Frequent bandhs and power cuts in the state make it difficult for them to convert orders from domestic and overseas customers.
Women entrepreneurs in Andhra Pradesh are facing the heat due to the frequent bandhs and power cuts in the state. While they have been receiving business enquiries regularly from both domestic and overseas customers, these are not turning into orders.
Considering the current situation in the state, these entrepreneurs are now considering shifting to other parts of the country. They have already got an invitation from the Gujarat government.
The Association of Lady Entrepreneurs in Andhra Pradesh (ALEAP) represents 3,000 women members who employ a total of 90,000 people in the state. They are spread across businesses such as engineering, trade and services.
Rama Devi, founder of the ALEAP, says that things were fine until 2009 for members of the association. “Even during the recession our members managed to get new orders, but things are completely changed now.” The association members had been clocking a combined turnover of Rs 200-250 crore, but are now doing barely 25 per cent of this figure, says Rama Devi. One of the members, who has been catering to the IT/ITeS industry, earlier did business worth Rs 8 crore. “Now, we don’t even do business worth one crore rupees,” she says.
“The Telegana crisis, power cuts and increase in input costs have really hit us,” said representatives of the association.
Entrepreneurs are facing a two-day power holiday in a week and to avoid peak-hour cuts, they are now working from 6 am to 5 p m. “We are negotiating with bankers to give interest-free loans or concessional loans to set up a captive power plant,” said Rama Devi.
Besides power, labour and finance costs have also gone up by 20 per cent and entrepreneurs are not able to pass this on to customers, she said. The worst-hit are garment manufacturers, she added.
“The government has opened up garment imports. While our products are of good quality, we are not able to match the price of Bangladesh and other competitors,” says Vijayashanthi, a garment manufacturer from an industrial estate.
The ALEAP in Andhra Pradesh has over 70 acres of land across Andhra Pradesh dedicated to more than 70 independent industrial units, including a multi-product industrial cluster in Vijayawada. Impressed with the success of the units in these industrial clusters since 2009, businesses from Bangladesh, Sri Lanka and South Africa had expressed interest in setting up a garment park in one estate.
“However, now they are seeing the state as a red zone,” said Rama Devi. “Some state governments, including Gujarat, have invited us to set up industrial estates, and we are now considering it,” she added.
She said ALEAP had found training to be one of the biggest challenges. It therefore established the Entrepreneur Development Institute for Women. The association also partnered with Germany-based Ignite, which offers capacity building training to women entrepreneurs.
“We designed an entrepreneurial development programme. Our simple strategy of successful entrepreneurs mentoring an early-stage or a budding entrepreneur (especially uneducated women), helped us minimise risks,” she said. The other challenge faced by women entrepreneurs was finance. To address this problem, the ALEAP in Andhra Pradesh Credit Guarantee facility, wherein the association becomes a guarantor to the borrower, was introduced.
We refer to CBEC circular no.