From having a relook at all the laws related to starting an industry in the State to implementing a centralised inspection mechanism and preparing master plans for all the public sector units, the Industries Department has been witnessing much action in the past weeks, which were also filled with controversies.
In an interview to The Hindu , Industries Minister P. Rajeeve says that the State government has been moving ahead with several wide-ranging measures with an intent to turn Kerala into a model destination of responsible investment in the country.
“The conversation the world over has shifted from ease of doing business to responsible investment. Around one fourth of the investments globally over the past year has happened with a focus on Environmental, Social and Corporate Governance (ESG). When labour costs increase, especially in the apparel industries which employ unskilled labour, they shift to other locations. Kerala has a brand value of its own globally. It is a safe place with a highly skilled workforce. We are focussing on how to utilise this effectively with ventures suited for the State,” says Mr. Rajeeve.
Industrial-dispute mitigation mechanism
According to him, the continuation of the Left Democratic Front (LDF) government has ensured that there was no need for a change in policy, but only measures to strengthen the existing policy of ensuring ease of doing business, for which several amendments were made over the past four years. The first Cabinet meeting of the new government had decided to bring in a Bill for a mechanism for grievance redressal and industrial-dispute mitigation.
“The LDF in its first term had implemented several path-breaking measures to improve ease of doing business. We are continuing this with three important steps — making it easier for starting a business lawfully, centralising inspections and decriminalisation of some clauses by updating existing rules. An expert committee is being constituted to look into all laws dealing with industries and update or remove the outdated ones. The committee, in addition to its own research, will consult with all organisations in the sector, because they will be more familiar with such laws of which they might end up in the receiving end,” says Mr. Rajeeve.
Some of the laws currently requiring imprisonment, for which a fine would be adequate, would also be relooked into.
Two-tier system
As per the proposed industrial disputes mitigation Bill, which is to be presented in the Assembly later this month, a two-tier system will be implemented at the State and district level for grievance redressal. Decisions by these bodies, which will be taken within a stipulated period, will be binding on all the departments. Penal provisions are also being thought about for failure to implement the decisions.
One of the issues the department noted in the reviews is that multiple departments are carrying out checks, sometimes without coordination among them. With the centralised inspection system, checks in low- and medium-risk industries can be conducted online. Checks in high-risk category industries would be carried out only after giving advance notice and a software system will automatically select the inspectors. Report on the checks will be provided within 48 hours.
Kitex controversy
However, more than the policy-level interventions, the government has a bigger task in managing perceptions, especially after the controversy around the Kitex Group, which has threatened to move future investments to Telangana. When asked about this, Mr. Rajeeve said that the whole controversy seemed like a marketing strategy to utilise this perception of business unfriendliness, which is false.
“We have been interacting with business bodies, including FICCI, all of whom have attested to the business friendliness of Kerala. When the controversy broke out, we explained clearly what had happened, and also offered to talk and resolve any issue. Yet, they were not ready to be convinced, because they seemed to have a plan,” he says.
When the controversy broke out, Mr. Rajeeve had addressed a press conference and said that the government never took initiative to conduct such checks. It only carried out checks in response to complaints from various quarters regarding the company’s functioning and orders from the National Human Rights Commission and the Kerala High Court, which the government was bound to do. He said that the government had taken extra efforts to reach out to the company and address its concerns, yet serious allegations of the State being investment-unfriendly are being levelled.
More companies coming to State
The Minister hints at more companies reaching out to set shop here, including a big project which will be finalised in the coming weeks. Last week, Tata Elxsi inked a memorandum of understanding (MoU) with Kinfra to expand its facilities in Kerala, with an investment of ₹75 crore in the first phase. Hindalco Industries, under the Aditya Birla group, held talks this week with the Minister regarding an aluminium extrusion plant.
“In fact, during the period when the controversy was at its heights, another new MoU was inked for new ventures on 40 acres of land in the Kinfra’s petrochemical park. So, we are confident of the investor-friendly atmosphere here, despite the attempt to build a perception against it. Kinfra’s parks have its own subsidiary power facilities and connections can be provided for new ventures within 24 hours,” he says.
He says that land acquisition for the Bengaluru-Kochi industrial corridor will be completed by December this year, after which certain clearances from the Union government will be sought. A portal for daily review of the corridor-related activities has also been readied.
Reviving PSUs
Parallelly, an effort to revitalise the public sector units (PSU) in the State is also ongoing. The PSUs have been divided into seven categories and master plans are being prepared for each of them with a focus on modernisation and diversification, laying out a plan of action for the next 10 years. The last set of draft master plans were presented to the Minister on Wednesday. Following this, consultations will be held with trade unions and officers in each company to incorporate their suggestions.
The Public Sector Restructuring and Internal Audit Board (RIAB) will constitute an expert committee, which will study the technological viabilities and marketing possibilities of the PSUs. They will be further classified, to choose the ones which need extra focus, the ones needing more fund infusion and such measures. The vacancies for managing director posts in 20 of these units have been reported to a selection committee. A recruitment board for PSUs is also set to be formed.
Land scarcity
“Land scarcity is an issue in densely populated Kerala, where you have to negotiate with at least 200 people to acquire 100 acres, while in some other States 1,000 acres might be easily available. But, we are focussing on our strength of attracting industries using skilled labour and providing higher wages. In five years, Kerala will be a model for the country as a responsible investment destination,” he says.
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