Andhra Pradesh government has announced a policy to encourage setting up of automotive and ancillary factories in the State assuring to facilitate faster implementation of projects.

In a government order passed by JSV Prasad, Principal Secretary Industries, the AP government has assured new projects coming up that any incentive the State is entitled to as part of the AP Reorganisation Act would be passed on to the automotive companies. As per plans, it is proposed to develop an automotive hub in the Nellore-Chittoor region as it is close to both Bengaluru and Chennai and has solid infrastructure support, including a port to support new projects.

The State is keen to attract automotive majors such as Maruti, Hyundai, Honda to set up new plants while encouraging development of ancillary units.

Outlay As per the policy, a mega integrated automotive project would have investments of over ₹1,500 crore, which will also play a role in setting up of ancillaries with an outlay of ₹500 crore. The State government would provide land where ever it is available at a concessional rate along with uninterrupted power supply, four-lane road connectivity to the plant to the nearest Highway and all State-level clearances through a single-window system within 60 days. As part of the policy framework, a new project would have 100 per cent CST reimbursement for 10 years or as per GST regime, whichever is applicable. The gross VAT reimbursement would be on sale of finished goods for 20 years, or 150 per cent of capex spent in the first seven years, whichever is earlier. Other incentives include concessional State VAT, power cost reimbursement, no entry and Octroi levies, reimbursement of stamp duty and water supply.

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