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Finance Commission holds Meeting with Trade Associations and Industry Bodies of Telangana - 18th February 2019
The 15th Finance Commission had a detailed meeting with the Trade Associations and Industry Bodies of the Telangana state. Representatives of ETAPCCI, CII, TIF, and others were present. The Commission noted that the tertiary sector is the largest contributor to GSVA (current prices) of Telangana - IT and ITeS units have been key drivers . Telangana State’s share is over 10 per cent of the country’s IT exports. ii) Share of secondary sector in GSVA (current prices)of Telangana is lowest amongst all southern states. Sector Telangana Andhra Pradesh Tamil Nadu Karnataka Kerala* Primary 17.54 37.01 13.07 11.64 13.06 Secondary 18.66 19.44 33.57 22.08 24.35 Tertiary 63.80 43.55 53.36 66.27 62.59 Note: Data pertains to 2017-18 for all States except Kerala (for which 2016-17 data used). iii) Manufacturing sector in the state majorly comprises pharmaceutical industry, non-metallic mineral products such as cements, granite etc., electrical equipment & food processing industry. iv) Telangana was ranked second in Ease of Doing Business (EoDB) Rankings, 2018 with a score of 98.28, trailing by just 0.02 percentage points from Andhra Pradesh, which was ranked first. As per the State’s Memorandum, the impact of Goods and Service Tax (GST) in the sector has been as follows: i) Increase in number of dealers in the post-GST regime works out to 37.4, due to efforts of State. ii) Except in the initial months, the State has not received any GST compensation. The growth rate of GST revenue for State of Telangana was 20 against 14.7 for Andhra Pradesh from April to Dec., 2018 over the same period last year. The Commission further noted that: i) A Legislation giving statutory status to the new industrial policy called the “Telangana State Industrial Project Approval and Self-Certification System” (TS-iPASS) was enacted. Under this legislation, a right to Single Window Clearance has been bestowed on all applicants. ii) Telangana Industrial Health Clinic Ltd (TIHCL) has been set up to revive the sick small and medium scale industrial units. iii) T-HUB was launched in 2015, with mission to catalyze the creation of one of the brightest and most vibrant entrepreneurial community in the world in order to encourage start-ups. iv) The Government has fast tracked development of Kakatiya Integrated Mega Textile Park (biggest Textile Park in the country) in Warangal (Rural) District which is spread over an area of 2000 acres. V) The Commission was very appreciative of the state governments initiatives for skill development through its project TASK. The meeting discussed the State’s need to provide enhanced impetus to development of manufacturing sector, which, in turn, would reduce its overdependence on IT / ITeS sector, thereby, reducing concentration risk to growth. The meeting also discussed that out of 31 districts in the State, there are only 4 districts (Rangareddy, Hyderabad, Medchal-Malkajgiri, Sangareddy) whose per capita income (PCY) is above the State’s average PCY. These districts are the ones where the industry and service sector activities are concentrated, thereby leaving large areas of under-development in the State.