Maharashtra retains its numero uno mantle as the most industrialized state; however, it is coming constantly under pressure owing to growing aspirations and competition from neighbouring states.
In many fields where it had a monopoly, it has been over taken by competing states; on the other hand, it is struggling to maintain its position in the other sectors; but where it definitely lags behind is in human development index. In the last few decades, other states in the region have secured many new industrial investments, which ought to have come to Maharashtra. Likewise, some major industrial projects that were in the pipeline in Maharashtra have shifted to other states for various reasons – costly energy being one important impediment.
With change of guard in the last assembly elections, the state is fortunate to have a Chief Minister in Devendra Fadnavis who happens to be the blue eyed boy of Prime Minister Narendra Modi. Modi had praised Fadnavis’ skills as a legislator while campaigning for the assembly elections and preferred him for the top post, even though several heavyweights were in the fray.
But Fadnavis until then — though he had a reputation of being a competent opposition legislator — was not known for his understanding of nuances of power politics. However, with the solid support of the party high command he has been able to consolidate his political hold; having accomplished that, he has decided to follow in his mentor Modi’s footsteps.
Taking a cue from Make in India, Fadnavis has tried to replicate Modi’s mantra in Make in Maharashtra, hoping to thereby consolidate the industrial sector and provide it better infrastructure. But the general perception of the state as the most costly and one mired in bureaucratic red-tape has undermined Maharashtra’s industrial growth in the last one and a half decade.
The growth of the state cannot be assured due to two main drawbacks –- availability of cheap power and unhindered water supply for new projects. Despite assurances from successive power ministers that the state will become energy surplus by 2011, no such comfort zone exists as demand has outpaced supply despite sluggish growth. In fact, the state will have to work on many pronged strategies to ensure speedy and substantial growth.
Incidentally, Modi has taken a few chief ministers along with him on some of his foreign trips and Devendra Fadnavis has been lucky to be in the overseas entourage. It is hoped that his presence on these trips will help channel foreign investment to Maharashtra. During his visits, the chief minister has tried to hard sell the state by harping on the fact that Maharashtra accounts for 30 per cent of the country’s exports. During his recent visit to China, details of which are yet to filter out, Fadnavis had an opportunity to discuss further tie ups between Mumbai and Shanghai — both being compatible international financial hubs.
The state government has suggested possible cooperation in infrastructure, IT and mines sectors, as many private collaborations are already successfully operating in these areas. One big plus point for Shanghai-Mumbai cooperation is the fact that the Chinese premier hails from Shanghai and would be interested in furthering cooperation between two cities. While in China, the CM harped on the Maximum City’s advantages, just as in Davos he projected his home town, Nagpur, which is the second capital of the state. He has also assured full cooperation if the Bank of China decided to open a branch in Mumbai.
Trying to cash in on Aurangabad’s status as an international tourist destination, the state is also pushing for a special relationship between Aurangabad and Dunhuang city in Gansu province of China, to promote cultural tourism. An agreement has been signed for this purpose and it would attract Chinese tourists who are travelling in droves all over the world. The Chinese establishment already has a soft corner for the state as Doctor Dwarkanath Kotnis, who served the Chinese people during the Second World War, hailed from Solapur.
China has shown keen interest in the smart cities project promoted by Prime Minister Modi and Maharashtra can take maximum advantage of this since it has the highest rate of urbanization due to migration. But even though on paper the state has attracted the highest number of investment proposals during the last decade, the perception that it is difficult to do business in Maharashtra persists. Despite his extensive foreign tours and inking of numerous Memorandum of Understanding with cities and corporates, the negative perception will not alter unless the CM sets his house in order.
Again, the bureaucracy in the state is not at all investment friendly; the license raj still exists and those who want to start new projects or expand existing ones find it difficult to grapple with the red tape. They find the industrial climate in Gujarat more conducive and friendly and some of them have even relocated their operations to the neighbouring states. Unless immediate steps are taken, the state will find it difficult to develop industrial hubs and the proposed smart cities.
The Chief Minister launched the Make in Maharashtra campaign so that the lower rung of administration also becomes responsive to the industrialisation drive. But despite the much touted single window approach, there are so many formalities and inter-linked clearances that entrepreneurs find it difficult to comply without taking recourse to middle men. The latter, in turn, fleece them and make the prospect of doing business in the state extremely unviable. Rampant corruption in the industries department is also a cause for worry and needs to be addressed.
The state can bring in new projects and implement them on a priority basis provided it has the required infrastructure. But the condition of roads in the state is not very satisfactory and some of the major express highways are also in a pathetic condition. Unless, road, water and air transport improves and is brought to a satisfactory level, many projects will simply languish. The so-called five star industrial estates have remained on paper, as they invariably fall into neglect after being launched with much fanfare. The industries department must undertake a study to examine the existing conditions of the industrial estates.
The power shortage is a harsh reality and unless this is tackled on a war footing, new units cannot be even considered. Apart from traditional coal and water based power projects, the state also must give priority to harnessing unconventional sources of power generation, such as wind and solar energy. Without providing this basic infrastructure, Make in Maharashtra will remain a day dream.
Prakash Bal Joshi
