AP brings policy to promote private investments in industrial parks

Policy offers land and fiscal incentives to developers while treating these investments on a par with capital investments of industrial sector

In a first-of-its-kind move, the Andhra Pradesh government has set the stage to facilitate private investments in the development of new industrial parks through a separate policy. The policy offers land and fiscal incentives to the developers while treating these investments on a par with capital investments of the industrial sector.

Though a few large private industrial parks were developed in the past under the previous dispensations in the undivided AP, there has been no policy guiding the establishment of such private industrial parks so far.

Under the state government’s ‘Industrial Parks Policy 2015-20’, land will be given on a 99-year lease to an industrial park, which would be treated as a public private (PPP) project as the Andhra Pradesh Industrial Infrastructure Corporation (APIIC), the government’s nodal agency, will have a stake in the project in exchange for land.

The private developer of each PPP mode industrial park will be selected through ‘Swiss Challenge’, a kind of reverse bidding method for which the government fixes a separate criteria. The government also facilitates setting up of industrial parks on private land by providing common infrastructure at the same terms as provided to industrial parks set up in APIIC areas under this policy.

“This is the first time that the state government is coming up with a policy on industrial parks involving private investments,” a senior government official, who was involved with the industrial policy issues in the past, told Business Standard.

Rs 200 crore minimum investment

For this policy to be applicable, the investment in the proposed industrial park should be a minimum of Rs 200 crore or its equivalent in foreign currency. The said industrial park should have a minium 100 acres, having a minimum of 10 industrial/service units with no single unit occupying more than 40 per cent of the total allocable area for industrial use.

The policy also allows a residential and commercial zone in each park not exceeding 33 per cent of the total developed land and should cater to the industrial units and local area needs while 33 per cent of total land area is earmarked for green cover and water conservation.



The eligible fixed capital investment, which will be incentivised by the government, includes payment towards land, construction of buildings and other common infrastructure developed within the park, according to the policy.

“For sector-specific industrial parks, incentives from applicable sector-specific policies of both state and central governments may be made available,” the government said in the policy document.

Any industrial association, industrial house or institution registered under the Societies Registration Act, Indian Partnership Act, Limited Liability Partnership Act or Companies Act will qualify as a private developer for bidding these projects, the government said.