The Andhra Pradesh government has cleared industrial investment proposals worth Rs 93,000 crore (Rs 930 billion) during 2006, which constitutes 10.2 per cent of the entire investment in the country.

"Our state stands in second position after Maharashtra when it comes to attracting investments," Finance Minister K Rosaiah told the State Legislative Assembly while presenting the State Budget for 2007-08 on Monday.

"Our government is adopting a two-pronged strategy to promote industries in the state. Te first one being, providing concessions, subsidies and incentives to help the industries in the state to become competitive and grow at a brisk pace. For the first time, the power tariff for the industry was reduced, making it the most competitive in the country. For small-scale and new industries, we are providing a subsidy of 75 paise per unit of power," he explained.

The finance minister said that single window clearance has been established to avoid inordinate delays. To the entrepreneurs who are setting up small-scale industries, the government is providing capital subsidy. An allocation of Rs 75 crore (Rs 750 million) has been earmarked for this purpose in the state budget for 2007-08.

"We are committed to providing world class infrastructural facilities to make AP manufacturing hub for national and international companies. A lot of world class companies have offered to establish their production units in the State. First Phase works of the prestigious semi-conductor manufacturing facility-FAB City -- are already underway. The second phase will be started as soon as the Central government announces the semi-conductor policy," he added.

The Apache factory manufacturing shoes at Tada in Nellore district has already commenced production.  The expansion programme of Visakhapatnam Steel Plant budgeted at Rs 9,000 crore (Rs 90 billion) has already commenced. The government has recently cleared Rs 1,200 crore (Rs 12 billion) proposal of MLR Motors project for setting up car manufacturing. For the benefit of handloom weavers and leather industry, textile and leather parks are being established in all the regions of the state.

Reiterating the government's commitment to spread information technology and communication (ICT) across the spectrum of the state, which was hitherto limited to small pockets like Madhapur and Gachi Bowli on the outskirts of Hyderabad, he said that "a conscious effort is being made to spread and take the IT to areas around Hyderabad and even to small towns, so that the entire state will be transformed into a knowledge society.

He said that the government has identified 31 special economic zones for setting up of IT units in different  districts and necessary infrastructure is being provided. Warangal, Visakhapatnam, Kakinada, Vijayawada and Tirupati are being promoted as Tier-II IT hubs in the state. The State has maintained the first position in IT growth rate during the last two years.

The finance minister said that the government focussed on developing the infrastructure facilities like power, roads and transport to global standards. The state budget for 2007-08 earmarks Rs 1,750 crore (Rs 17.50 billion) for construction and maintenance of roads. The government has also taken up expansion of 12 non-major ports for enhancing the cargo handling capacity from the existing 18 million tonnes per annum to 100 million tonnes by 2012.

Works are going on at a rapid pace at ports like Gangavaram, Krishnapatnam, Nizampatnam and Machilipatnam. In fact, it is planned to bring Gangavaram and Krishnapatnam ports into operation by 2008.

To keep pace with the growing demand, the expansion of airports at Visakhapatnam, Vijayawada, Rajahmundry and Puttaparty would be taken up immediately and Memorandum of Understanding for development of airports at Warangal and Kadapa was reached with Airports Authority of India recently. Simultaneously, techno-economic feasibility for development of Greenfield airports at Nellore, Ongole, Ramagundam and Tadepalligudem would be taken up.

"We have provided free power to the farmers for the last three years without resorting to tariff hikes for domestic and industrial consumers and retained our Numero Uno position in power sector in the country," Rosaiah said and added that the government has initiated all the necessary steps for capacity addition to meet the growing demand for power.

In the coming year, more capacity would be added as the natural gas needed for power production is being made available. In all, 8,963 megawatts capacity is going to be added to the existing capacity in power sector during the XI Plan period (2007-2012). Besides, a major power project of 4,000 MW capacity at Krishnapatnam and the 1,000 MW expansion project at Simhadri are being taken up in the state during the XI plan period.

"The new Hyderabad international airport will be ready for operation by the end of next financial year. To east traffic congestion in Hyderabad, we are constructing Outer Ring Road with an outlay of Rs 4,000 crore (Rs 40 billion). Flyovers are being constructed at important junctions. Mass Rapid Transport System (Metro Rail) is proposed to be established with an estimated cost of Rs 8,760 crore (Rs 87.60 billion). An expressway project that will catapult Hyderabad to international standards is being planned with Rs 600 crore (Rs 6 billion)," he pointed out.