Background:
The Telangana Assembly unanimously passed its own industrial Act–Telangana State Industrial Project Approval and Self Certification System (TS-iPASS) Act, 2014 repealing the existing Andhra Pradesh State Industrial Single Window Clearance Act of 2002, with the objective of providing timely clearances to industrial units proposed to be set up in the new State.
Purpose:
- To speed up the processing for issue of various licenses, clearances and certificates required by industries and also provide for an investor-friendly environment in the State.
- Facilitate industrial growth
- To create peaceful, secure and progressive business regulatory environment
- Massive creation of jobs
- To mitigate the potential impacts and protect the environment
- Minimum Inspection and Maximum Facilitation.
Classification of Projects:
- Mega Projects : Investment of above Rs. 200 crores in plant and machinery or providing employment to more than 1000 persons
- Other Large Projects: Investment between Rs 10 to 200 crores in plant and machinery.
- Medium Industries: Investment between Rs 5 and 10 crores in plant and machinery
- Small Industries: Investment between Rs 25 lakhs to Rs 5 crores in plant and machinery
- Micro Enterprises: Investment of less than Rs 25 lakhs in plant and machinery.
Thrust Areas and Core Sectors
| Sl. No. | THRUST AREAS | AREAS OF SCOPE |
| 1 | Life Sciences—including bulk drugs, formulations, vaccines, nutraceuticals, biologicals, incubation centers, R&D facilities and medical equipment. | Hyderabad has been the bulk drug and vaccine capital of the country.
However, the Government opines that, in the past 8-10 years the sector has stagnated. While the leadership in formulations and bulk drugs has always been and has to be maintained, new opportunities like life-saving drugs, new vaccines and biologicals have to be encouraged. |
| 2 | IT Hardware including bio-medical devices, electronics, cellular communications, FAB | Hyderabad always had a robust IT Software sector which will complement IT Hardware.
In this regard, the Government of India has also approved an IT Investment Region for Hyderabad as well as two Electronic Manufacturing Clusters. The large health industry in Telangana will also support bio-medical devices and medical electronics. |
| 3 | Precision Engineering, including aviation, aerospace, defence | Hyderabad has been a home to a large number of defence aero-space and defence research laboratories like DRDO, DRDL, RCI, BDL, MDN, Ordnance Factory, DMRL etc.
In addition to the 5 large investments by Tatas in aerospace, there is also the GMR MRO. A group of innovative aero-space SMEs also exist in Hyderabad which have supplied components to the Chandrayan and Mangalyan initiatives. GOI has also announced 49% FDI in defence sector creating huge investment opportunities. |
| 4 | Food processing and nutrition products including dairy, poultry, meat and fisheries. | Telangana is a large producer of agro products like cereals, pulses, oilseeds, fruits and spices. It is also the market leader in the poultry and seed business.
Government considers that there is potential expand into greenhouse and exotic vegetable cultivation. |
| 5 | Automobiles, Transport Vehicles, Auto-components, Tractors and Farm Equipment | It is considered that by facilitating the Automobile Industry, the upstream and downstream supplier opportunities will boost the engineering SME sector also.
Moreover, the M&M tractor plant in Telangana and the auto-component SMEs will be the anchor around which the future growth and investments in the automobile sector are expected to emerge. |
| 6 | Textiles and Apparel, Leather and leather value added products like shoes, purses, bags, artificial material infused and coated textiles, paper and paper products | Telangana is a large producer of long staple cotton. It also is one of the largest producers of raw hide.
However, due to lack of value added production within the State, the raw material is exported from the State to other manufacturing facilities. Further, the State also has a strong base of paper industry. There is tremendous potential for paper and paper products industry in the state due to the growing demand. |
| 7 | Plastics and Polymers, Chemicals and Petro-chemical, glass and ceramics | The Government has considered that the Plastics, polymers and downstream petro-chemical industry are predominantly in the MSME sector with huge employment potential.
As the products of this sector are consumed on a daily basis all over the country. This sector is critical for a large number of MSMEs and in this regard, the Government has also taken initiatives to encourage MSMEs in these sector. |
| 8 | FMCG and Domestic Appliances | Considering the growth rates of the Fast Moving Consumer Goods and Domestic Appliances sector has been phenomenal, even when the country’s economy was slow.
Further, Telangana being centrally located in India and as for the FMCG and Domestic appliances sectors, transportation costs being very critical, Government is aspiring to its location to its advantage by encouraging Investors in this Sector. |
| 9 | Engineering and Capital Goods, including castings, foundry and Ferroalloys and other metallurgical industries | This sector is being considered very important if the State has to capture the entire value chain of the automobile, aero-space, petro-chemicals, domestic appliances, and paper and textile sectors.
The thrust areas in this section will provide the supply chain to the other thrust area sectors. |
| 10 | Gems and Jewellery | Hyderabadi pearls and lacquer bangles made by local artisans are known all over the world.
The Government is trying to encourage this at large scale by creating Value addition to these traditional products and their diversification into other gems and jewellery items, providing the much needed relief to local artisans and craftsmen. |
| 11 | Waste Management and Green Technologies | The Telangana State having the functional models of SPV/JV efforts of waste management. It is considered that this sector has tremendous growth potential. |
| 12 | Renewable Energy and Solar Parks | This sector is a priority all over the world. The State of Telangana has large extents of land eminently suitable for non-conventional and renewable energy installations. |
| 13 | Mineral-based and wood-based Industries | It is considered that, much of the minor mineral wealth of the State like granite, quartz and silica-sand is being exported in raw form with minimal processing within the State.
Similarly, bamboo and other MDF-suitable plant material also considered to be exploited so that sustainable incomes are generated and the regular the forests trees can be saved. |
| 14 | Transportation/Logistic Hub/Inland Port/Container Depot | The State of Telangana is land locked; yet it hopes to become a major destination for international investors. In addition it is centrally located and has the potential to become a major transit and logistic hub. |
Conclusion:
The new Industrial Policy brought out by the Government of Telangana promises to revolutionize the way industrial sector has been viewed by successive governments in this country. A day is not far when the new Industrial Policy of Telangana will shine as an exemplar among the best in the world. “Innovate in Telangana, Invest in Telangana, Incorporate in Telangana” will become the motto of industrialization in the new state. It is strongly believed that with the new Industrial Policy in place, a growth rate of 4-5% greater than the national growth rate in the Manufacturing Sector can be achieved.
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