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AP small scale suppliers to govt depts uncertain about orders after bifurcation

Hyderabad, Apr 23 (KNN)  The industries, traders and small scale suppliers to the government departments in Andhra Pradesh are in for tough times as the state is heading for bifurcation.

For instance, the Andhra Pradesh Medical Services and Infrastructure Development Corporation (APMSIDC) wants suppliers to register for any pending claims for supplied quantities to APMSIDC) from the year 2009 to March 2014 before May-5.

“Otherwise the claims will be treated as no claim and the claim will abate.  Claims after specified date will not be entertained,” an official notice said.

The notice comes in adherence to the State Reorganisation Act-2014 – Bifurcation of 2 States Andhra and Telangana clearing of pending liabilities.

Likewise there are issues relating to the Central Sales Tax (CST) which is likely to increase business cost in both Andhra and Telangana.

After bifurcation, sales and purchase transactions between traders in Andhra and Telangana would be subjected to CST. This has already caused concern in the industry which has approached the state government to urge the central government to defer the levy of CST or reduce the rate on movement of goods within the two states.

There appears to be considerable uncertainty in the pharma industry of the state.  Industry experts fear that the bifurcation may delay plans of expansion, new projects, investment opportunities, etc as confusion still prevails over where to invest in the long run.

According to the Foundation for MSME Clusters (FMC), a not-for-profit registered trust conceived at the suggestion of the Ministry of Small and Medium Enterprises (MSME), industry is deferring from taking any strategic decisions within the state, bringing almost all the business propositions and initiatives into a temporary standstill.

All their measures with the government aimed to get financial assistance to the SMEs have suffered, reports have said due to the chaotic situation prevailing in the government offices.

Also, the industry is said to be in doldrums over setting up or shifting their base, due to lack of clarity from the government of the incentives and support for the industry.
The report also said that the MSME cluster which will fall under the newly formed 29th state of the country, Telengana has a lot of pharma units.  Hence there is a considerable uncertainty in the industry over whether to shift their base to coastal Andhra due to the 10-year tax holidays promised by the government.

Many companies across sectors have either postponed or completely shelved their projects in the state for the time being.

Other issues that are likely to become bone of contention going forward are sharing of water, power and taxes.

However, according to reports, certain industry chiefs believe that bifurcation will be good for both the regions.  While Telangana will benefit from right valuation of physical assets owing to political stability, Seemandhra will get the much needed push in development through new infrastructure.