Subhash Desai: ‘We are very keen to set up an electric vehicle manufacturing hub in Maharashtra.’

by Sumantra B Barooah 20 Aug 2020


Even as the coronavirus pandemic continues, economic and industrial activities are gradually coming back on track. States are also strengthening their pitch to attract investments and grow their economies. Subhash Desai, Industries Minister, Maharashtra Government, speaks candidly about the state government’s latest initiatives to attract investments, sustaining interest from the automotive sector, creating an EV manufacturing hub, and the renewed approach towards signing MoUs.

What are the key targets of Magnetic Maharashtra 2.0, and how is it different from similar initiatives by other states, or from the first version of the initiative? How are you making it little easier for investors, in the current scenario?
This Covid-19 pandemic has affected most of the economies across the globe, but we cannot sit still and stay quiet. We have to revive the economic activities. So, Maharashtra decided to re-open industrial areas and we started giving permissions to relaunch production, and as of today (July 8) as many as 65,000 industrial units are operational. And more than 16 lakh workmen have resumed the jobs. Of course, everything is not normal. There are difficulties but still we are trying to get over them.
It is a known fact that whatever Foreign Direct Investment (FDI) comes to India, the major part, more than 30 percent, comes to Maharashtra. We wish to maintain our position. 
And for that, we have made huge policy reforms for ‘Magnetic Maharashtra 2.0’.
One is the ‘plug-and-play’ scheme. New investors can launch their factories here, in plots ready with infrastructure, land, water and power. Our industrial development corporation, MIDC, is now ready to give industrial sheds with MIDC investment, on rentals. Investors can just bring in their machineries and start working. We have kept as much as 40,000 hectares of land ready across the state, at various locations. 
The ‘master licence’, which we call ‘Maha Parwana’ is a big change. As soon as an agreement is finalised with the industries, we will issue them the master licence within 48 hours. They can straightaway start the erection work, or if the shed is ready then they can start their operations. During the production period, the other licences will be made available. It was not there. As many as 18 licences, from different departments, are required to be procured by industries before starting operations. That used to take months, but no more now.
We have also decided to appoint one relationship manager for every serious investor. He will be responsible and empowered to help them at every stage, so that the investors do not have to run around to resolve any difficulty. This person, from the industry department, will be responsible for complete handholding. 
We have launched Maha Jobs, a web portal for industrial employment, where both job seekers under different categories — skilled, semi-skilled, unskilled — and industries who need people can log in and register their requirements. 
It was inaugurated on July 6 at the hands of Honourable Chief Minister Uddhav Thackeray. Within 24 hours, as many as 85,000 candidates registered their names, and 751 companies have registered their requirements. Over 50,000-plus jobs were ready to be recruited for. Maha Jobs is not only the first-of-its-kind in Maharashtra, but in India too. 

Overall, how much of the investor interest is from the auto industry?
Now, we are very keen to set up an electric vehicle (EV) manufacturing hub. We are negotiating with many investors and companies. There are companies from Germany and Hungary too. One of the companies is actively negotiating with us for setting up its electric bus manufacturing plant. 

Given that Maharashtra wants to also be a major manufacturing hub for the EV industry, are you offering any special incentives to investors from the EV industry?
Our EV policy spells out a very attractive and healthy policy. We have verified this with the investors as well as the Indian domestic manufacturers. They say that there is nothing wrong, it is a perfect policy, and over time people are bound to come here.

The state government signed MoUs worth 
Rs 16,000 crore last month — can you elaborate?

Yes, MoUs worth Rs 16,000 crore were signed with as many as 12 investors from different countries — Japan, Germany, Taiwan and Korea. They are into various sectors — chemicals, pharmaceuticals, engineering, fertilisers.And there were some automotive companies from China also which wanted to set up manufacturing base in Maharashtra, but that got stalled due to the Indo-China border tension. 
In one deal, Great Wall Motor of China wants to acquire the General Motors plant in Talegaon. And there’s a reverse model. Foton, another company from China, couldn’t start operations and so they are negotiating with an Indian group which has ties with some foreign companies. They are actively negotiating with Foton to acquire their assets.
The Foton deal is okay. They are moving out. As far as Great Wall Motors plan is concerned, that is kept on hold. Till the policy with China is absolutely made clear by the government of India, we are not moving on this front. 

Is the competition to attract investment  growing? From the perspective of investment by auto industry players also, how do you plan to keep Maharashtra as an attractive destination and be on top?
We are already on top. There is no difficulty if other states are competing. In fact, I welcome this healthy competition. Let every state try, and try to go ahead. It’s okay. There’s nothing wrong, but I am confident that whatever investments come to India, the major chunk would come to Maharashtra, because Maharashtra has a complete industrial and business ecosystem. 
Our Mumbai is the commercial capital of India. You name any financial institution and you will find its office in Mumbai. Many global banks and other financial institutions all have their presence here in Mumbai. So, for big-ticket investors, it’s very easy for them to develop their ideas.   
Our strongest point is educated and skilled manpower. Every year, a million graduates pass out from our universities in the state. In addition, there are many skill development initiatives in the state. 

Do you think the ongoing coronavirus pandemic may somewhat erode this attraction for big cities?
If you refer to Covid-19, it’s affecting all the countries. Why Maharashtra or India? Every country is reeling under it. It is a common challenge for everyone, but we see opportunities in these challenging times and we try to grab those opportunities. 

The last time we met, you had said that ‘Make in India cannot be an absolute success without 'Make in Maharashtra’. Since then, how far have you progressed compared to the earlier status of the state?
Honestly, not all those MoUs signed during ‘Magnetic Maharashtra’ and ‘Make in India’ have been executed. A major part of that is yet to be executed. That is a fact. But still, in these last five years when we tried to check facts, we found that among the ones that got executed, the largest investments came to Maharashtra again. We can just imagine what the situation in other states must be. With lessons learnt from our experience five years ago, we have now modified  our modalities. Now we sign MoUs very carefully. 
‘Make in India’ was an event. It was a fair. And in a fair, there’s no time to check, re-check and scrutinise. We welcome everyone, we don’t refuse anybody. Anybody comes and says, "I want to sign an MoU", we just sit and sign those MoUs. We believe their intentions. But, ultimately, over a period of time, we could see that many MoUs were not done seriously. We have now changed our approach. As regards the 12 MoUs which were signed last month, each proposal has been scrutinised in detail. And they have advanced in some cases, like selection of location and understanding the incentives. 

What are the top three criteria which you put to any investor now before signing an MoU?
We try to understand their preparedness — whether they have checked all the facts, identified the location, compared Maharashtra with other states and finally decided to invest in Maharashtra. If that is done, we can believe that they are seriously going ahead.  

This interview was first published in Autocar Professional's 'July 15- Maharashtra Special' issue.