Subhash Desai, minister of industries for Maharashtra, speaks to Sumantra B Barooah on attracting new investment, driving skills development and also making the state more business-friendly.
Maharashtra ranks among India's leading automotive hubs. Subhash Desai, minister of industries for Maharashtra, speaks to Sumantra B Barooah on the measures being adopted to attract new investment, drive skills development and also make the state more business-friendly.
Along with the ‘Make in India’ campaign, you are promoting ‘Make in Maharashtra’ too. Can you elaborate how you are going to action this?
'Make in India' cannot be achieved unless we are successful in the 'Make in Maharashtra' campaign. Maharashtra has always been an industrial leader in the country and we are at the top in FDI and other investments. Maharashtra is attracting a larger portion of that and it will continue. We have introduced many relaxations (for approvals) for ease of doing business.
But Maharashtra is facing new competition?
Yes, some other states have started competing with Maharashtra and this is reality. Other states have every right to grow, so naturally there has to be competition and we are ready for that.
Maharashtra has given many relaxations for industries and ‘ease of doing business’ is our theme. We have removed the river regulatory zones so that many factories could start. We are reducing the number of approvals from 76 to 25. Any industry to be set up in the state needed 76 permissions earlier. We were surprised to know this when we came to power. This is a great relief otherwise they would have run from pillar to post, wasting time for getting permissions, permits, clearances and NOCs.
The Indian government has also made it easier by removing the restriction for getting the NOC for environment for any plot beyond 20,000 metres. Steps like these mean we are rolling out the red carpet to attract more industries.
What measure are you taking to make land available for new projects?
In some areas, industries wanted plots but we didn’t have them. A number of entrepreneurs showed us vacant plots but which were already allotted by MIDC (Maharashtra Industrial Development Corporation).
I went into the details and found that many plots were allotted years ago but not utilised. So I have taken the initiative and asked to take action as these plots, which farmers have sold, are useless if they are not developed. As a result, we could get 1,200 plots in the past two months back to MIDC. These plots will be re-distributed to those industries who can complete their work and go for production within a stipulated time. If they don’t, then the plots will come back to MIDC.
What is the time frame you have fixed?
It depends on the nature of the industry. Some industries can finish their job in six months but other industries may take time. We will sign MOUs depending upon the nature of work.
In which regions are these plots identified?
These plots are in many regions, particularly in those areas where they are in demand like Thane, Raigad, Nashik and Pune.
How much of investment did Maharashtra receive last year?
I don’t have the figure readily, but we are always ahead and last year our share was higher than many states.
Maharashtra is known as an auto hub along with Tamil Nadu and Haryana. Can you throw some light on the steps being taken to maintain the state’s status as an automotive hub?
As far as the auto industry is concerned, Maharashtra is a pioneer. Premier, maker of the legendary Fiat cars, originated in Mumbai. Tata Motors Mahindra & Mahindra, Bajaj Auto and other Indian and global brands hail from Maharashtra. We are definitely trying to attract mega projects but our motive is different. What we want to really achieve is overall holistic industrial development. If one big manufacturer comes, large numbers of vendors follow.
For example, Tata Motors in Pune has developed 500 suppliers. These vendors' base creates indirect employment in terms of local talent and local employment. This is real industrial development and this is what we want to achieve. The SMEs will have greater scope through partnerships with big companies like Mercedes- Benz, for example.
We are also trying to encourage skill development. Only academic degrees won’t do and today employers want employment-ready personnel. Therefore, we have requested captains of industries to come forward and contribute.
Volkswagen has decided to adopt ITIs and will manage as well as revise the curriculum. They will introduce new courses we have designed. It will involve taking teachers from Maharashtra to other countries for a few months for training purposes. Skills development is key and Maharashtra will be equipped.
How will the training of teachers and others be conducted by the companies which adopt them?
Companies will be monitoring specialised people in the field of technical education in close co-operation with the Maharashtra government.
We have entered into an MoU for skills development with the state of Stuttgart in Germany and they are ready to exchange professionals and teachers. They would select the areas like electronics, automobile and engineering sectors, wherein we want to train our youngsters to desirable levels.
To do this, we have to revive our educational institutions. We have 1,000 engineering colleges in Maharashtra and more than 400 industrial and technical institutes, but industry says these courses need to be revamped.
What about the cost involved to send someone abroad?
Industry will support. For example, Mercedes-Benz has opened a school in Hinjewadi. They started from school level but their focus is on technical education.
Industry leaders say Maharashtra is a good industrial state but it requires better fiscal policies and infrastructure in terms of ports and highways. Promises made earlier have not taken shape fully. What steps is the government taking to address these issues?
We are now introducing a new IT policy. Other states have offered more incentives, so to be competitive Maharashtra has to revisit its policy and we are coming up with an excellent policy.
Likewise, we are introducing a retail policy. India is very backward in electronics and it is said that we import 96 percent of our requirements of electronics. We are good in software but not in hardware. That is another focus area.
As regards Maharashtra’s fiscal policy, are you looking at some changes? Some companies have indicated they will go outside Maharashtra for expansion programmes.
Of course, they want more tax holidays and relaxations but we have our own problems and need revenues but we are trying to sort this out and find a solution. Mainly, they are dependent on the Union government or Central taxes policy in terms of import, excise and customs. We are trying to interact and trying to resolve their issues.
The traditional automotive hubs have been Tamil Nadu, Maharashtra and the NCR region. Our PM’s home state Gujarat is fast emerging as an auto hub. Does this make the job a little tougher for Maharashtra?
We have realised that times have changed and other states have come up. They want to attract more investment for industrial development. At the same time, Maharashtra cannot stop and the state is growing and we must allow the growth.
I can specifically say that Maharashtra’s position today is not the result of the last 5-10 years’ efforts – this has been built over the last 50 years when we have developed the infrastructure.
There is a complete eco-system. This business atmosphere can’t be imitated by any state. May it be Gujarat, Madhya Pradesh or Karnataka, they will need some time to come to this level.
How would you like to position Maharashtra to prospective investors and what are the key factors that you put across as the state’s USP?
Firstly it is a state of business; there might be a few shortcomings but this new government is trying to overcome them.
Secondly, we have industrial manpower and the mindset is business- friendly. Any industry depends on human support rather than any other effort and I will say Maharashtra is the strongest along with our new business-friendly policies.
What, according to you, will be Maharashtra’s pitch for the auto industry?
For the auto industry, there is no place like Maharashtra. We have the stage ready and are here to support them. Be it any small issue, we are here to tackle it.
At the Hannover Messe this year, the managing director of Mercedes-Benz invited us (along with chief minister Devendra Fadnavis) to their plant in Stuttgart. We were there for some time and we asked him if he had any issues. He said everything’s fine but while leaving mentioned that there was some environment clearance pending.
We immediately contacted our environment secretary in Mumbai and enquired about the pending environment clearance for Mercedes-Benz India’s Chakan plant. He said with our new policy, we can issue the NOC immediately. Within an hour-and-a-half, he emailed us two clearances and we gave those papers the next day to Mercedes, who were surprised at the speedy clearance.
What kind of growth do you expect in investment in the state this year?
The growth rate is very fast but it’s difficult to project or predict. We expect Rs 500,000 crore of investment in the near future.
How much commitment of that has been made so far?
Much has come from Germany. We have signed MoUs with Continental, and existing brands including Bosch, Siemens and BASF who are expanding.
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