Hyderabad, Oct 17 (IANS): Industry lobby Assocham has suggested that the Andhra Pradesh and central governments to constitute a rehabilitation team to support industry in cyclone-hit north coastal Andhra.

Expressing the apprehension that the massive damages suffered by both large and small firms in Visakhapatnam, Srikakulam and Vijayanagaram districts could lead to industrial sickness, it urged both the government to make joint efforts to bring back industrial activity on the path of normalcy.

Assocham's secretary general D.S. Rawat in this regard submitted a paper to Andhra Pradesh Chief Minister N. Chandrababu Naidu.

Referring to Andhra Pradesh Re-organisation Act, 2014, which promises special category status to residual state of Andhra Pradesh for five years and a special development package for backward regions, Rawat called for treating investments in the affected areas as new.

He said the industries in affected region must be made eligible to claim fiscal incentives like exemption of debt servicing for at least six months, exemption from sales tax, stamps duty and registration charges, customs duty on imports, central excise duty on goods procured, reimbursement of central sales tax paid on domestic purchase, 100 percent income tax exemption for 5 years, exemption from payment of VAT, exemption from payment of royalties and cess on construction materials.

Assocham noted that micro, small and medium enterprises play a dominant role in the three cyclone affected districts. Visakhapatnam district has been a vibrant hub of MSME activity. "The MSME sector has thrived there due to the presence of key large industries in the area apart from those representing the traditional economic base," the paper said.

It pointed out that north coastal Andhra has 1.06 lakh MSME units with an investment of Rs.16,912 crore, providing employment to 11.65 lakh people. The region also has 1,727 large and mega industries with an investment of nearly Rs.77,000 crore and employment to 4.14 lakh people.

Assocham also urged the state government to exempt agriculture and allied products from Agriculture Produce Marketing Committee (APMC) Act so that farmers can sell their produce without paying any fees.