Executive summary

EXECUTIVE SUMMARY
Interaction with Dr. Bhushan Gagrani, CEO, Maharashtra Industrial Development Corporation,

on Role of MIDC in Industrial Development of Maharashtra on August 19, 2015
“The ecosystem created in Maharashtra over the past few years is indicative of a bounce-back”, said Dr.Bhushan Gagrani, CEO, MIDC, at a well-attended interactive meeting organized by IMC. Dr. Gagrani said that there is a growing interest in the manufacturing sector at both the State and the national level. This needs to be capitalized on for the larger good. The Government of Maharashtra is keen to facilitate business processes and is taking concrete steps in that direction by minimizing the number of approvals and introducing self-certification systems wherever possible. Maharashtra contributes around 15% to India’s GDP and it accounts for 30% of the total FDI inflow into India. Compared to any other Indian State, Maharashtra’s GDP has grown at the highest rate in the past 35 years. The State Government’s progressive policies are in full alignment with the Make in India campaign. There is a dedicated focus on improving infrastructure and connectivity and the State Government is taking further measures to improve the ease of doing business in Maharashtra.
Dr. Gagrani said that the value of the cumulative FDI inflow in the period 2001-14 was $ 70.4 billion, compared to the next best destination Delhi, which garnered $ 45.8 billion (19% of the total). India’s most ambitious infrastructure programme – the 1483 km Delhi Mumbai Industrial Corridor (DMIC) – will cover 8 districts in northern Maharashtra. 29% of the State’s area and 26% of the State’s population will be within the influence area of the DMIC and thus stands to benefit from it, directly or indirectly. The DMIC will make seamless movement of goods and services a reality in India and Maharashtra is positioning itself to derive maximum strategic advantage from it. Maharashtra is renowned for its industrial clusters and the key is to convert them to integrated industrial townships, which will be self-sustainable and help to propel the future economic growth of the State. The Government of Maharashtra is expending considerable efforts to enhance the business climate and maintain its reputation as the nation’s premier investment destination.
Some of Dr. Gagrani’s key observations are as follows:

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  The MIDC remains the nodal agency for all investors in Maharashtra and it owns 264 industrial complexes in the State covering approximately 84,000 hectares of land.
  
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  The MIDC includes 32 IT Parks and 9 SEZs and remains the key link between the Government and the industry.
  
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  18,500 industrial projects worth $ 165 billion have been approved in Maharashtra in the period 1991-2013. The total employment to be generated by the proposed projects is nearly 4 million, which is a significant proportion of the national average in the industrial sector.
  
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  Maharashtra boasts of a diverse industrial base with a large presence of manufacturing and IT. These constitute its comparative advantage.
  
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  The Government is promoting Centers of Excellence covering all aspects of cutting edge R&D in emerging areas of technology.
  
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  Some policies aimed at enhancing the ease of doing business in Maharashtra include the following:
  
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    VAT and CST abatement
    
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    Stamp duty exemption
    
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    Electricity duty exemption
    
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    Single Window Clearance
    
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    Investor Facilitation Cell
    
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    Investor After Care Cell
    
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    Number of days for obtaining construction permits reduced from 162 to 50
    
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    Online submission of application forms and supporting documents
    
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    Mega and ultra-mega projects can now qualify for fiscal incentives up to 100% of the fixed capital investment
    
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    7 benches of High Court judges are constituted to hear cases of commercial disputes
    
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  The Government is also dealing with environmental issues carefully and responsibly to ensure that industrial development does not occur at the cost of ecological degradation.
  
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  On the labour front the Government has introduced a self-certification scheme with a Single Integrated Return Form for implementation of 16 labour laws in the State.
  
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  Land acquisition remains a contentious issue and the cost of land acquisition for industrial development is set to rise steeply all over the country. The issue has acquired political overtones and so beyond a point MIDC is helpless. Nevertheless, vis-à-vis other Indian States, Maharashtra still has one of the most liberal and progressive policies regarding land acquisition.
  

Dr. Gagrani hinted that the State Government may not give any further extension to entrepreneurs who have been allocated industrial plots in Maharashtra and were unable to set up businesses for several years. Their allocations will be cancelled and those areas given to others who are willing to set up some industry.

The ensuing question and answer session revolved around the following:

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  How the Land Acquisition Act will influence MIDC’s policies to unshackle the State’s industrial potential
  
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  Infrastructural issues in rural Maharashtra, particularly those pertaining to power and electricity pricing, and their impact on the State’s economic competitiveness
  
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  Issues pertaining to infrastructure maintenance in MIDC areas and how they can be gainfully resolved for all stakeholders
  
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  Local self help groups (SHGs) and their contribution to industrial development in Maharashtra
  
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  Policies involving e-governance in Maharashtra and how they can be used to speed up administrative efficiency
  
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  Attracting even more investment into Maharashtra especially by tinkering with the taxation policies of the State, which are often seen as an impediment to economic growth
  
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  Development of an integrated ecosystem and whether the concept of the single window clearance in Maharashtra is a myth or a reality
  
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  Development of textile parks in Maharashtra and why they are being chronically underutilized
  
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  The hefty premium on extra FSI in the Navi Mumbai area and how it can be reduced to promote industrial investment
  
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  The allocation of space in SEEPZ and what MIDC can do to expedite the process
  
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  Encroachment issues in MIDC areas and what the Government is doing about it
  
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  Environmental clearances and how they are hampering industrial development
  
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  Transportation issues pertaining to accessing MIDC areas in remote parts of the State
  

Delivering the vote of thanks, Mr. Deepak Premnarayen, Vice-President, IMC, said that Dr. Gagrani’s presentation was lucid and the Chamber will consider submitting a representation to MIDC, based on the discussion held at the meeting.

Dr. Dhananjay Samant

Director and Chief-Economist