Economy of Andhra Pradesh

The per capita income of Andhra Pradesh at current prices increased to ₹2,19,518 in 2022-23 against ₹1,92,587 in 2021-22, up by ₹26,931. This compares with a jump of India’s Per Capita Income by ₹23,476. [1]

The per capita income figure gives a better idea of the standard of living of the people. In 2019-20, the state is ranked eighteenth with 1,69,519 in terms of GDP per capita at current prices. It recorded a growth of 11.17% compared to previous fiscal which was 1,51,173.[13]

Based on CAG report, as of FY 2021-22, per capita debt inclusive of off-budget debt is at 92,797. This is based on budget debt of 3,72,503 crores, and off-budget debt of 1,18,393 crores. [14]

Aquaculture such as cultivating fish, crustaceans, molluscs, Shrimp production etc., are the major occupations of coastal areas. Andhra Pradesh is the largest producer of shrimp in the country, with 70% of the production from the state itself.[16] The geographical location of the state allows marine fishing as well as inland fish production. Cyclones may do less damage to aquaculture than to crop production. Hence, farmers are getting attracted towards this industry. It grew from ₹3.46 billion (US$43 million) to ₹5.61 billion (US$70 million).[17] The Waterbase Limited is an aquaculture unit located at Nellore, it encourages scientific shrimp farming.[18] Most exported marine exports include Vannamei shrimp.[19]

Map of Sugar industries in Andhra Pradesh

Andhra Pradesh has made significant contributions to India's traditional Horticulture crops cultivation. Increased area and production under Horticultural crops has put Andhra Pradesh in a stronger position in terms of attracting investments from private sector.

Given that area and production of fruits and vegetables have been increasing steadily, Andhra Pradesh has the potential to increase its contribution towards the economy by way of exports There is a voluntary shift in the cropping pattern, as returns from Horticulture per unit of land are higher in comparison to Agriculture. The Horticulture is climate resilient, therefore assures higher income to farmers. Due to changing Socioeconomic profile and increasing middle class coupled with higher per capita income this sector has more potential as food habits are changing and people are becoming more health conscious.

The State has 17.48 Lakhs Ha. Under Horticulture crops with an annual production of 301.73 Lakhs metric tons. Horticulture sector contributes approximately 16.07% to the state GVA.

AREA and PRODUCTION:In Andhra Pradesh area under Horticulture crops is 17.48 lakhs Hectors with a production of 301.73 lakh MTs. Andhra Pradesh stands at 1st position in Chillies, Cocoa, Lime, Oil Palm, Papaya and Tomato, 2nd in Cashew, Mango and Sweet Orange in India. A.P. Ranks 1st in area and production of fruits and spices and 2nd in Micro Irrigation area coverage

Andhra Pradesh Fisheries contribute 10% of total fish and shrimp production of India. Accordingly, the government is focussed on developing this huge industry on a large scale. The convenient geographical location of this South Indian state allows marine fishing as well as inland fish production in Andhra Pradesh.The Value of marine products exports from India in 1998 was Rs. 4710 Crores among which the state alone contributed products of Rs. 2000 Crores.This data in itself explains the importance of fisheries in Andhra Pradesh.

Andhra Pradesh constantly tries to increase fish seed production and stocking.For this they are using modern equipments like including the use of satellite data for forecasting movement of Fish shoals. Fishery Rights have been implemented and the government is trying to inspire the labourers to follow scientific fishing techniques that would be promote sustainable development and would be beneficial to all concerned. Issue of separate licenses for fisherman in inland waters and marine fishing crafts are in process.

By 2020, Andhra Pradesh wishes to be a major exporter and provider of highly nutritious food. The central coastal districts of the state have been concentrating on advanced methods of fish production and the farmers are getting encouraged to convert agricultural lands into fresh water fishponds to obtain better yields and also to make full use of fresh water.

Apart from fishing, Andhra Pradesh government is also inspiring to develop economically in other ways. Accordingly, the fisheries are developing as sites for recreation amidst the scenic beauty. Activities like boat riding in lakes and reservoirs, establishment of Angling clubs, ornamental fish and aquariums and construction of marine parks are upcoming for additional income.

In order to improve the productivity of the existing livestock, a massive programme of Breed Improvement through door step Artificial insemination is launched by Government of India under the scheme of NPCBB Restructuring of Breeding Operations.

Andhra Pradesh is one of the pioneer states which has taken up "Restructuring of Breeding Operations" by involving farmers organizations by establishing state level autonomous body. APLDA is formed in April 2000, to provide quality inputs and for channelizing inputs to the AI practitioners to take up doorstep AI on self-employment basis. It has taken up a gigantic task to expand AI facilities, to cover entire breedable population aiming at Productivity optimization. APLDA provides animal breeding services at farmer's doorstep, on cost recovery basis, covering total breedable population of 105.83 lakhs cattle and buffaloes belonging to 30 lakh farmers spread over 28245 revenue villages in the state. APLDA is an autonomous organization with specialized objectives.

Genesis APLDA was registered under AP Societies Registrations Act, 1350 Fasli with registration No: 7146 of 1999 dated: 13 October 1999. The Government have appointed the Chairman & Executive Committee (EC) members vide G.O Ms No: 85, dated: 2 August 1999. As per AP Reorganization Act 2014, APLDA has been included in Tenth Schedule and the Executive Committee & General Body resolved for division into two separate entities with the names APLDA which started functioning separately since 2 June 2014. APLDA is now extending its operations in thirteen (13) Districts of A.P. State.

Objectives To expand Artificial Insemination to cover entire breedable population at farmer's doorstep aiming at productivity optimization through improved breeding and through a system of recycling of revenue, making it self-sustainable.

To channelize all the inputs needed to provide Artificial Insemination facility.

To regulate and ensure quality control of inputs and services rendered by the field workers.

Capacity building of personnel for effective management.

Functions Production and procurement of quality inputs like Frozen Semen, Liquid Nitrogen, equipment and their timely supply.

Crossbreeding of cattle, up-gradation of buffaloes, maintenance and development of indigenous Germplasm in breeding tracts and assessing the breeding needs.

Maintenance of quality Artificial Insemination services.

Standardizing methodology of AI and designing of training programmes.

Generation of self employment to unemployed rural youth as Gopalamitras.

Training and positioning of the AI Technicians.

Educating the farmers on breeding activities and reproductive management.

Applying the latest technologies & presenting the benefits of advanced research programmes at the doorstep of farmers.

The software industry in Andhra Pradesh is conveniently spread out to different cities, namely Visakhapatnam, Tirupati and capital city of Vijayawada, and not clustered just in the capital, leading to so many social, economic and political problems. Most software companies in Andhra Pradesh are out of state or foreign companies which are also called multinational corporations. Domestic software industry in Andhra Pradesh seems to be at its beginning stages.[20]

In May 2021 the Government of Andhra Pradesh released the Andhra Pradesh IT Electronics Policy 2021–24, aimed at creating a world-class electronics manufacturing infrastructure. In a release, Principal Secretary (Information Technology, Electronics and Communications) said that the policy is envisioned to transform Andhra Pradesh into a hub of IT and Electronics.[21][22]

Pulsus Visakhapatnam Campus

Software companies with facilities in Andhra Pradesh, as well as country of headquarters:

• Cyient - India
• HSBC-GLT - United Kingdom
• IBM - United States
• Tech Mahindra - India
• Wipro Technologies - India
• Pulsus Group[23][24] - United Kingdom
• Conduent - United States
• WNS Global Services - United States
• HCL Technologies[25] - India

The Government of AP plans to convert Vizag city into an IT hub made many new investments from multinational companies. Many firms such as Google, Tata Consultancy Services, Microsoft, Uber, Pulsus Group, Adani Data Center, Capgemini, Accenture etc. have accepted to set their office locations in Vizag.

Andhra Pradesh, as part of the Digital India IBPS Promotion Scheme (IBPS), has secured 13,792 seats out of a total of 48,300 seats available across India and created 10,000 jobs.[26][27] Pulsus, a company that invested Rs. 440 crore, performed exceptionally well, obtaining 4,095 IBPS seats. This achievement placed Pulsus ahead of 154 companies in 93 cities. Consequently, 5,000 jobs were established in Visakhapatnam, with 4,000 of these opportunities being filled by women. [28] Pulsus also received Rs. 41 crore in viability gap funding. Gedela Srinubabu, CEO of Pulsus, expressed immense pride in their contribution to IBPS's success, which has resulted in the creation of 25,000 jobs over a span of 15 years, including 5,000 through IBPS. Minister Rajeev Chandrasekhar praised Pulsus's accomplishments and aims to extend the programme to Tier 2 and Tier 3 cities as well as rural areas, thus shaping India's digital future. Arvind Kumar, Director General of STPI, also commended Pulsus for its significant role in promoting women's employment.[29][30]

Tech Mahindra Development Centre

The ITES and IT sector is growing at its pace in the city of Visakhapatnam, the generated revenue from these sectors are a boon to the economy.[31] The IT special economic zone and incubation center exists at Rushikonda Hills, of the city. There are many national and multi–national IT/ITes and banking firms such as Mahindra Satyam, Pulsus Group,[32][33] Wipro, Kenexa, Infotech, IBM, Sutherland, and HSBC etc. Software exports from Visakhapatnam have increased by nearly 90% each year.

IBM-Software-IconicCampus-Visakhapatnam

The IT exports from the city for 2012 were ₹1,200 crore and 16,000 people were employed. According to data released by the state IT department for the financial year 2012–13, IT industry registered an impressive in IT/ITES revenues, that generated ₹1,445 crore (US$180 million), an increase of 20%, compared to the previous financial year. The same year saw an increase in employment, generated by the IT/ITeS industry, with 20000 jobs as compared to 16,000 in 2011–12 period.[34] The Information Technology Investment Region (ITIR) project, planned by the Government of Andhra Pradesh, may generate employment to approximately, up to 15 lakh IT professionals and also the it can generate revenue for the economy, of up to ₹3.11 crore (US$390,000).[35]

Govt of AP plans to convert Vizag city into an IT hub made many new investments from Multi-National Companies. Many firms such as Google, Tata Consultancy Services, Microsoft, Uber, Pulsus Group, Adani Data Center, Capgemini, Accenture etc. have accepted to set their office locations in Vizag.

There are many national and multi–national IT/ITes and fintech firms such as IBM, Wipro, Pulsus Group, Tech Mahindra, Kenexa, Infotech, Conduent, Cyient, Paytm, Concentrix, Sutherland, HSBC, etc. Some more investments are in line, like Google X, Lalith Ahuja's ANSR Consulting, Franklin Templeton, Innova Solutions, etc. at Fintech Valley in the city.[36][37] Conduent has highest employees in India, third largest outside United States and operating from NCR (Noida and Gurgaon), Bangalore, Hyderabad, Kochi and majorly from Visakhapatnam. [38][39]

The IT/ITES in Vijayawada is increased very well in recent times there are software companies in and around Vijayawada. HCL as a campus in Gannavaram Vijayawada which the fastest growing campus and TechMahindra started its operation in Medha it Park Gannavaram. There is another it park in Mangalagiri which is home to PI Data Center, VSoft,KJ Systems, KPMG has a satellite office etc.

CELKON Manufacturing plant at Tirupati

Sri Venkateshwara Mobile and Electronics Manufacturing Hub is a dedicated mobile handset and electronics manufacturing facility located at Tirupati. The hub is spread over 122 acres (49 ha) out of which Celkon is established in 20 acres (8.1 ha), Micromax in 15 acres (6.1 ha), Karbonn in 15.28 acres (6.18 ha) and Lava in 20 acres (8.1 ha) with a total investment of rupees 2000 crores.[40][41] Dixon Technologies has a manufacturing unit in this hub, where they are producing Smart TVs for Xiaomi.[42] and is the hub for several software companies including Zoho Corporation,[43] Software Technology Parks of India has its regional office at Tirupathi to monitor local software industry. [44]

DIXON Facility at APIIC EMC Tpty

Startup Village is a not-for-profit business incubator based out of Kochi has set up a similar incubation facility in Visakhapatnam, Andhra Pradesh with the name Sunrise startup village.[45][46] The organisation aimed to launch 1,000 technology startups over the next ten years and start the search for the next billion-dollar Indian company.[47] It focusses primarily on student startups and telecom innovation. It is India's first incubator that is funded jointly by the public and private sectors.[48]

The state has 39 operational special economic zones (SEZs). There are 272 Industrial estates and industrial development areas in the State, covering an area of 14700 hectares. The State Government is in the process of developing Industrial Parks at different places, for specific groups of industries like Visakhapatnam Export Processing Zone.

Food parks, one each in the two regions of coastal Andhra (value added rice products, dairy, horticultural, marine etc.); and in Rayalseema region (processing of vegetables, edible oils and export oriented industry). Agri Export Zones for the following produce are proposed at the places mentioned against them:

• Red Chilli – Guntur district,
• Mangoes – Krishna district,
• Silk – Hindupur,
• Mango pulp and fresh vegetables – Chittoor

Kia Motors India - Penukonda

Isuzu Motors India - Sri_City

Hero_MotoCorp - Sri_City

Road transport remains the primary mode of transport in the state. The state is criss-crossed by 5,293.43 km of National Highways and 15,406 km of State Highways. The National Highway 16, which is a part of the Golden Quadrilateral passes through the state from north to south and is at the centre of the road network. The National Highways are developed and maintained by NHAI while the state highways and other roads are maintained by the Andhra Pradesh Road Development Corporation. The state has a road density of 32.82 km/km², higher than the national average of 30.45 km/km². Andhra Pradesh State Road Transport Corporation operates buses that form the primary mode of transport across the state. As of March 2017, there are 11,962 buses in operation.

The roadway network of the state of Andhra Pradesh covers an overall span of 91,313 miles or 146,954 km. The state public works department has the responsibility of looking after the roadway transportation system of the state of Andhra Pradesh. The road transportation network of Andhra Pradesh is made up of the following:

• National Highways (covering 2,949 km or 1,832 miles)
• State Highways (spanning 42,511 km or 26,415 miles)
• District Roads (covering 101,484 km or 63,059 miles)

The development rate for car proprietorship in the state is the maximum in India and stands at 16 percent.

Andhra Pradesh has a total broad gauge railway route of 3703.25 km and has no metre gauge railway.[49] The rail density of the state is 16.59 per 1,000 km (620 mi), compared to an all India average of 20.[50] The Howrah–Chennai main line which runs through the state is proposed to be upgraded into a high-speed rail corridor through the Diamond Quadrilateral project of the Indian Railways.[51][52]

There are three A1 and twenty three A-category railway stations in the state.[53] Visakhapatnam railway station has been declared the cleanest railway station in the country.[54] The railway station of Shimiliguda was the first highest broad gauge railway station in the country.[55] Three iconic bridges that span the river Godavari - the decommissioned Old Godavari Bridge, the Godavari bridge and the new Godavari Arch bridge are widely regarded as architectural and engineering marvels of the state.

There are three international airports in the state at Tirupati, Visakhapatnam and Vijayawada. There are domestic airports at Kadapa, Rajamuhndry and Puttaparti. The government is planning to develop a new international airport at Bhogapuram and two new domestic airports at Dagadarthi and Orvakallu to serve the growing needs of the state.

Ship at Visakhapatnam seaport

Andhra Pradesh has the second longest coastline in the country and the longest coastline on the eastern coast. Vishakapatnam Port, a major port operated by the central government is the fifth busiest port in the country. Keeping in mind shift of trade towards India's eastern coast, the government is developing 14 non-major ports in the state, out of which five are operational. There is a huge scope for inland water transportation in the state through the network of river interlinking canals that are being developed. However, the current status of it is minimal.

The latest available statistics (as in 2001) show that there were 3003 Telephone exchanges, 3140948 telephone connections, 118 telegraph offices (excluding extension counters, telecom centres, and combined offices) and 78218 public telephones. As at November 2020, According to Telecom Regulatory Authority of India it is estimated that there are 87.47 Million Wireless Subscriber Base and 1.38 Million Wireline Subscriber Base in the state with a tele density of 98.31%.[56] According to Department of Telecommunication as on 31 August 2020 The State has a share of 7.53% in All India cell phone subscribers.[57]

Dr Narla Tata Rao Thermal Power Station

APSFL is a whole owned government of andhra pradesh enterprise which provides telephone, internet and television to residents in Andhra pradesh.[58]

The banking and finance sector of Andhra Pradesh constitute the key commercial activities that enhance the growth and stability of the state's economy. The spectrum of the sectors range from core Banking transactions like deposit and withdrawal to financial operations like retail Banking, loans and investments schemes.

The banking sector comprises a widespread network of branches and counters from where the facilities of monetary transactions are offered to the people. From commercial companies to individuals, the government recognized and private Banks of the place provide prompt, efficient and accurate services to all. Some of the important Banking institutions that dominate the fiscal structure of Andhra Pradesh are:

• Andhra Bank
• State Bank of India
• Allahabad Bank
• Bank of Baroda
• BM Deena Bank
• Balaji Urban co-operative Bank

The finance sector of Andhra Pradesh is involved in improvement of the poor financial scenario of the rural corners of the place. The State Financial Corporation comprises a number of Finance companies that offer convenient monetary services especially to the less privileged section of the society. With diverse range of flexible deposit schemes, these financial institutions also provide wide array of fiscal services to the local people.

The co-operative financial organizations set up in both the urban as well as rural parts of the state helps in strengthening the core base of the economic infrastructure. The sole aim of all the banks and financial institutions is to promote the existing industries and improve the living standards of individuals of the place.

Collectively, the banking and finance industry of Andhra Pradesh work towards the betterment of the economic viability of the state.

The state is a pioneer nationwide in hydro electricity generation, encouraging privates sector in power generation and efficient use of its coal based thermal power stations. The state has become power surplus with excess power generation being exported to other states.

Thermal (natural gas and coal based) and renewable power plants totalling to 21,000 MW are installed in the state by the year 2015. Thermal power plants with total capacity of 9,155 MW are situated in the state which includes Simhadri Super Thermal Power Plant (2000 MW) of NTPC, Rayalaseema Thermal Power Station (1050 MW), Sri Damodaram Sanjeevaiah Thermal Power Station (1600 MW), Vijayawada Thermal Power Plant (1760 MW), etc. Hydel power plants are having a capacity of 1798 MW.[61]

This can be called the 29-year era of 12 centrally nominated chief ministers. Excluding Kasu Brahmananda Reddy term (7 years), average tenure of a chief minister was less than two years. The cumulative growth during this 30-year period for Indian economy is 311%, and for Andhra Pradesh it was 138%.

An academic study of Andhra's economic activity using official data collected by the state government of Andhra Pradesh, Govt of India and World Bank reveal the following highlights.

1. A Domestic Demand – Supply based economic policy instead of exports oriented policies during this pre-liberalization period resulted in Constant Currency (inflation adjusted) cumulative growth rates of 151% in seven years, one and half times higher than the cumulative growth rate of the 31 years earlier, and 25% higher than the cumulative growth rates of 20 years that followed.[63]
2. Education reforms, local government empowerment, irrigation and electricity improvements, corruption controls of this period resulted in cumulative per capita income growth rates (corrected to inflation and population growth) ten times the growth rates for the first 30 years and three times the rates of the 20 years that followed. On average a typical Andhra resident was 3000% more productive in improving his/her economic condition than in the 30 years earlier and 450% more productive than the 20 years that followed.
3. Distributional and social indicators (rural education 51%, child labor (−60%), malnutrition (−81%), infant mortality (−37%), female education (77%)) improved at rates that are yet to be repeated.[64]
4. Fiscal Management Indices (deficit, foreign debt, debt servicing levels, etc.) were at their best levels compared to the era the followed when central government allowed higher deficit targets and allowed foreign borrowing directly from world bank as a part of the liberalisation regime.