AP minister says state government ‘pays a fine’ to get Kia plant

The Andhra Pradesh government was “paying a fine” for getting Kia Motors to establish its car manufacturing plant in the state through incentives guaranteed by the previous government, Industries Minister Mekapati Goutham Reddy said on Monday.

Addressing a press conference here, he said that the incumbent government was bound to fulfill obligations, “like it or not,” for the next 20 years. “Kia’s investment … is certainly a very good investment and I congratulate the (former TDP) government for getting it. But we also have to pay a penalty for getting it … by way of incentives,” Goutham Reddy said. . “If that was the government’s call then … that we achieve the company strategically … as a government I have to fulfill that obligation as well. Like it or not, but I have to fulfill the obligations. The next 20 years I have to pay them. ”, Said the Minister of Industries.

The then government of N Chandrababu Naidu signed an agreement with Kia Motors, offering a series of incentives to establish its car manufacturing plant in Erramanchi in the backward Anantapuramu district with a capacity of three lakh units per year.

(Also read: With SUVs in focus, Kia Motors will invest an additional $ 54 million in the Andhra plant)

The state government spent more ₹450 million rupees in land and infrastructure development (roads, electricity, water supply, plus other facilities, for the plant. Various tax incentives and electricity rate concessions were also offered for 20 years.

Goutham Reddy made the remarks while discussing investments coming into the state and Ease of Doing Business rankings, as the state held its top position for the third year in a row. “The ease of doing business is different from the investments that come. The investments come, for one, strategic reasons,” he said. EoDB applied to Micro, Small and Medium Enterprises, what it called “the weakest sectors of the industrials”. “Whether industrial policies drive them or not. Whether or not they are paid government incentives. What is our reaction time to meet their requirements, how transparent is our system? … that’s the approach.” , said.

(Also read: Apollo Tires orders a new facility in Andhra Pradesh, to invest ₹3,800 cr)

The YSR congressional government, from the beginning, has focused on MSMEs and addressed their problems as “they are the biggest employers and creators of wealth,” added the minister.

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