Andhra Pradesh among key investment hubs for Australia
After topping the Ease of Doing Business list, Andhra Pradesh has emerged as a major state for investment from Australia, as the states resources and...
New Delhi: After topping the Ease of Doing Business list, Andhra Pradesh has emerged as a major state for investment from Australia, as the state's resources and energy sector matched Australian capabilities in mining, METS and renewable energy technology.
Andhra Pradesh topped the state-wise Ease of Doing Business rankings and the state's Gross State Domestic Product grew at 11 per cent per annum over three years to 2017. The construction of a Greenfield capital city also attracted major foreign players and offered opportunities for Australian infrastructure and urban development providers.
According to "India Economic Strategy to 2035", "While Australia needs to continue to engage with India as a national economy including on its macro settings, India's federal structure means that states hold many of the levers controlling the investment climate. The progress of their reform agendas will combine to have a greater effect on India's economic future than that of the Central Government."
According to Australia's outlook on Indian states, there are the states with the greatest economic heft - Maharashtra, Gujarat, Karnataka and Tamil Nadu - and among the fastest growing - Andhra Pradesh and Telangana. The four economic powerhouses of Gujarat, Maharashtra, Karnataka and Tamil Nadu are large contributors to GDP, focused on the 'investment climate' with relatively high rates of urbanisation and increasingly sophisticated consuming classes.
It further stated that Andhra Pradesh and Telangana have strong economic momentum, driven by a focus on the ease of doing business, infrastructure development, and abundant natural resources. There is strong competition from foreign players in these six states.
"India Economic Strategy to 2035" report praised the efforts of Andhra Pradesh Chief Minister N Chandrababu Naidu to develop the state's economy. It said, "The Following the state's bifurcation in 2014 when the state's former north-western region was carved out to become a separate state, Chief Minister Chandrababu Naidu embarked on an ambitious plan to rebuild the state economy, attract investment, pilot policy reforms and drive innovation. Naidu spearheaded Hyderabad's development from 1994 to 2004 and is bringing a similar zeal to major state-building projects. The port city of Vishakhapatnam, with the state's highest per capita income, is being developed as a new FinTech hub."
The report further remarked on the implementation of Goods and Services Tax, and said, "The GST is contributing to the reconfiguration of Centre-State fiscal relations. The GST Council, which has representation from all states and the Centre, gives states a major role in the way the GST is administered. At the same time, the states now have a diminished ability to use tax policy as a vehicle to attract investment. They will need to find more innovative ways to shape the investment climate to lure investors."
However, the report specifically spoke about states ruled by the Bharatiya Janata Party and commented, "Political alignments or differences between the Centre and state governments have undoubtedly played a part in the variation of state responses to the national reform agenda. Some states ruled by BJP governments have demonstrated better reformist credentials under the ruling BJP at the Centre.