Regional cafe: Telangana lays an innovative growth path

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Published: June 12, 2015 12:17:10 AM

The state’s maiden industrial policy hinges on the premise of ‘minimum inspection, maximum facilitation’.

The one-year old Telangana government has built high expectations around its industrial policy, which it says is resting on two pillars—minimum inspection and maximum facilitation. The policy framework to be unveiled on Friday, is being driven around the concept “In Telangana—Innovate, Incubate and Incorporate”.

The industrial land-bank in the state is of about 150,000 acres of government-owned land, transferred to the Telangana State Industrial Investment Corporation (TSIIC). Apart from this, TSIIC has 150 ready-to-occupy industrial parks that have attracted both domestic and international investors.

The Telangana Rashtra Samithi (TRS) chief and chief minister, K Chandrashekhar Rao, who is busy wooing investors, says that the new Telangana industrial policy will provide a framework to not only stabilise and make existing industries more competitive, but also to attract and realise new international and national investments in the industrial sector. “The focus will be on the core manufacturing sectors, with the creation of employment for urban and rural youth and adding value to existing skills emphasised at all stages. It is expected that the most significant outcome of this approach will be the production of high-quality goods at the most competitive price, which establishes ‘Made in Telangana-Made in India’ as a brand with high global recognition,” he said. The new industrial policy will have a rights-based approach, with reliance on self-certification.

“About R12,500 crore worth of investment have been committed in the last 6 months and is being operationalised, from about 140 companies with an employment potential of about 30,000 people,” says Rao. Further, the government of Telangana is determined to create an ecosystem in which the ease of doing business in the state matches and even exceeds the best global standards. The state government is aware that offering a hassle-free system is considered to be of the highest priority by the industrialists and accordingly, it will implement an industrial clearance system that goes beyond the traditional single-window system.

This system, called the Telangana State Industrial Project Approval and Self-certification System (TS-iPASS), is being strengthened by way of legislation. The TS-iPASS is the anchor to the industrial policy of the state. To help the MSME sector, the government has brought in Telangana State Industrial Development and Entrepreneur Advancement (T-IDEA) and Telangana State Program for Rapid Incubation of Dalit Entrepreneurship (T-PRIDE).

“The TSIIC will develop the required infrastructure for the sector-specific parks, like approach roads, water supply, power, and common effluent treatment facilities. TSIIC will raise market loans with government guarantee and also get initial minimal budgetary support for the creation of the infrastructure in these new industrial parks and TS-iPASS facilitating the approvals,” says Arvind Kumar, secretary to government, Telangana. “With a land-bank of about 150,000 acres with TSIIC (which implies freedom from encumbrances and litigations usually associated with procuring land) and speedy and transparent clearances, we expect a huge interest from industries. Already, there are queries, most of which are likely to fructify in the coming months,” Arvind Kumar says.

The state government recognises 14 sectors as thrust-areas, where investments will be accorded a priority over others. These include—life sciences (including bulk drugs, formulations, vaccines, nutraceuticals, biologicals, incubation centres, R&D facilities and medical equipment), IT hardware, precision engineering (aviation, aerospace, defence) and food processing. The other sectors include automobiles, farm equipment, textiles and apparel, leather, plastics and polymers, chemicals, FMCG and domestic appliances, engineering and capital goods, gems and jewellery; green technologies, renewable energy, mineral-based and wood-based industries and transport.

The state intends to create a joint corpus, along with industry—as a safety net for possible crises for SMEs that could lead to sickness. The government will also work closely with the RBI-constituted state-level inter-institutional committee (SLIIC) to coordinate revival plans of sick and incipient SMEs. It will explore the possibility of creating a separate power distribution company exclusively for the industrial parks. Further, restrictions on open-access for power will be removed as far as possible. In large industrial parks, the government will facilitate setting up of private merchant power plants. These 300-500 MW power plants will be from Chinese and Singapore-based investors dedicated to group of industrial parks and the tariff could be negotiated between users and the producers.

“The cornerstone of the policy would be zero graft and zero tolerance for corruption. The decision-making in all departments will be transparent and the departmental heads will held responsible for all acts of omission and commission by their staff. An online grievance redressal system will be put in place where the entrepreneur will be encouraged to report corruption or delay on the part of the government,” Kumar says.

The intention would be to create at least two sector-specific industrial parks for each sector. This will ensure that industrialisation reaches every district. In addition, district-wise industry-potential plans for MSMEs will be prepared. The development of industrial corridors is modelled after special investment zones. The industrial corridors that will be developed initially will be Hyderabad-Warangal, Hyderabad-Nagpur and Hyderabad-Bengaluru. Privately-held lands will also be regulated through special zoning regulations so that the desired growth of industries can materialise.

The state has been able to ensure uninterrupted power supply since January 2015 and will further add about capacity for 3,000 MW during FY16. Telangana also plans to come up with a “credit guarantee fund for MSMEs” that eases access to formal credit for MSMEs hitherto left out of the formal financial system.

Marquee investors who have evinced interest in the state include private- and public sector bigwigs. While Anil Ambani of ADAG has committed investment in power, infrastructure and media, NTPC has expressed its willingness to set up a 4,000 MW power generation plant at Ramagundam, fully dedicated to Telangana as per the Reorganization Act. Ikea will be setting up its its first Indian store in Hyderabad. Coca-Cola has committed R1,000 crore for a plant and

ITC is planning to set up a paper manufacturing plant at an investment of Rs 3,500 crore.

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