State Business Relations and Performance of Manufacturing Sector in Andhra Pradesh

G. Alivelu, K. Srinivasulu, M. Gopinath Reddy
JEL codes: 
Working Paper No. 82

In this paper, we make an attempt to enquire into the politics of the government and business relation and how it affected the industrial development in general and expansion of manufacturing sector in particular in the state of Andhra Pradesh. In AP State Business Relations (SBR) have evolved gradually under different political regimes – from ‘indifferent’ SBR’s during initial decades, passing through critical junctures in the form of ‘active’ and ‘pro-active’ phases and finally SBRs reaching its zenith during Chandrababu Naidu regime and there after continuing in the Congress regime. The SBRs in AP seen evolving through different political regimes and their impact on the performance of manufacturing sector is captured through both qualitative and quantitative sources. Examination of the secondary data reveals the dominance of registered manufacturing in the total manufacturing output of the state. Firm level perceptions reveal that the business associations play a major role in dissemination of information rather than lobbying the government. The small firms are at a disadvantage compared to large and
medium firms.