Hyderabad: Churning the wheels of growth
Jun 14, 2014
Source : The Times of India


HYDERABAD: A few days ago when Hyderabad city had a black out for few hours, the segment which suffered the most were the manufacturing units, which are totally dependent on power supply. Land, power and water are the three vital factors for an industrial area. Due to its huge tracks of land and scope of expansion, Hyderabad is one of the suitable options for setting up manufacturing business. However, from past few years the heavy industries are seen settling down more in Maharashtra, Chennai or Gujarat.

Manufacturing activities can directly affect the demand and prices of real-estate in the city. The land on the outskirts of a city is best suited for the manufacturing and industrial work. Some of the industrial areas of Hyderabad are Cherlapally, Mallapur, Balanagar, Patancheru, Nacharam, etc. Chalapathi Rao, executive vice president, Andhra Pradesh Real Estate Developers’ Association, says, “During the past few years the manufacturing sector suffered a lot due to the unnecessary agitation and uncertainty of political issues. In Hyderabad, the service sector attracts more investment than the manufacturing sector. IT sector requires a certain environment and the cosmopolitan environment of Hyderabad attracts the IT companies.“

However we still have a chance to revive the market and attract the industries towards the favourable side of the state. Jayesh Ranjan, vice chairman and managing director, Andhra Pradesh Industrial Infrastructure Corporation Ltd, says, “While the composite state of Andhra Pradesh had a robust mechanism of single window, there were many gaps in its implementation. The ideal model would be like that of Singapore in which once an investment proposal is accepted by the government, it then becomes the government’s responsibility to obtain all required permissions and clearances. No other state in India has anything similar to this model, and if Telangana state can institutionalise such an arrangement, the state can very rapidly become the most investor-friendly state in the country.“

The capital of the state, Hyderabad enjoys an advantage of having a presence in the global market. It is also gearing up for the influx of huge investments from national and the international players. Hyderabad and its suburbs have the highest number of special economic zones (SEZs) among Indian cities.

Cherlapally is one of the biggest industrial areas and has around five industrial phases with more than 1000 industries. Cherlapally Small Industries Association is also one of the oldest associations in the city and has around 125 industries registered under it, varying from pharma, telecom, engineering, food processing, furniture etc. RJ Mohan Rao, president, phase 1, Cherlapally Small Industries Association, says, “Being on the manual mode, the small scale industries provides ten times more employment than the bigger ones, but we hardly get the benefits of it. The availability of good land for industrialisation has gone down drastically. The lands seized by banks or the sick lands, or the second sale are available in more quantity. The industrial land for fresh entrepreneurs or realtors in the industrial estates is limited.“

Real estate development is directly proportional to the growth of industries in a city and can help in reviving the growth. We need to recreate the infrastructure for a better industrial outlook. The roads should have better connectivity, building more number of bridges can cut down on traffic and highways connecting various states can help transport goods in a faster manner. S Chidambaranathan, managing director, Sigachi Industries, says, “Due to most of the prohibitive lands, the cost of land in industrial areas is going as high as Rs 1 crore per acre. Around 25-30 per cent of the turnover goes in paying taxes of the state. The government is the major stakeholder in industrial revenue, so the government should make sure there is smooth functioning of industries.“

The heavy manufacturing industries not only bring investment for a state but also generate employment opportunities and give birth to small scale businesses.
“If the heavy automobile industries come to Hyderabad, it will automatically attract the ancillary units manufacturing industries,“ adds RJ Mohan Rao. An investor-friendly approach can definitely help in getting back the investments, but the support of infrastructure and real-estate will play a crucial role in determining the status of Telangana on the global map.

Veera Babu, head, Cushman & Wakefield, emphasises the need of proper structural planning. He says, “Hyderabad can support heavy industries to a certain extent in some pockets at this stage but we will soon be running into problems if we don’t think about the right kind of infrastructure which is still in the planning stages. We have established industrial clusters at the Pantanheru Pashamilaram belt, Medchal, Uppal, Nacharam, Katedan and Jeedimetla etc, but they are caught up with some difficulties related to infrastructure such as non availability of adequate water and uninterrupted/ample power supply and there is a need to address these issues. Unfortunately, some of the existing industrial areas are also surrounded by dense residential locations that compete for essential services thereby putting a pressure on infrastructure. We should adopt the concept of fully serviced industrial clusters and bring in better industrial promotion policy to attract the manufacturing sector.“

The demand for power has shot up in the past few years due the increasing concentration of new offices, companies and residential housing all over the city. There is a huge power deficit. Chalapathi Rao has a solution, “In the case of deficit, the Telangana Government can always buy power and water from the pockets with surplus amount. Another option is produce energy through unconventional energy resources. This will take time, but once it picks up pace it can help the industries in a big way. The wind and solar power project in some of the other states have proved to be very successful.“

“We need to bring in some industry-friendly initiatives for the holistic development. There is a need to create satellite townships for the industrial areas. Maintenance of industries and chalking out a plan for residential living in these areas will also help revive the status. The ORR service road should be made accessible to the industrial areas for a smoother connectivity and mobility of goods,“ concludes S Chidambaranathan.

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