19 July 2018

1. Unexpected! Andhra Pradesh tops Ease of Doing Business ranking among all states once again

The commercial property has 2.7 million sq ft of leasable space and is 99.4% occupied. Amazon India, World Bank, HSBC and BNP Paribas are some key tenants to have leased space in the property

(Source: Financial Express, 10 July, 2018)

Research View

The latest edition of the annual ease of doing business rankings published by the Union ministry of Commerce and Industry has pronounced Andhra Pradesh (AP) and Telangana ahead of other states and seven union territories. In our opinion, post-bifurcation AP and Telangana in 2014, both states are going through an excellent phase in economic growth, thus attracting huge investments with supportive government policies, fast track single window clearances for development projects, and continuous infrastructure improvements. We expect the technology and electronics sector to be the key drivers of growth in AP in coming years. The recent CII Partnership Summit 2018 in AP saw a high-level of interest from potential investors in the sectors. As per media sources, more than 75 MoUs have been signed with committed investment of INR 30,058 crore (USD 4.3 billion) in the state and expected employment of 131,748 people. The AP government is proactive in addressing the changing business needs and providing an enabling environment for start-ups in the state. Haryana secured 3rd position followed by Jharkhand and Gujarat on fourth and fifth position, respectively. The other states in the top achievers' category are Chhattisgarh, Madhya Pradesh, Karnataka and Rajasthan. The big industrialised states of Maharashtra and Tamil Nadu are ranked 13th and 15th, respectively, while Delhi is at the 23rd position. In our opinion, the primary motive behind these rankings is to trigger healthy competition amongst the states to reform their existing industry policies and making their state business-friendly. A better environment for businesses and industries have always given an upward push to the disposable economy income of the citizens. A wholesome commerce ecosystem should attract more foreign Investment and boost the economy of the country.

2. Samsung puts NOIDA on top with world's biggest mobile factory

The new 35-acre Samsung's facility at Sector 81 in Noida, Uttar Pradesh, will be inaugurated by PM Modi and South Korean President Moon.

(Source: ETCIO, 09 July, 2018)

Research View

The South Korean electronics giant Samsung has opened the world’s biggest cellular phone manufacturing unit spanning over an area of 35 acres (0.05 sq miles) in NOIDA. The manufacturing unit will double Samsung’s annual handset production capacity to 120 million units by 2020, from the current 60 million units. According to the Indian Cellular Association (ICA), India is already the second largest producer of mobile phones in the world. NOIDA produces a significant portion of the cellular mobiles in India, companies like Samsung, LG, Huawei, Xaomi, Nokia are already making or assembling mobile components in the NOIDA Expressway corridor. This will also increase the interest from other ancillary manufacturers, who may want to set up their offices in the vicinity of the electronic major. Besides this, the abundant Grade A commercial supply of 13 million sq ft (1.2 million sq m) supports the increasing demand. We foresee NOIDA-Greater NOIDA Expressway, being the hub of mobile manufacturing companies pushed by big-ticket investments by Samsung, Vivo and others in the region. The Jewar Airport will also play an essential role in connecting this manufacturing-hub corridor via domestic as well as international destinations. The Uttar Pradesh Government estimates that this Airport will be connected with 37 domestic and 31 international destinations by 2050.

3. Controversial elevated corridor project makes way into the Karnataka budget

The Karnataka budget has announced a mega project of a network of six inter-connected elevated corridors in the next four years at a cost of ₹15,285 crore, under hybrid annuity to provide good transport communication in Bengaluru city.

(Source: The Hindu, 05 July, 2018)

Research View

Karnataka State Budget 2018 announced by Karnataka coalition government emphasises on loan waiver for farmers, ‘Compete with China Scheme’, an increase in tax rates on petrol and diesel to augment state resources and infrastructure improvement. The ‘Compete with China’ scheme envisages setting up a ‘Program Mission Unit’ under the leadership of successful entrepreneurs, where spare parts would be manufactured at the village level, assembled at taluk level, and malls would be opened to market them. With an outlay of INR 14,000 crore (USD 2 billion), the project is expected to generate employment opportunities, boost the small and medium scale industries, and provide an impetus to the overall commercial development in the state. To address the primary concern of traffic congestion in Bengaluru, six elevated corridors received an outlay of INR 15,825 crore (USD 2.3 billion). These elevated corridors are proposed to connect Hebbal to Silk Board (North-South), K.R. Puram to Gorguntepalya (East-West), Jnana Bharti to Varthur Kodi, Kalasipalyam to Agara, Richmond to Halasuru and Kalyan Nagar to St. John’s Church Road. The budget outlines a timeline of four years for the completion of the project through hybrid annuity by Karnataka Road Development Corporation (KRDCL). As part of the Namma Metro project, the budget addresses the 95 km Phase III, but misses the mention of the most anticipated Outer Ring Road metro corridor, which is expected to benefit more than 1 million employees, working in this commercial hub of Bengaluru. The budget declares the work on the 116 km Peripheral Ring Road (PRR) proposed to connect Hosur Road to Tumkur Road, to be undertaken by a Special Purpose Vehicle (SPV), which is in the process of accumulating funds to the tune of INR 11,950 crore (USD 1.7 billion). This proposal is to be undertaken in two phases and is intended to decongest traffic in the city.

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