Small Scale Industries form a significant part of Andhra Pradesh economy. This sector contributes around 6 per cent of gross state domestic product and employs about 2.5 lakh people. In keeping with the general policy towards the development of small scale sector and its policies to develop women and disadvantaged groups, entrepreneurship among these groups is being encouraged.

Emphasis will be laid on identifying Industrial activity suitable to the area in which disadvantaged groups live and to the creation of infrastructure, augmentation of credit and capability building for these groups. This will include helping them to acquire technical and managerial skills through training programme.

In the earlier plan special emphasis was laid on promoting small scale and labour intensive industries to provide greater employment opportunities particularly in rural areas. The approach adopted during the Seventh Plan, was to insure fair dispersal of industries reducing inequalities between regions.

Growth and Dispersal of Industries in Andhra Pradesh:

In Andhra Pradesh the Commissioner of Industries is in charge of the execution of extension programmes in the field of industrial development with stress on promotion of small scale, village and cottage industries which contribute to employment generation and development in rural economy. The district industries centres established earlier in all the district headquarters are providing all services and support under single roof to prospective entrepreneurs to set up small industries in the rural areas.

They further undertake several programmes like identifying and motivating the entrepreneurs through campaign, training artisans, assisting artisans and tiny units through grants, loans towards rural industrialisation. The Government of India was sharing 60 per cent of the expenditure incurred under establishment charges of DIC. The programme of DIC produced significant growth in the sector of village and small industries.

The SSI board and development commissioner (SI) looks after the policy framework as well as the promotion and development of SSI. In the context the office of the development commissioner, known as Small Industries Development Organisation (SSIO), prepares the estimates of the number SSI units, production, employment and exports.

At the all India level there were 0.42 million units in 1973- 74 and their numbers increased to 3.01 million units by 1997- 98. Their production was estimated as Rs. 72,000 million at current prices in 1973-74 and it increased to Rs. 46, 51,710 million in 1997-98, signifying a very high rate of increase in the value of production by small scale units (SSI). Employment provided by these units also signifies a fourfold increase in 1973-74.

The SSI units were providing employment to 3.97 million, while this increased to 16.72 million in 1997-98. In 1973-74 these units were exporting rupees 3,930 million worth of goods, while in 1997-98 this value increased to Rs. 4, 39,460 million. Thus the SSI sector had been showing progress in the last three decades.

Traits of Entrepreneurs in Andhra Pradesh:

Among the various attempts that had been made to analyze the pattern of entrepreneurship in Andhra Pradesh, a study on emerging investors in East Godavari district of Andhra Pradesh was brought out by the Directorate of Industries, Andhra Pradesh in collaboration with the Administrative Staff College of India.

The objectives of survey were:

(1) To examine profile of Individuals who are potential investors in manufacturing;

(2) To find the motive, attitudes and influences of individuals;

(3) To examine the Industrial potential of the districts;

(4) To suggest the steps to the government to take to attract capital from non-industrial sectors in the district in to small scale industries.

The size of the sample is 200, of with 35 were industrial entrepreneurs. These entrepreneurs belong to Kakinada, Rajamundry areas of East Godavari district.

An analysis of data collected from with sample entrepreneurs through a questionnaire revealed the following attributes of the entrepreneurs:

(1) Out of the 35 industrial entrepreneurs, 9 had come from agricultural sector and 8 from professional groups and 14 entrepreneurs belong to industry and as such they were not new entrants to industry;

(2) A majority of entrepreneurs are in the age group of 35-50 years and none of them had any professional education;

(3) Profit and confidence in the line were the main motives that led individuals to enter industry;

(4) A majority of individuals are influenced in their decision to enter industry by their parents and family relations;

(5) 29 out of 35 entrepreneurs interviewed reported that their competence and opportunities in manufacturing were principal reasons for entering Industry;

(6) The entrepreneurs were influenced by visits to industrial units. Only one individual out of 35 reported that government publicity media was helpful in deciding for him to enter the field of manufacturing;

(7) The initial capital requirements of the units of the sample were rupees 50,000. Most of the entrepreneurs met the requirements from their own personal resources and only one obtained financial assistance from the govt.;

(8) The management of the unit was by the family members of the entrepreneur with technical background in some cases;

(9) 16 out of 35 entrepreneurs reported that they were planning to expand the operations by diversifying into new product;

(10) Only 10 out of 35 individuals reported incidents of labour unrest in their units;

(11) Other issues were facility of long term loans, raw Material shortage, and lack of market for finished products. As for the break even period of new enterprises, the survey shows that the period ranges between one to three years. Some entrepreneurs reported that the government controls were standing in the way for the firm to operate under normal conditions. A majority of entrepreneurs reported material shortage as the major problem, which was responsible for impeding a better performance.

(12) The replies of the entrepreneurs to questions regarding various institutions assistance meant for helping the small industry revealed a complete confusion in their minds on the available sources of help in respect of labour, technical know-how and raw material supplies. In respect of finances however the entrepreneurs were clear about the sources they should approach.

The report had given the following recommendations:

1. Department of Industries should do product research to identify profitable manufacturing lines;

2. Opportunities and profit in manufacturing should be the central theme of the department in its communications;

3. A complete holiday should be given from all the accountabilities to new entrepreneurs;

4. Department should extend the range of services presently offered. It should cease to be simple licensing body;

5. Confusion in the minds of individuals on the sources of guidance should be removed;

6. Guided visits should be arranged extensively to help the entrepreneurs;

7. Demonstration effect is very powerful and it should be exploited;

8. Social image of entrepreneurs should be improved;

9. Publicity strategy of the department should be redrawn;

10. Information relations with various categories of population, particularly with moneylenders are useful and should be used;

Small Industry Extension Training Institute, Hyderabad had undertaken a study of entrepreneurs in the small scale industrial sector in twin cities of Hyderabad and Secunderabad. The study is based on the analysis of information collected from entrepreneurs. The purpose of the study was to determine the influence of selected biographical, sociological and psychological factors on the adoption of the innovation of starting a small scale Industrial unit.

Major conclusions of the study are as given hereunder:

(1) 75 per cent of the respondents were between 31 and 50 years of age, whereas 44 per cent were between 31 and 40 years and 31 per cent were between 41 and 50 years. The typical entrepreneur was of 39 years age.

(2) 80 per cent of the respondents were Hindus, 18 per cent were Muslims and 2 per cent Christians.

(3) 41 per cent of the respondents had college degrees and 33 per cent had passed high school; 26 per cent of the respondents had technical education. Thus the typical entrepreneur had formal college education.

(4) The typical entrepreneur belonged to a family with middle or low income group. Thus among entrepreneur 28 per cent, 25 per cent and 23 per cent belonged to families with monthly income in ranges of Rs. 500 to Rs. 999, Rs. 200 to Rs. 499, Rs. 1,000 to Rs. 1,499 respectively.

(5) 66 per cent of the respondents were local resident and 34 per cent came from outside Secunderabad and Hyderabad and 89 per cent of respondents came from cities.

(6) 61 per cent of the respondents had experience in industry, while another 8 per cent were engaged in business dealing with items similar to what they manufactured later.

The reasons for starting industrial units had been mentioned by the entrepreneurs:

(1) For all the 61 respondents, economic gains were the most important reason for starting the small industry unit. Second most important reason was own ambition. The third and fourth most important reasons were social prestige and social responsibility.

(2) Respondents with high adoption propensity differed considerably in their reasons for starting the industrial units. For Respondents with high adoption propensity, own ambition was the most important reason for starting the industrial units followed by economic gain, inventions and social prestige, while for the other groups economic gains were the most important reason for starting the industrial units.

(3) Risk taking ability did not influence the respondent in their reason for starting the industrial units. Hence there was no relationship between reason for starting the industrial unit and time taken to adopt the innovation.

The emerging factor for starting industrial unit was the high demand for the product perceived by the entrepreneur. Another encouraging factor was experience in the line and the assistance and encouragement received from friends and family.

On the other hand capital shortage and government red-tapism were seen as the most discouraging factors in starting their industrial units. The other discouraging factors are non-­availability of raw materials and manpower.

The entrepreneurs also mentioned about the visits to the general organisations and assistance they received for starting small industry units.

In this regard the responses were:

(1) 79 per cent of the respondents mentioned visiting the office of the Directorate of Industries,

(2) 56 per cent of the respondents visited the small industries services institute.

(3) 20 per cent of the respondents visited the District Industries Office and 18 per cent of the respondents visited the Regional Research Laboratory,

(4) The most frequently visited organisation for the 61 respondents was the Small Industries Service Institute followed by the Directorate of Industries,

(5) The largest amount of assistance was received from the Directorate of Industries followed by the Small Industries Service Institute,

(6) The Directorate of Industries was approached in the case of majority of the respondents for assistance in licenses, location of sites, raw materials, registration etc., and

(7) The Small Industries Service Institute was approached by the majority of the respondents for technical assistance, assistance in the purchase of raw materials and machinery and for obtaining technical literature.

Role of Financial Institutions for Entrepreneurship Development:

In Andhra Pradesh many financial institutions especially those which are assisting SSI Sector are functioning since the formation of Andhra Pradesh. The first step was the establishment of Andhra Pradesh State Finance Corporation in 1956 to provide long term funds to the small and medium scale industries. Later in 1960 Andhra Pradesh Industrial Development Corporation (APIDC) was set up not only to supplement financing function of APSFC but also undertake promotional activities.

It conducted industrial surveys, obtained letters of intents and started manufacturing enterprises as its subsidiaries. Later in 1970 it assumed a new role of lending term loans to medium and large scale units under IDBI’s refinance scheme. It also became the agent of IDBI to channelise risk capital to the technocrat/ first generation entrepreneurs under the seed capital scheme besides it also took up the responsibility of distributing central and state subsidies.

In 1961, a separate agency, the Andhra Pradesh States Small Industries Development Corporation (APIDC) was set up to exclusively address to the needs of small Scale units. It mainly assists small units in the procurement of machinery on hire purchase basis, procurement of scarce raw material and marketing of their products. Of late it has started providing risk capital to private entrepreneur.

However, this is done in few deserving cases to encourage new technology, new product and a first generation entrepreneur. In 1973 the State Govt (A.P.) created the industrial infrastructure corporation (APIIC) to help the industrialists acquire well equipped sites for industrial establishments. The Corporation is engaged in developing industrial estates and construction of factory sheds with all infrastructure and offer them to entrepreneurs at the reasonable rate.

Besides the institutional arrangements at the state level, financial support is made available to industry directly by the central financial institutions such as IDBI, ICICI, DTI, and Insurance companies, usually under a consortium. There are other institutions like SBI and other nationalised banks rendering financial assistance to the entrepreneurs.

Andhra Pradesh Industrial Development Corporation (APIDC) has emerged as an important organ of the State Government to foster industrial growth in the state. The corporation adopted several functions of another organisation that is Industrial Trust Fund. Like Industrial Trust Fund the APIDC in its earlier phases followed the same procedure to ‘ lure the private capital into industry. This arrangement later came to be known as the joint sector approach.

Thus the concept of joint sector was in vogue in the state much before a national policy on it was announced by Government of India in 1973. The first joint sector enterprise in the state, the Associated Glass Industries Limited with APIDC support was incorporated in 1964. The Gangappa Cables Limited in which APIDC participated to the extent of 50 percent of the share capital came into being in 1965. This was followed by ALKALI Metal Limited in 1968, in which APIDC shared 50 per cent of the equity capital. The number of such enterprises gradually increased to 96 as at the end of March, 1987.

A joint sector enterprise comes in to existence in-different forms, the APIDC assumes the role of a promoter, identifies project, obtain industrial licenses and executes the project with or without a private entrepreneur. In doing so it is broadly guided by the industrial policy of the central government and commitment of state government to different regions with in the state.

A JSE is straight away conceived and promoted if the IDC can identify a suitable copromotor. As an alternative, the corporation implements a project as a fully owned subsidiary and as and when a suitable private entrepreneur is identified, the day to day management is transferred in his favour.

In the Third case the project is conceived by a private entrepreneur, the industrial license is held by him and he approaches APIDC for joint participation in the risk capital. Such a proposal may come from a new venture or an established one. A joint sector enterprise may also come into being at the instance of central financial institutions. Getting licenses for industrial goods was a difficult task in the 1970s, but state level agency like Industrial Development Corporations were the preferred agencies for license allotment which in turn distributed them among the private entrepreneurs.

In issuing licenses the licensing authority made it conditional to use some of them to promote the venture in joint sector. As a result, some of the IDCS in the country systematically used the instrument of joint sector to secure as many licenses as possible for the state concerned. The APIDC obtained as many as 113 licenses/DGTD registration until May, 1987, of which 62 (50%) were used while others lapsed of the 62 used for project implementation 24 (39 percent) were in joint sector.

An evaluation of joint sector enterprises shows that not many were successful. One reason had been the caste and the political affiliations of entrepreneurs seemed to have an important bearing on the selection of entrepreneurs and the subsequent treatment of the project. Further the failures were essentially because of machinery / Technology or shortcomings of the entrepreneurs. The paper industry is a case in point where the imported machinery uniformly failed to operate at the rated capacity. The assumption made with regard to raw material also proved wrong in its case. Technology failure or machinery breakdown was a common problem with chemical plants trying with new technology.

A large proportion of Joint sector enterprises were also unsuccessful because of indifferent interest shown by the entrepreneurs. In a few cases their dubious intentions were established. In some cases premature withdrawal of concessions assured by the state government led to the closure of the units. Further some of the projects linked with public sector undertakings could not do well following avoidable disputes.

As the institutions have played a major role in creating these production entities, they have shown concern for their continuation and retrieval of public money involved in them. The curative action varied across the enterprise but with one commonality.

In almost all the cases where the original entrepreneurs proved to be ineffective, a change of management in favour of relatively better experienced and financially strong entrepreneurs was contemplated with a package of concessions and reliefs unlike in the first selection, consideration of nativity was a relegated to the background at the time takeovers. In a few cases they were handed over to big industrial groups in contravention with the object of joint sector policy.

Apart from the failure, there are some notable successes. It may be stated that the additional capacities created and the investment generated by these successful companies perhaps more than compensate the loss sustained in the sick companies having potential to create spin off effects on industrial expansion in the state. Mention may be made of Nagarjuna, Raasi and (SOL) Standard Organic Ltd. groups. Nagarjuna is a diversified group having interest in engineering, cement, fertilizers, finance and investments. Raasi though initially concentrated on cement and cement products and has since diversified into paper, finance and leasing.

SOL groups are highly concentrated in drugs and pharmaceuticals. Certain issues that have come of in the development of joint sector are relevant for the growth of entrepreneurship in Andhra Pradesh. Firstly it needs to be closely examined whether the implicit policy of state government/APIDC to encourage only local entrepreneurs is tenable.

Secondly a proof have to be made whether providing implicit and explicit subsides is the only way of attracting new class of entrepreneurs or there could be alternative use by which encouragement may be given to entrepreneurs. Thus a review of the policy is needed in promoting entrepreneurship in the state.

In view of the policy changes required different agencies in the state have been simplifying their procedures for encouraging entrepreneur to set up new unit. In 1998 the Andhra Pradesh government had introduced a bill named as Andhra Pradesh Small Scale Industry (Development and Simplification of Procedures) Bill 1998.¹⁰ Under this bill there will be an establishment at state level and district level small scale industries development authority.

At the state level the Commissioner of Industries, Andhra Pradesh shall be the Chairman of the authority, to bring more coordination and also to oversee the time bound clearance by the concerned officers in the matter of according approvals, granting permission and issuing license or certificate to the units of small scale industries in the state. This authority consists of not less than 9 and not more than 12 members.

In this particular authority some are to be nominated by the government from among the chief executives of the Andhra Pradesh Small Scale Industrial Development Corporation, Andhra Pradesh Industrial Development Corporation, Andhra Pradesh Industrial Infrastructure Corporation and Andhra Pradesh Pollution Control Board.

According to the new provisions a provisional certificate of registration will be issued to every entrepreneur who is willing to establish a small scale industrial unit in a District within 30 days from the date of receipt of the application by the authority. A provisional certificate or registration issued by the government shall be valid for a period of 5 years and shall be renewable for after a period of 2 years at a time.

Every entrepreneur, who holds a provisional certificate or registration in respect of a small scale industrial unit may, within 6 months after the unit is commissioned can make an application to the concerned industries development authority for the issue of a permanent certificate of registration in respect of said units, and they shall, after ensuring that production facilities have actually been established, issue a permanent certificate of registration to the entrepreneur of the unit forthwith. For this purpose the District Small Scale Industries Development Authority, with the general manager of the DIC as the Chairman of the authority will be responsible.

Once the permanent certificate of registration has been issued, each industrial unit shall be entitled to claim on priority basis all the facilities and benefits that may from time to time be allowed to small scale or Tiny Industry.”

Besides the simplification of the procedure, the financial institutions also step into forward help to the SSI centre. In 1999 SIDBI has reduced the minimum quantum of financial assistance from Rs. 20 lakh to Rs. 10 Lakh for marketing of SSI products and delegate the powers of sanction for non- traditional lines of activities shall be applicable for assistance under the marketing scheme. The APSFC has framed the objective to provide financial assistance to a SSI unit to undertake various activities to increase their turnover in domestic and exports markets.

The second objective is to finance service providers which provide support services and/or infrastructure facilities to small scale sector to improve its marketing capability. For this particular purpose existing SSI units in the small scale sector with a good track record and good sound financial position are eligible for financial assistance. However new units will also be considered on a selective basis. The minimum quantum of financial assistance shall be Rs. 20 lakh for borrowals including working capital term loan.

However the cost of the project should not exceed Rs. 500 Lakh and it may include land, building, showroom facilities, office equipment, core working capital, and regional expenses to be incurred on publicity. The debt-equity ratio shall not exceed 2:1. The loan eligibility is 65 per cent of the cost of eligible components of the project including core working capital. A minimum of 17 per cent premium plus interest tax will be collected from time to time.

A special interest rebate at the rate of 2 per cent per annum shall be allowed for the loans sanctioned towards assistance for marketing of SSI products at the time of closure of loan Account. The term loan shall be repaid in quarterly installment with in a maximum period of Five years with moratorium of one year.

Andhra Pradesh State Financial Corporation is the prime term lending institution extending financial assistance to set up industrial venture in tiny, small scale and medium scale sector in Andhra Pradesh state. The main objectives of the corporation in respect of the small scale industry (SSI) sector are to accelerate the industrial growth of the state in SSI sector, increased employment generation; optimum utilisation of potential resources available in the state for industrial development in SII Sector; improve export potential and diagnose industrial sickness in SSI sector and assist the sick industries to recover from sickness.

In order to achieve the objective the strategy proposed by the corporation is as follows:

(1) To promote infrastructure for development of SSI Sector,

(2) To identify potential lines of activities and effective promotion of industries in these lines,

(3) To create proper organisational arrangements.

(4) To utilise funds available under various schemes like NEF, MUN, SC/ST component plan etc., for development of industries,

(5) Simplification of procedures for quick sanction and timely sustenance to entrepreneurs, and

(6) Conducting development campaigns and participating in entrepreneurial development programmes.

APSFC the strategy includes identification of thrust areas for promoting investment in small scale sector in the state the following thrust areas have been identified keeping in view the availability of raw materials, market potential and other factors of production-

(1) Agro based and food processing industries,

(2) Pharmaceutical formulations,

(3) Chemical and chemical based industries,

(4) Electronics, computer software and hardware,

(5) Mineral based industries.

(6) Engineering industry.

(7) Plastics processing, and

(8) Linear and non-linear computer animation.

The Andhra Pradesh industrial sector, according to Vision 2020, is expected to grow at 11 per cent a year in real terms. For this Andhra Pradesh will need a total investment of roughly Rs. 11, 65,000 crores. Most of this investment will have to be raised through private investment. The growth thrust will focus on 3 types of industries- Knowledge based, resource-based, and labour intensive. Knowledge based industries include Information Technology, bio-technology and pharmaceuticals.

Resource based industries include mining, construction and agro industry. Labour intensive industries include garments and leather products. These are considered growth engines which are expected to foster development of small scale industries. For instance construction and pharmaceuticals are expected to give rise to many opportunities for the small industry.

It is expected that by 2020 Andhra Pradesh will have many dynamic and profitable small scale industries.

Propelled by technological development and capability building, small scale industries will receive an impetus in the state. The proliferation of these industries will provide many opportunities of entrepreneurship and employment.

The approach to developing small scale industries will focus on:

i. Building skills and promoting technological development,

ii. Providing infrastructure and credit,

iii. Reforming policy and simplifying procedure,

iv. Providing assistance with marketing and,

v. Encouraging the development of special categories of entrepreneurs, women, scheduled castes, and tribes, backward classes.

In keeping with the general policy towards the development of small scale sector, and its policy to develop women and disadvantaged groups, entrepreneurship among these groups will be encouraged in the following ways.

First emphasis will be laid on identifying industrial activity suitable to areas in which disadvantaged groups live, and to the creation of infrastructure augmentation of credit and capability building for these groups. This will include helping them to acquire technical and managerial skills through training programmes to ensure access to credit, and the state government will encourage the setting up of local area banks and exclusive banks for women. Second, entrepreneurs from disadvantaged groups will be offered special fiscal concessions such as enhanced tax limits.

In consonance with the dynamic scenario, different state level organisations are coming forward with new schemes to encourage entrepreneurship in the state. APSFC will be now giving more general loans for all proprietary, partnership, private/public Limited companies and to industrial co­operative societies for establishing tiny, small scale industrial units and service oriented industries.

The purpose for which loan would be given is for acquiring assets, for setting up new units and for expansion, diversification and modernisation in case of existing units. The project cost should not exceed Rs. 12 crores. Further the Corporation has a gradation of entrepreneurs for the provision of Financial Assistance.

For 2000-2001, the APSFC has modified its lending policy under three categories namely open, Restricted and not to be encouraged categories. Loans below Rs. 5 lakhs shall be given low priority except in the cases of transport loans, tourism related activity and other special schemes likes Mahila Udhyama Nidhi, National Equity Fund, SEMFEX and Women entrepreneur schemes. If a particular line of activity is not listed in any of the above three categories of lending policy prior approval may be obtained and financial assistance will be considered by the Corporation where there are no sick units.

For all lines of activity listed under open category, a minimum collateral security of 25 per cent of the term loan shall be insisted, for giving encouragement to the entrepreneur. In the case of all lines of activities listed under restricted categories a minimum collateral security of 50 per cent will be insisted.

In respect of units being set up in industrial estates, collateral security shall be insisted on the extent of loans or machinery only, since it is easy to sell the land and building in case of default. For additional term loan being considered to existing good entrepreneur, no collateral security is to be insisted, unless the risk perception so warrants.

For additional term loans to existing entrepreneurs, coming up for expansion/diversification or modernization collateral security of 25 per cent on additional term loan is to be insisted for those lines of activities listed under open and restricted category for which higher collateral security is insisted for new entrepreneurs, unless risk perception warrants higher collateral security. In the case of loans being considered to Nursing Homes/Hospitals the collateral security shall be at the rate of 100 per cent on electro-medical equipment, furniture etc. only and collateral security is not be insisted on land and Buildings.

Likewise the minimum promoters’ contribution for all lines of activity listed under open and restricted category shall be a 25 per cent of eligible assets proposed in the project, however subject to DER norms for individual projects. Financial Assistance shall be considered with a maximum DER of 3:1 for project consisting less than Rs. 10 Lakh and a maximum of 2:1 for project costing above Rs. 10 Lakh as per SIDBI/IDBI finance guidelines.

Thus the APSFC will be exceeding financial assistance to entrepreneurs in different lines of activity for promotion of entrepreneurship in the state.

Another state level organisation, Andhra Pradesh Industrial Infrastructure Corporation (APIIC) had also been expanding its activities to assist the entrepreneurs. Over the years it has built a network of industrial areas in the state; the latest being industries specific parks like growth centres, export promotion industrial park and apparel export park. APIIC is also the agency for taking up internationally funded project be it ADB sponsored or World Bank added as per international standards.

Recently APIIC has set a precedent by floating a joint venture company with the L & T for the development of high-tech city in Madhapur near Hyderabad to provide infrastructure for information technology in Andhra Pradesh. Likewise they have also planned to develop an industrial park at Parvada in Visakhapatnam to encourage entrepreneurship in the growing metropolitan area in Visakhapatnam.

The fiscal incentives now provided are as follows:

(I) State subsidy @ 20 per cent on fixed capital Investment subject to a ceiling of Rs. 20.00 Lakh,

(II) Sales Tax exemption deferment for 7/14 years up to 135 per cent of fixed capital investment.

(III) 25 per cent power rebate on power bills for a period of 3 years subject to a limit of Rs. 30.00 lakh for SSI,

(IV) Investment subsidy of 20 per cent upto Rs. 20.00 lakh for captive power plants up to 1500 KVA capacity,

(V) Sales Tax reduced to 4 per cent on diesel used for captive power generation.

(VI) For mega projects with investment above Rs. 200 crores on case to case basis.

Further the APIIC has also embarked on construction of Mega Industrial Infrastructure Park like Parvada at other prime location in the state. Its latest venture in association with the central government is export promotion industrial park (EPIP) at Pashamyllaram, 30 km away from capital city of Hyderabad. This high potential industrial park holds out more prospects to exporters with a minimum export requirement of 33 per cent of their overall turnover.

Among other institutions that had been striving to develop entrepreneurship in Andhra Pradesh is Andhra Pradesh Industrial and Technical Consultancy Organisation Ltd. (APITCO). APITCO is a single window public sector undertaking, a joint venture of financial institutions like the IDBI, ICICI, IFC, APIDP, PSFC, APSFC, APSSIDC and nationalized Banks like State Bank of India, Syndicate Bank, Indian Bank and Andhra Bank. Its aim is to bridge the gap between the entrepreneur and the financial institutions. APITCO escorted more than 9000 entrepreneurs so far through various commercially viable projects.

85 per cent of these units have been operative profitably and have gone in for expansion and diversifications programmes on their own right. From concept to commissioning this involves market survey, organising of technology transfer, arrangement of Fiancées and buy back, preparation of techno commercial feasibility report, project appraisal through financial institutions, procurements and installation of plant and machinery, startup, Trial runs, Quality Assurance and finally commercial production.

APITCO has been offering technical assistance in the following sectors:

(1) Computer software/End Use computing projects like E-Commerce, Medical Transcription etc.

(2) Infrastructure sector like power, Telecommunications and Highways,

(3) Post Harvest Management of crops and cold storage,

(4) Fruits and Vegetable processing,

(5) Cereal Foods and snacks,

(6) Dairy industry,

(7) Bio-technology,

(8) Non-conventional sources of energy,

(9) Receiving and sending international delegates for technology transfers, equity participation and buy back,

(10) Even Management like organising and conducting national/international seminars and other programmes like-

(a) Entrepreneur Development,

(b) Management Development,

(c) Skill Development,

(d) Attitudinal Development,

(11) Power generation and manufacture of Bio-fertilizers from municipal waste,

(12) Energy Audit programmes and conservation studies for industrial units,

(13) Conduct of Energy Conservation Awareness programmes,

(14) Waste Minimisation studies and implementation of cost effective measures.

APITCO had also been a catalyst in technology transfer in the area of plastics, edible oil refining, castor seed processing, Bulk drugs and chemicals. It had been very active in implementing a detailed plan for modernization of the cluster units in the areas of fruit processing, packaging, Marketing and developing the skill of workers. This organisation is also active in the flotation of appropriate and innovating rural technology.

Further it has affected transfer of low cost appropriate technology to benefit small and tiny sector in the leather, Hosiery and silk units in the state. It has also been assigned the task of popularizing right specific Rural Technologies in select districts of the state by the government of Andhra Pradesh.

APITCO has organised over 20 energy conservation awareness programme for the benefit of local industrialists and engineers at the district level throughout Andhra Pradesh. It has also conducted in-plant Training programmes on energy conservation and management for plant operators, engineers and management in large industrial undertakings.

This organisation has also formulated comprehensive turn around packages for 90 sick industrial units covering a diverse range of products like plastics, edible oil refining and general engineering. It is also a driving force behind the development of export strategies for industrial units tapping the overseas market.

The above emerging perspective on the industrial scene of Andhra Pradesh unravels the integrated strategy for entrepreneurship development in the state. In a country like India mostly we find entrepreneurs either in the imitative category or drone category. The opening up of the economy and the globalisation trends indicate that India has to traverse a path of industrial development where entrepreneurs of risk taking nature should be developed to face the new challenges.

Entrepreneurship acquired a different meaning as betting on the strong is the catchword for the various types of assistance rendered to the entrepreneurs. Hence a tough category of entrepreneurs can alone survive and prosper and the need of the hour is to intervene effectively in the entrepreneurial process for protecting the weaker among the list. In the case of entrepreneurs struggling to find a niche for themselves in the small scale sector (SSI), entrepreneurship has to be nurtured by the State.