The Madhya Pradesh government is committed to reducing red tape to foster an environment conducive for investment in the State, says Chief Minister Kamal Nath in a written response to questions submitted by The Hindu ahead of the Magnificent M.P. Investors’ Summit in Indore. Excerpts:
Madhya Pradesh is going to be the first State to roll out a land pooling policy for industries. You claim owners will not be required to relinquish rights. How will you strike a balance between investors’ confidence and rights of landowners without upsetting either of the two?
From the past experiences regarding land acquisitions, it is well known that it’s a lengthy and costly affair and many a time land acquisition projects are marred by litigation.
For the first time in India we are coming up with a land pooling policy for an industrial purpose. We have done meticulous planning for this. In this model, participating landowners will not have to relinquish their ownership rights, instead they will become partners in the development process. They will be direct beneficiaries of all the future price appreciation of the land. Additionally, a 20% cash component of their land compensation will provide them immediate liquidity.
The MPIDC [M.P. Industrial Development Corporation Limited] will issue land pooling certificates to participating landowners. The LPC will be a tradable instrument. Currently, the MPIDC is running a pilot project of land pooling at Pithampur Sector 5. Under phase 1, the pilot project aims to create a new industrial land pool of 400 hectares in the region.
Earlier, it was observed that in many cases land was acquired from participating landowners at a lower cost and later sold at a higher price to the industry. This made the landowners feel cheated. Madhya Pradesh’s new model will stop such a practice.
Investors’ confidence has been seriously hurt in the domestic market due to the lingering effects of demonetisation and the limiting impact of the Goods and Services Tax. In an unfavourable climate like this, what are your guiding principles of engagement with investors? How will you restore their confidence?
There is a huge impact on the overall business sentiment due to the aforesaid measures. The State government has initiated a thorough review of the existing industrial promotion policy. We want to create a conducive environment for investment in the State. My government is focused on minimising red tape to ensure that the industry has a welcoming experience.
We are the only State in India having a tax-delinked industrial promotion policy with additional incentives for export-oriented units and high employment generation units. We believe in the timely settlement of the incentive amount and are committed to transparent and unambiguous policies.
In almost 10 months, my government has been successful in grounding industrial projects worth over ₹20,000 crore leading to direct employment of 30,000 and indirect employment of 75,000 persons.
How do you plan to overcome the effects of demonetisation on the textile industry, a significant contributor to the State’s gross domestic product, as around half the organic cotton produced in the country is from the State?
We are the largest producer of organic cotton in the country, accounting for 43% of India’s production by volume and 39% by acreage. In terms of textile-based industry, Madhya Pradesh is a traditional hub and has a well-established ecosystem.
We are working towards establishing forward linkages in the textile sector. The State has come up with a special incentive package for the garment sector. We are very focused on the textile sector as it is a high employment-potential sector. Through the summit we will showcase various opportunities that the State offers to the textile sector.
By setting up the National Automotive Test Tracks [NATRAX} and endorsing investment in the automobile cluster in Pithampur and the Delhi-Mumbai Industrial Corridor, how do you plan to offset effects of a reduced demand in the automobile sector?
We have a very vibrant ecosystem for the auto sector in and around Indore. Spread across 2,000 hectares, Pithampur Auto Cluster has over 500 units with a combined investment of $11.3 billion. The presence of NATRAX in the region makes it a preferred choice of investment for auto companies. Spread over an area of 1,669 hectares, it has 14 types of test tracks with a total length of 11.3 km. In addition to this, considering the proximity of the region with the corridor influence area, it gives a further boost to the sector by offering excellent connectivity to the rest of India.
With the State promising investors a friendly atmosphere, what promise does it bring for locals? What are the steps taken by the State government to ensure employment of locals in industries and reskilling of those displaced by the projects?
The government is focused on generating more employment through industrialisation and ensuring that the locals benefit from them. We understand that skilled manpower is the need of the hour. The government is going to provide skill-based training to the youth in the State. Courses are being designed based on industry feedback, so that skills meet industry requirements. In order to ensure that this will not be limited to the labour sector only, we are going to focus on better quality in higher education too. Internationally reputed institutes like IIM-Indore, IIT-Indore, AIIMS-Bhopal, MANIT-Bhopal and IISER-Bhopal are present in the State. Reputed private institutes like VIT have already opened a campus in Bhopal while Symbiosis is in Indore. The government is working towards attracting more such institutes in the State. Furthermore, the Global Skill Centre is being set up in Bhopal.
