Over the past two months, Uttar Pradesh has pressed the accelerator on reforms in a bid to revive its economy even as the country grapples with the Covid 19 pandemic and the resultant lockdown. The measures include creation of land banks, amending various policies and suspending labour laws. It hasn’t been really a preferred destination for investors, a fact that the state government is hoping to change with measures. In conversation with Deepa Jainani, Uttar Pradesh’s minister for investment, export promotion and MSMEs in the state, Siddharth Nath Singh, expressed confidence that UP is well on the road to revival. Edited excerpts:
Reviving the economy has been the focus of the government. What steps are being taken for this?
We are trying to position ourselves favourably in the domestic and global supply chain. In order to bring investment and become an MSME hub, we have started reforming existing policies. Labour is one. Apart from that, we have taken a lead in restructuring the Electronics Policy 2017. We are moving from a GST-based incentive to capital subsidy-based incentive. We are also doing a top-up to the Centre’s policy. In many areas in manufacturing, the Centre has very restrictive incentives on refurbished plant and machinery. We are doing a top-up because whichever industry comes from China will not be ‘brand new plant and machinery’. It will be refurbished. So, we are designing policy accordingly. We have already started touching upon our textile policy, food processing policy, logistics and warehousing policy, pharma policy, which is again driven by MSMEs.
The Union Cabinet has decided to set up three pharma parks at the cost of Rs 3,000 crore in the next five years, and also to give financial incentive to drug manufacturers who would invest and set up plants to manufacture active pharmaceutical ingredients (API) which are the raw material to manufacture medicines. UP is pitching hard for it. If we land one, it can come up either in Unnao or Pilibhit; 1,200 acres of land is already available in Unnao, and 1,800 acres of government land is available with UPSIDC in Pilibhit.
The state government has also taken steps to create land banks for industrial development. Tell us more about it.
Land will be in abundance in UP. We have identified over 1.15 lakh acres of gram sabha land and barren land. The CM has ordered that all of this needs to be cleared and taken in as land bank. As of today, roughly about 25,000 acres GIS-mapped land is ready and available. So, if any investor walks in and asks where land is available, we will give him 5-6 options, in Bundelkhand, in Noida and Greater Noida; and, of course, Jewar airport is going to be the largest attraction we can give to anybody.
We see people in the manufacturing sector looking for cheap land. So, UP being a large state, we have an advantage that Haryana will never have, or for that matter Maharashtra or even Telangana. In Maharashtra, everything has to be near Mumbai or Pune or Nagpur. They have all exhausted their land and prices are very high. Same goes for Telangana. It is only Hyderabad, or around Hyderabad. But, UP holds the advantage of having many options. We are in a position to offer land at differential rates, or preferential rates, I would say.
UP has been trying hard to woo global companies relocating from China. How are you going about it?
I have done 3 webinars using the platforms offered by USIBC, USISPF and Indo American Chamber of Commerce, and have already touched roughly 600-700 American companies through them. The takeaways of those meetings were that they were looking for three things—cheap land, wage competitiveness and good connectivity. Being near to Delhi is an advantage we do hold. We now have the Jewar airport and a criss-cross of expressways that are coming up—the Purvanchal Expressway, Bundelkhand Expressway and the Ganga Expressway. These are going to be a great boon for us. Roosevelt’s theory that ‘it was roads that built America, and not the other way round’ holds true for UP too. UP will be built by its infrastructure. Apart from the Jewar airport, we have the Kushinagar airport coming up. Also, Varanasi and Lucknow airports are under expansion. Regional airports at Prayagraj, Chitrakoot and Bareilly, too, are coming up.
What has the response from these MNCs been so far?
We are seeing a good response. Microsoft wants to open its second campus in Greater Noida. Apart from that, a major South Korean electronics company is interested in shifting one of their units out of China. They were looking at moving to either Noida or Vietnam. Though they are interested in coming to Noida, it has certain disadvantages. The cost of manufacturing is higher than that of Vietnam by 10%. So, we assured them we will look at it. It is a huge investment of Rs 6,500 crore. The CM is also keen on them coming to UP. I think there is a good possibility that we will be able to bring them in. Apart from that, 5-6 leather companies are in touch with companies in Agra. Already a German company, Von Wellx, has shifted its entire shoe production business from China to Agra.
Earlier, the leather industry in Agra was facing a problem of having their entire consignments sent back from European countries if they failed to meet their certification standards. This was causing a lot of problems for them. Now, the government has created a common facility centre for lab testing in Agra itself. One little thing has changed the entire scenario. Now, foreign companies are making a beeline to come to UP. We are in the process of setting a similar lab testing facility for the Kanpur leather industry too.
The state government is proposing to amend the revenue code and the land acquisition Act…
Yes, we have proposed to amend the revenue code to allow industrial units and parks to lease agricultural land as farm land is cheaper. The proposal also seeks to keep the land use conversion fee from agricultural to industrial to a maximum of 15-20%. Cheaper land price is the biggest draw for companies that are looking at relocating in India. Additionally, with regards to the land acquisition Act, we have decided to simplify the process of acquiring land within a distance of 1 km each on both sides of the state’s expressways. Presently, the law doesn’t allow us to acquire land near the expressways that are being built.
UP has been banking on MSMEs to revive the economy and also provide jobs to the migrants who have returned. How do you plan to go about it?
With over 90,000 units in the state, MSMEs are the backbone of UP’s economy. We are the key driver. Having said that, it is a big task for the sector to absorb the migrant labourers. So, we have started mapping the skills of these migrants, otherwise we would not know where to send whom. In the meantime, industry associations were lamenting the fact that they cannot start operations as most of the workforce had left for home. In order to provide meaningful employment to the migrants and also provide a workforce to these industries, we have signed MoUs with different industry bodies. This will take care of providing jobs to 11 lakh migrants.
Simultaneously, we have given out loans totalling Rs 2,002 crore to 56,754 new entrepreneurs in the MSME sector. The yardstick is that in every new MSME unit, four people get jobs. So, roughly, 2.5 lakh people will get jobs there too.