The Make in India campaign has begun with a bang in Maharashtra as the global electronics manufacturing giant which makes iPhones for Apple has finally decided to make a massive investment of $5 billion in next five years to open a new manufacturing facility in the state. No wonder the state government is going overboard in marking the investment as one of the biggest foreign direct investment (FDI) in the country in the recent few years.
Chief minister Devendra Fadnavis had been under pressure due to lack of any new direct investment in the state while neighbouring states were fortunate to attract new investments in the last couple of years. The Taiwan based company has signed a memorandum of understanding with the state government which has allotted 1,500 acres of land for the new facility at Taloja in Thane district. Foxconn wants to make India its major manufacturing hub as it has all the necessary facilities for exporting the products to other countries.
There was competition among states to attract the company but due to facilities for integration of software and hardware, the state offered better environment for growth of the company. Along with the manufacture of new products for several telephone companies, the research and development laboratory will also be set up for advancement in the field.
During his visit to China along with the Prime Minister Narendra Modi, CM Devendra Fadnavis had an opportunity to discuss the project with the company and offer them hassle free completion of formalities and availability of land for the manufacturing projects.
The South Korean steelmaker Posco’s project worth $ 12 billion in Odisha has been grounded due to protests from environmentalists and local people during the UPA government. Maharashtra CM hopes that there will be no such delays or opposition to the proposed manufacturing base for telephone companies.
The Maharashtra Industrial Development Corporation has developed the land at Taloja where several small and medium size industries already exist. With the investment of Rs 35,000 crore, the government expects to generate 50,000 jobs in the state.
The global carmaker General Motors (GM) has already announced its plans to shut down its manufacturing facility in Gujarat and shifts these projects to Talegaon in Pune district where an automobile hub exists with Tata and Bajaj companies. GM wants to develop manufacturing facilities and export cars to Middle East as well as to Southeast Asia. The company will invest to the tune of $ 1 billion.
As far as FDI in the state is concerned, the atmosphere appears to be positive for Maharashtra, but if one takes a review of the industrial situation in the state, there are still areas which need to be tackled urgently to ensure proper water and power supply for any further industrial growth in the state. Despite all the MoUs with the private company , the state has not yet become power surplus as there is still power shortage as compared to demand for consumption of power in the state. The authorities had announced way back that the state will become power surplus in 2011, but nothing of that sort has happened as most of these power projects have remained on paper while those in public sector that are planning expansion of existing capacities are still struggling to meet their deadlines.
The water supply position is not up to the mark as there is always competition between the agriculture sectors, especially cash crops like sugarcane which require water around eight months before they are ready for cutting. Vagaries of monsoon and lack of proper irrigation has led to further difficulties. Apart from providing water for agriculture sector, some of the irrigation dams also have to provide drinking water to urban conglomerations as under-ground water table has gone down considerably due to consistent use for infrastructure and construction projects.
Apart from MoUs and initial enthusiasm, the record of the state’s bureaucracy is not very good as far as setting up of new industrial units is concerned. The red-tapism in the revenue and industries department is so pervasive that the entrepreneurs get exhausted and frustrated due to undue delay in completion of formalities. Many big industries had shifted their units to neighbouring states mainly due to such kind of frustration in last couple of years. The chief minister, as a head of the state administration, will have to take adequate care to ensure that there is no undue delay due to lengthy and complicated paperwork. There is always talk of single window system, but with the MIDC, there are several windows within a single window, set up at the reception.
The government’s job is not over by merely inviting FDI in the state and forgetting about it. The concerned department has to take initiative, do some homework and chart out programmes for overall development of ancillary industries required for these major manufacturing units. If they can do it properly, then they can create another 50,000 jobs easily in the vicinity of these major units.
The CM has developed Key Result Areas (KRA) targets for several key departments concerned with development. He has cautioned the concerned bureaucrats to ensure that considerable attention is given to its implementation so that these targets do not remain merely on paper. If systematic efforts to achieve targets for completion of development projects are undertaken on priority basis, only then will there be some meaning to these FDI projects coming to the state in the coming years.
All these efforts will go waste if the authorities forget that the state economy is debt ridden to the tune of Rs 3.45 lakh crore rupees.Unless there is reduction in non-productive expenditure, the debt will grow further affecting many infrastructure schemes.
As far as trade union functioning in the state is concerned, the state authorities have nothing to worry as the plant level units are in sync with the corporate world and do not stretch it too far to make it uneconomic for the units to function. So far there have not been many cases of friction between the unions and the corporate sectors. The trained manpower is also available due to many educational institutions imparting technical as well as managerial skills to the upcoming youngsters. Except few projects, like nuclear power plant in Konkan which is being opposed tooth and nail by the local population as well as the environmentalist NGOs, there is no opposition to industrialisation process in the state.
The state authorities can do well to push the MIDC projects with the arrival of new major manufacturing units from international corporate sector. This will create further job opportunities for skilled as well as non-skilled workers in the state and help maintain industrial peace necessary for growth of the corporate sector.
