Date:07/03/2006 URL: http://www.thehindubusinessline.com/2006/03/07/stories/2006030702941900.htm

Back AP bid to attract FDI bears fruit

Our Bureau

Govt on relentless drive to attract big foreign cos

Attractive destination
The Andhra Pradesh Government in its Economic Survey 2005-06, presented in the ongoing Budget session of the Assembly, stated that the State has emerged as an attractive destination mostly for FDI.

Hyderabad , March 6

The Andhra Pradesh Government has been on a relentless exercise to attract big foreign companies, such as Volswagen and Intel, to set up manufacturing facilities in the State.

The State has conducted road-shows globally and presented its case and the sops it could offer to several visiting corporate honchos over the years. Scores of memoranda of understandinghave also been signed.

Interestingly, while there seems to be no dearth of promises as per the State Government versions, the official Central Government figure on the actual number of foreign companies which have established their businesses in Andhra Pradesh has in fact come down.

According to the Union Ministry of Company Affairs, the number of foreign companies which established their places of business in Andhra Pradesh was just two during 2004-05. This is in comparison to six during 2003-04 and 2002-03. The names of the firms were, however, not mentioned by the Ministry.

On the quantum of foreign direct investments (FDI)that has come to the State, the scenario is definitely better. During 2004-05, the State attracted a total of Rs 735.02 crore. Of this, the bulk (Rs 676.86 crore) was through the automatic route, the remaining Rs 58.16 crore was through the Foreign Investment Promotion Board.

The Ministry' response in the Rajya Sabha last week also said that the FDI inflows during the two previous fiscal were Rs 353.90 crore (2003-04) and Rs 382.64 crore (2002-03).

The Andhra Pradesh Government in its Economic Survey 2005-06, presented in the ongoing Budget session of the Assembly, stated that the State has emerged as an attractive destination mostly for FDI. Liberal policies and availability of good infrastructure are attracting giants in information technology, agro-food processing, engineering and infrastructure-based industries. The State has received 1,051 proposals with a foreign equity of Rs 14,439 crore as on October 31, 2005. Out of this, 308 proposals were grounded with foreign equity of Rs 4,215 crore.