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Kick-starting start-up promotion in AP
Much before the Government of India came out with its own policy on Start-ups, the Government of Andhra Pradesh, just six months after taking over charge, had framed an exclusive policy titled ‘AP Innovation & Start-up Policy 2014-20,’ vide the GO.Ms.No.17 dated 09-09-2014.
Policy announced in 2014, guidelines issued last week
Mega sops for industries
- A land bank of about 15 lakh acres envisaged
- Besides, govt already pooled about 33,000 acres
- Plans are afoot to pool another 17,000 acres
- Centre urged to denotify 30,000 acres of forest
Much before the Government of India came out with its own policy on Start-ups, the Government of Andhra Pradesh, just six months after taking over charge, had framed an exclusive policy titled ‘AP Innovation & Start-up Policy 2014-20,’ vide the GO.Ms.No.17 dated 09-09-2014. The vision envisaged through the policy is to create a world-class technology start-up eco-system by fostering entrepreneurship and a culture of innovation.
A closer examination of the set of policies declared by the State shows them to be too ambitious, not only in terms of the targets, but also in terms of the institutions and mechanism contemplated to be created. First, the vision declared by the State seeks to see the State as one of the three developed States by 2022. A period of just five years is left to meet this objective.
Second, preparing a perspective plan (Vision Document) for 2050 and trying to place Andhra Pradesh as one of the most prosperous States in the entire world is too general and can be imagined only in fiction writings. As a famous Development Economist Lord J M Keynes said, “in the long run, we are all dead.”
Third, many targets like the establishment of 100 incubators, incubation of 5,000 companies, creation of at least one home-grown billion dollar start-up company were scheduled to be completed by June 2019, whereas the guidelines for setting up of the same were published a few days ago (on 28-06-2016).
The State government organised the ‘Partnership Summit’ at Visakhapatnam with much fanfare. An awful sum of Rs 4.67 lakh crore investments were said to have been committed. In had been the earlier experience with these summits that a greater part of the commitments does not turn into actual projects.
The Land Bank Scheme of the government has also come under severe criticism. The government has proposed to create a bank with about 15 lakh acres. In addition, it has been ‘pooling’ the land from farmers for the construction of new capital. Under this initiative, it has already pooled about 33,000 acres and is proposing to pool another 17,000 acres.
In addition, it has been also trying with the Central government to get the forest land denotified to the extent of about 30,000 acres. Thus vast tracts of land are collected to be placed at the disposal of the industrial units. The irony of the situation in the State is that not even 10 per cent of the units that got the precious land allotted in their favour have started their operations.
Thus vast amount of land is drawn into real estate and not for the genuine industrial activity. The development model of the State centering around ‘land and concessions,’ something like ‘All free offer’ may cause more harm than benefit to the State. It is appreciable that the newly formed Government of Andhra Pradesh has become highly conscious of the new development models and encouraging the youth to join the ‘Army of Start-ups’.
While welcoming the initiative, the author suggests the following measures for realising the dream of the new government:
The government shall make allotment of the land on a priority basis. Committing the land under 99 years lease also does not appear to be wise enough. There shall also be equity in the sharing of consideration (proceeds) between the Government and the true owner/owners.
Like the Central government, the State Government also shall earmark separate ‘corpus’ for encouraging persons with ideas. This may be like the ‘Innovation Fund’ created by many governments and corporates.
An attempt shall be made to establish proper link between the skill development activity and the Start-up initiative. Setting up of a separate directorate for start-up promotion in the State is also worth considering. The services of the directorate could be used for identification, monitoring and coordination of the various activities connected with the Start-up activity.
Special attention also needs to be bestowed on the backward areas located in Uttar Andhra and Rayalaseema where education, health and services are a problem. (Writer is former Vice-Chancellor, Acharya Nagarjuna University)
By Prof K Viyyanna Rao
