Editorial illustration about ANIIDCO's commercial activities, government revenue and public benefit in Andaman and Nicobar.

Sri Vijaya Puram | August 26, 2026

The Andaman & Nicobar Islands has a unique economic challenge. Its geography makes many essential services expensive to provide, while its small and scattered population can make several commercial activities difficult for private companies to operate profitably.

That is one reason government intervention remains necessary.

But there is another side to the question.

The Andaman & Nicobar Islands Integrated Development Corporation Limited (ANIIDCO) is a government-owned corporation that does not merely perform administrative functions. Its stated objective includes developing and commercially exploiting the natural resources of the territory for balanced and environmentally friendly development.

This raises an important public-policy question:

When a government corporation participates in commercial activities and generates revenue, where is that commercial role justified—and how should Islanders benefit from it?

ANIIDCO Was Created for Development, Not Simply Revenue Collection

ANIIDCO was incorporated in 1988, with a mandate covering infrastructure and development in sectors including tourism, fisheries and industries, as well as financial assistance to industrial and service units.

It would therefore be inaccurate to describe ANIIDCO simply as a mechanism created to collect money from Islanders.

Its stated purpose is broader.

A government corporation can intervene where private investment is inadequate, develop infrastructure, support local industries, serve remote communities and undertake projects that may have wider economic benefits.

The question is therefore not whether such a corporation should exist.

The question is how its commercial role should be measured and justified.

Milk: Revenue and Public Welfare Can Coexist

ANIIDCO's dairy operations provide one example.

The corporation collects raw milk from farmers in South Andaman, Shaheed Dweep and North & Middle Andaman and sells products including toned milk, paneer and curd in the local market.

The Administration has previously reported that when ANIIDCO increased the procurement price paid to farmers, milk procurement increased substantially and farmers' monthly income also rose.

This is the kind of government commercial intervention that can have a defensible public purpose.

The government is not merely selling milk.

It can potentially provide farmers with an assured market, strengthen local production and improve availability for consumers.

So the relevant question is not:

“Why is the government selling milk?”

It is:

“Is the government's involvement producing a measurable benefit for farmers and consumers, and is that benefit worth the public resources involved?”

Petroleum Shows Another Reason for Government Participation

ANIIDCO also operates petroleum retail outlets.

When the Administration established outlets at Baratang and Uttara, it stated that the objective was to ensure availability of an essential service to people in remote areas and reduce difficulties faced by residents and commuters.

The two outlets brought ANIIDCO's petroleum retail/depot network to 13 at the time.

This illustrates why government participation in a commercial market cannot automatically be labelled inappropriate.

If a private operator does not find a remote location commercially attractive, government intervention may be necessary.

The government can therefore have two different roles:

Commercial operator where the market fails.

Regulator where the market works.

The challenge is knowing which role is appropriate in each sector.

Liquor Raises a Different Question

Liquor provides a more direct example of government participation in a revenue-generating commercial market.

ANIIDCO operates IMFL outlets, and a 2026 government e-procurement listing confirms an ANIIDCO–IMFL organisational chain.

An RTI-based report published in 2024 stated that ANIIDCO's IMFL stores recorded combined gross sales of more than ₹181 crore during calendar year 2023.

That figure should not be confused with profit or net government revenue.

Sales turnover is not the same as profit.

Nevertheless, it demonstrates the scale at which a government corporation can participate in a commercial consumer market.

This leads to a legitimate accountability question:

If a government corporation has the organisational capacity to operate a large commercial distribution network, how should the returns from that activity be accounted for, and what public purpose should they ultimately serve?

That is a question of accountability—not an allegation of wrongdoing.

Tourism Is Another Major Area

ANIIDCO has historically been involved in tourism infrastructure and hospitality.

Government records describe its role in tourism development, including the operation and expansion of resorts.

ANIIDCO also appears as the tendering authority for major tourism projects. For example, a 2026 government tender for a five-star eco-tourism resort at Smith Island was issued through ANIIDCO on a PPP basis.

Government participation in tourism can have a legitimate development rationale.

Tourism infrastructure can create employment, attract investment and expand opportunities outside already-developed tourist centres.

But the same principle applies:

Public involvement should produce a demonstrable public benefit.

So Where Does the Revenue Go?

This is where the debate should become more serious.

When a government corporation generates commercial turnover, citizens deserve to understand the difference between:

A ₹100-crore turnover does not mean the government earned ₹100 crore.

Likewise, a government corporation making a loss does not automatically mean an activity has failed if it is deliberately providing an essential service to remote communities.

The correct assessment requires looking at the complete financial and public-service picture.

ANIIDCO's annual accounts are subject to statutory reporting and have been laid before Parliament along with the Auditor's Report and CAG comments, providing an established mechanism for financial scrutiny.

That is precisely the mechanism through which citizens and legislators should examine whether commercial activities are delivering value.

Revenue Generation Should Not Become the Only Objective

There is nothing inherently wrong with a government corporation earning revenue.

If a public corporation can provide a useful service, support local producers and generate income without imposing an unnecessary burden on taxpayers, that can be a positive outcome.

But a government corporation is not a private company.

Its success should therefore not be judged solely by:

“How much money did it make?”

It should also be judged by:

“What public problem did it solve?”

Did it support local farmers?

Did it make essential commodities available in remote areas?

Did it attract investment?

Did it create employment?

Did it improve tourism infrastructure?

Did it serve communities where private operators would not?

And, most importantly:

Could the same public objective have been achieved more efficiently?

This Is Where Essential Services Enter the Debate

The Andaman & Nicobar Islands still requires substantial public investment in healthcare, drinking water, electricity, education, transport, telecommunications, roads, disaster preparedness and inter-island connectivity.

These are fundamentally different from ordinary commercial markets.

A resident can choose whether to buy a particular brand of milk.

A person cannot choose whether an emergency hospital exists when they need one.

A tourist can decide whether to stay at one resort or another.

A remote resident cannot simply choose an alternative electricity network if there is only one available.

A customer can decide whether to purchase a commercial product.

A child cannot postpone education indefinitely because providing a school in a remote settlement is expensive.

That is the fundamental difference between commercial choice and public necessity.

The question is therefore not:

“Why is ANIIDCO making money?”

The better question is:

“What is the government doing with its capacity to make money, and is that capacity being matched by its responsibility to provide essential public services?”

ANIIDCO's commercial activities can be justified when they address market failures, support local producers, provide essential supplies to remote areas or advance broader development objectives.

But those justifications should be transparent.

Every major commercial activity should have a clear public purpose, measurable outcomes and financial accountability.

And where an activity exists primarily for revenue generation, citizens have a legitimate right to ask why the government is the appropriate operator and what benefit Islanders receive from it.

The Standard Should Be Simple

The government does not need to withdraw from every commercial activity.

Nor does every government corporation have to operate at a profit.

But public money and public institutions should be directed according to public priorities.

If government intervention makes milk available while increasing farmers' income, that is a measurable public benefit.

If government-operated petroleum outlets ensure supplies in remote areas where private business may not serve, that is a measurable public benefit.

If tourism projects create sustainable employment and investment, that benefit should be measurable.

If a commercial activity generates substantial revenue, its financial performance should be transparent.

And if the government is spending or investing public resources, Islanders should be able to see the cost, return and public benefit.

That is not an attack on ANIIDCO.

It is the standard that any public institution should be willing to meet.

The Real Question for Andaman & Nicobar

The debate should move beyond the simplistic argument that “government should not do business.”

Government sometimes has to enter markets precisely because the market cannot adequately serve the Islands.

But neither should commercial revenue become an excuse to overlook the government's fundamental responsibilities.

The real question is one of priority and accountability:

Where government intervention is necessary, let it be strong. Where the private sector can deliver efficiently, let it participate. Where a government corporation earns revenue, let the accounts be transparent. And where essential public services remain inadequate, let those services receive the priority that only government can guarantee.

ANIIDCO can be an instrument of development.

But ultimately, the measure of a government corporation should not simply be how much money it generates.

It should be how effectively it converts public authority, public assets and public investment into public benefit.

Dweep Tulika | A Truthful & Unbiased Perspective