Our Primary Objective Is To Build Trust Among Industry Leaders: Chief Minister Kamal Nath
In an interview to Rajesh Sirothia, Nath talks about all these and much more.
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Chief Minister Kamal Nath is keen make Madhya Pradesh stand up and be counted among the leading states of the country. The state under his leadership has taken a slew of measures aimed at creating jobs for its youth, providing quality higher education, spurring industrial growth, and making the state an attractive investment destination. In an interview to Rajesh Sirothia, Nath talks about all these and much more.
You have promised 70 per cent jobs to locals in the industrial units coming up in state. How will you make it a reality? Can you assure people this will not be limited to labour only?
The government is focused on generating more jobs through industrialisation and ensure that locals benefit from it. With this purpose, we have announced that 70 per cent of the jobs will be for locals in the industrial units. Such units will be eligible for benefits under the industrial policy. And we understand that skilled manpower is the need of the hour. Which is why the government is going to provide skill-based training to the state’s youth. Courses are being designed based on industry feedback, so that skill meets the industry requirement.
In order to ensure that this will not be limited to labour only, we are going to focus on better quality in higher education also. Internationally reputed institutes like IIM Indore, IIT Indore, AIIMS Bhopal, MANIT Bhopal, IISER Bhopal are present in the state. Reputed private institutes like VIT have already opened a campus in Bhopal and Symbiosis in Indore. The government is working towards attracting more such institutes in Madhya Pradesh. Furthermore, the Global Skill Centre is under implementation in Bhopal. Once ample skilled manpower is available, industrial units will willingly employ them since the attrition rate will be low and they will be comparatively lower cost.
Do you have a plan to maximise industrial production and to minimize production cost? The power tariff and fuel prices are the highest in MP. This leads to increased production cost. In that case how do you expect industrialists to locate units here?
The power tariff is not the highest in MP. The per unit rate of power for industries is the second lowest amongst the industrialised states of India. Furthermore, we are looking to form a separate distribution company exclusively for industrial parks. MPIDC is already acting as a discom for Indore SEZ and providing electricity at 42 per cent lower cost. Once a separate discom is formed for all the industrial parks then electricity tariffs will be reduced considerably.
Across industries, power and fuel form less than 5-8 per cent of the operational cost, while other production costs are already amongst the lowest in the country. Land and labour are cheap, water is available in abundance. Madhya Pradesh is extremely competitive in terms of production cost and has added advantage of being centrally located and 50 per cent of India’s population is in influence area through neighbouring states. With the government focusing on industrial growth, we are confident that MP will be able to attract more industries.
Agriculture is the mainstay of MP economy and food processing has great potential. Do you have a concrete plan to promote it?
Madhya Pradesh is the largest producer of soybean, gram, garlic and pulses, second largest producer of wheat, maize, green peas, onion and third largest producer of citrus fruit, floriculture, red chilli, coriander and cereals. Thus, MP has the potential to be the top state in agro and food processing. For the food processing industry, the state offers 50 per cent more investment assistance than general industry. MP provides enabling infrastructure with 11 food parks (including two mega food parks), 62 multi-product industrial areas.
We are continuously taking industry feedback to make our policy more industry friendly. MP is in process of revising its industrial policy and extensive consultations have been done with the food processing industry to understand their needs and expectations. We are promoting MP as an investment destination especially for food processing industry by participating in various international and national events. We are is also working to promote the establishment of testing facilities, skill development centres, cold chains, irradiation facilities as required to meet export standards.
The automobile sector is in recession and this sector has earlier been made an important component of the development strategy. What is your plan?
The government has focused on diverse sectors for growth including the automobile sector. Today, Pithampur near Indore is a huge auto cluster and simultaneously we are focusing on pharmaceuticals, textile, garments, new and renewable energy, IT & digital, logistics & warehousing.
Today MP is attracting investment in all these sectors and we are committed to developing the best facilities for these industries. We have taken up major industrial infrastructure projects such as 4 greenfield textile parks, a chemical and pharma park. Also, our automobile industry is robust and with the focus now shifting on Electric Vehicles, this sector has great potential in the coming future.
Recently you visited captains of industry in Mumbai. What are your expectations?
The primary objective of the government is to build trust among industry leaders. We want to showcase to them that MP is open for business and the government of MP is committed to their cause. Only then we can attract investment in the state.
I have been meeting industry leaders through our Industry Roundtable initiative where we have been discussing policy initiatives and other challenges and sorting them out. We did a similar roundtable in Bhopal and sector specific roundtables are planned in different cities.
After the implementation of the GST, the logistic hub will also be very important for state tax revenues. Being centrally located, MP had the best opportunity but Nagpur is much ahead of us. Air cargo facility at Indore, Bhopal and Khajuraho is also necessary. What are your plans for this?
The implementation of the GST ushered in much-needed reforms in India’s largely unorganised logistics and transport sector and helped speed up the movement of trucks. MP has the potential to become the supply chain hub for companies. It has introduced a separate policy for Logistics and Warehousing which offers upto Rs 15 crore of investment assistance on plant and machinery, stamp duty exemption, increased FAR, electricity duty exemption, etc.
Industries like cement, which has a more predictable demand, can be catered to from a centralized location. MP has presences of cement industries as well. And we have been supporting them in establishing their warehouses in the state. Furthermore, we are also in discussions with FMCG companies. These companies will also benefit in the state.
Tourism is an important sector. Despite potential why are we not able to make tourism a big success in the state?
Tourism is an important sector and it has always been crucial for uplifting MP as a sought-after/preferred tourist destination on the international map. For attracting tourists enabling world-class infrastructure such as hotels, resorts, wellness centres, etc. are required. For the same currently, investors are offered a capital subsidy of up to 15 per cent under the tourism policy and the state will be launching a new tourism policy.
MP has created a land bank of 1,000 ha. Under the land allotment policy, which is allotted at nominal rates to investors, 17 investors have already been allotted 96.58 Ha out of which four have started operation with an investment of Rs 45 crore. Major allottees are Orange County, Mahindra Holidays, State Express Group, JehanNuma Palace Group and Waxpool Group.
Similarly, the state has a heritage property allotment policy which leads to the preservation of heritage palaces and forts attracting tourists through their conversion into heritage hotels — four such properties have been allotted to investors and they will soon be open for the public after restoration work is completed.
Film tourism is also coming-up in a big way and the state has been a frontrunner in attracting production houses to shoot movies here — Padman, Stree, Sui Dhaga, Sanju are some of the recent movies shot in the state. Further, to give this sector a major thrust the state government will soon formulate a film tourism policy to incentivise production houses shooting TV serials and movies in Madhya Pradesh.