In this fourth article, we analyze the promises related to industry and employment. Maharashtra has the distinction of being the most industrially advanced state of India and also one with the largest Gross State Domestic Product. Thus, sustaining the economic momentum is a necessity for a state like Maharashtra.
Promise– Presently, Maharashtra has a debt of Rs.3,00,000 crores. Moreover, it requires huge investment for completing many ongoing projects in the areas of irrigation, transportation and basic infrastructure. In order to ensure financial discipline, a special strategy will be devised to control wasteful expenditures, plugging financial leakages, improving investment climate and eradicating corruption.
Debt situation has actually worsened with total external debt touching Rs 4.61 lakh crore. In FY19. However, we don’t look at that figure in isolation. Debt is always seen as a percentage of Gross State Domestic Product (GSDP). Till the ratio is less than 25%, the state can service its debt easily. For Maharashtra, the Debt: GSDP ratio is about 16.5% for FY19 thus not creating any pressure on repaying debts.
- Favorable atmosphere will be created for investment in infrastructure development by the public and the private sector, and from India and abroad. A new initiative called Investment Destination Maharashtra will be launched.
- An ambitious initiative called Make in Maharashtra will be initiated and implemented with vigor to boost the manufacturing sector in the state.
- Business and investment conclaves will be organized on an annual basis to attract new investment in backward areas of Konkan, Vidarbha and Marathwada, which have huge growth potential.
- A time-bound plan for speedy implementation of various pending projects with special emphasis on addressing the regional disparity in the state will be launched.
Major infra projects have been sped up due to which investment has flown into them. This report says that Rs 1.6 lakh crore investment is expected in key infra projects.
Moreover, Maharashtra has retained its position as the top FDI destination, with an inflow of Rs 80,013 crore in FY19.
Magnetic Maharashtra investment summit was held in 2018 that also led to 4106 MoU worth Rs 12 lakh crore being inked. This will give 3.6 million jobs. Fadnavis claimed that 63% of these MoU actually fructified showing a good strike rate. The investment primarily came in manufacturing, future industry sectors like hyperloop, electric vehicles, logistics, textiles, gems and jewellery, most of which is in the Vidarbha and Marathwada region.
Crucial projects that have attracted investment include-
- Delhi-Mumbai Industrial Corridor, Mumbai Metro, Bullet Train and Trans-Harbour Link- From JICA
- Samruddhi Mahamarg- AIIB will invest.
- Pune region- General Electric has invested $ 120 million in its plant in Pune. Ranjangaon MIDC got an investment of Rs 1000 crore from Britannia and also from electronic giants like Haier and LG.
- Petrochemical Refinery in Ratnagiri/ Nanar- Investment from Saudi ARAMCO
- Rs 60000 crore Integrated Industrial Area by Reliance Industries
- Rs 2000 crore Railway Coach Factory in Latur through MIDC
- MIHAN multimodal cargo hub in Nagpur has seen 100 million Euro investment from Dassault, the manufacturer of Rafale, to setup units as a part of offset obligations. Patanjali group has also acquired 230 acres of land here.
- AURIC, a planned industrial township would come up near Aurangabad.
- A special ‘Cell’ will be established to ensure facilities such as 24×7 access to electricity, water and skilled workforce to industries.
- The existing `Inspector Raj (rule) will be completely dismantled. Various permissions, clearances and licenses will be provided through single window approach in a stipulated timeframe.
The Maharashtra Industry, Trade & Investment Facilitation Cell (MAITRI) was set up for single window clearances and easy compliance of many laws. It has led to Ease Of Doing Business in Maharashtra.
Moreover, a new Maharashtra Industrial Policy 2019 has been released that aims at taking the share of industrial sector to 25% of GSDP, attracting investment of Rs 10 lakh crore and creation of 40 lakh jobs. It also speaks of Ease of Doing Business, sector specific provisions, export promotions, etc.
- An assessment of all industrial development parks (MIDC) and small scale-industries will be followed by the implementation of the new ‘Udyog Sanjivani Yojana to revive industrial establishments which have been closed for various reasons.
- Issues relating to permission for setting up industries will be decentralized and the powers will be transferred to the regional MIDCs.
The Industrial Policy mentioned above has made Maharashtra Industrial Development Corporation (MIDC), the center point of industrial development.
- MIDC will have a consolidated land bank for proper management
- Using the MAITRI portal for single point delivery of services
- Sector specific promotions and encouragement to emerging technologies
- State level councils for promotion of investment, etc.
The said Udyog Sanjivani Yojana has been launched for developing the unused land parcels and to set up industries in areas where they have been closed down.
Promise– Special scheme will be launched to make Maharashtra a hub of fast-growing sectors such as e-retailing and logistics.
Maharashtra declared its own Retail Policy 2016 which speaks of simplification of labour laws, use of digital technology for retailing, reforms in the Essential Commodities Act, 1955 and Maintenance of Essential Services Act (ESMA), creation of Retail Entertainment Zones, open access to power, etc.
A Logistics Park Policy 2018 was also setup which talks of integrated logistics parks, relaxation for FSI norms, funds for critical infrastructure and access to transport and power. The state plans to set up 125 logistics parks with a funding of Rs 55000 crore at places like Nashik, Panvel, Bhiwandi, Talegaon, Nagpur, etc.
Promise– Local Body Tax (LBT) will be abolished.
There was a lot of hue and cry about imposition of Local Body Tax on various municipal corporations. This led to squeezing of finances of the urban bodies. The LBT was abolished as on 1st August 2015 for most of the traders.
Promise– Reduction in petrol and diesel prices in the state by restructuring taxes.
The government acted quite the opposite. The taxation has increased on petrol and diesel as it forms a crucial source of revenue. Petrol is not under GST. Hence state VAT on petrol is a source of funds required for development.
Promise– Systematic efforts will be made at the government level to make the city as the new IT capital of India by overtaking Bengaluru. An IT Industrial Area Development Authority will be established in Pune to fully tap the potential of this sector and to address the grievances of Indian and multinational companies, entrepreneurs and professionals working in this sector. This model will be replicated to support the IT sector in other cities such as Nagpur, Nashik, Aurangabad and Kolhapur.
IT/ITES Policy of Maharashtra was released in 2015. It talks of reforms for supporting IT Parks. It aims at Rs 50000 crore investment in IT Parks and special incentives like liberal FSI for the parks. IT Parks are coming up in Navi Mumbai.
Promise– The fastest broadband network in India will be made available across the state at affordable prices.
Maharashtra has the highest broadband connections in India with about 4.5 crore subscribers. Also, 15126 Gram Panchayats have been connected to Optic Fiber network under the BharatNet program when hardly any village had optic fiber as on 2014.
Promise– Special initiatives will be taken to promote hardware manufacturing, mobile apps development, gaming technologies, cyber security tools and Fab (chips) technology.
Maharashtra Electronics Policy was released in 2016. The focus is on creating coastal SEZs as electronics manufacturing zones. Agreements have been inked with Sterlite group to invest in a fab unit in Nagpur, while Nestle will invest in Bhandara.