Naidu Taking a Risk For Investments?

Andhra Pradesh government is mulling to offer industrial incentives to a soft drink company by relaxing the norms of the ‘negative list’. Andhra Pradesh industries department had a ‘negative list’ which is precisely a list of companies which are ineligible to claim special incentives. Such industries include non-fruit based soft drink, plastic, tobacco-based, coal-based thermal power and chemical industries.

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There is 60 such type of industries in the negative list of Andhra Pradesh. But then a soft drink manufacturer approached the state government with an irresistible offer. The company has proposed to set up five units in AP including one in Visakhapatnam district. It has proposed to invest about Rs 400 crore and create jobs for about 1,200 people.

We are told that Naidu is planning to relax the norms and extend incentives to the company. The government recently directed the APIIC to allot 100 acres for the soft drink plant in the port city. With this relaxation, the company will get 100 percent reimbursement of stamp duty and transfer duty paid by it while purchasing land. The government will also reimburse power charges at 75 paise per unit consumed during the first year of operation. It will also get a subsidy on power for another four years.

However, aerated water based units are known for causing water pollution and emptying the ground water in the area. This relaxation will bring other problems for the state. It is understandable that the investment of such size is tempting for the state government which is cash-strapped. But then, there can no value to the rules and norms if the government itself is bending them when needed.