The Hindu Business Line : `New industry policy to make Kerala a hot destination'

Kerala's new industry policy is in line with the Government's efforts to make the State more investor-friendly. Inputs from all departments will be incorporated into the policy. — MR ELAMARAM KAREEM, KERALA'S INDUSTRY MINISTER.

As part of its continuing efforts to make the State investor-friendly, the Kerala Government will soon come out with a new industry policy. The policy will be comprehensive, covering all sectors, and the departments concerned have been directed to prepare roadmaps for their respective areas to be incorporated into the policy, according to Mr Elamaram Kareem, Industry Minister.

Discussions are on with various apex industrial organisations such as the Confederation of Indian Industry as also industrialists to elicit their views on how to go about the task of making Kerala a hot investment destination. A draft will be prepared based on these discussions and circulated among different stakeholders, including trade unions, for their comments. The new policy is expected to be announced by December, the Minister told Business Line.

The policy will lay emphasis on the development of such sectors as food processing and garment manufacturing, which have earned the State a name in domestic as well as overseas markets. Also high on the agenda is the minerals sector, with the focus on value addition. These initiatives, however, would not be at the expense of the State's traditional sectors, such as coir, cashew and handlooms; the policy would look at the rejuvenation and sustained growth of these sectors, Mr Kareem said.

Approach to public sector enterprises

The Government is working on streamlining the operations of public sector undertakings under the Industries Department as also reviving the loss-making and sick units through appropriate packages. For the purpose, the units have been categorised into four groups: Units that have been continuously profitable; those that make operating profits but have negative net worth; units with positive net worth but incurring operating losses; and units that are lying closed.

The Minister said that the focus was on companies that could be revived and on those whose performance could be improved by providing adequate support. For instance, the Kerala State Electronics Development Corporation (Keltron), though with a negative net worth, has been making operating profits the last couple of years. Similarly, Transformers and Electricals Kerala (TELK) made an operating profit last year. These companies face a variety of problems, which have to be sorted out.

The Government has not taken any decision on closed units such as Kerala Soaps and Oils Ltd, Kerala State Detergents and Chemicals Ltd, and Kerala State Salicylates and Chemicals Ltd. Many of the sick or closed units have significant assets, such as land in prime locations. But the question was how to clear their liabilities and what was to be done with the assets, Mr Kareem noted.

For the units that can be revived, the State Government is looking at the option of forging ties between State and Central PSUs. It has initiated talks with National Thermal Power Corporation (NTPC) on how best the latter could help companies such as TELK and Kerala Electrical and Allied Engineering Company Ltd (KEL) in terms of technology and marketing.

Again, the Government is seeking financial assistance from the Indian Space Research Organisation (ISRO) to buy modern equipment for Kerala Hitech Industries Ltd (Keltec), which supplies components to the former. A core committee has been set up for the purpose and ISRO's response at discussions on the subject has been positive. The Railways is another central organisation with which the Government has been having talks for getting supply contracts for Autokast.

These apart, tie-ups among the State PSUs themselves are encouraged. For instance, the Kerala State Electricity Board (KSEB) can buy equipment and components from TELK and KEL. Towards this, the KSEB will make an advance payment, which can be used for the technology upgradation of the other two companies.

Assistance from Banks

The Minister said that assistance from banks was another important factor in the effort to revive the PSUs. The Government had had a meeting with all major banks operating in the State and one of the suggestions was on the one-time settlement of liabilities of the units. The Government would take upon itself the responsibility of settling the liabilities over four-five years. A substantial amount had been set apart for the purpose in this year's Budget, he said.

A key suggestion was to set up a committee with representatives of the banks for studying the revival proposals for potentially viable companies. The banks will also have the facility to monitor the progress of the revival projects and may even have representation on the boards of these companies.

The banks were positive to the proposal and a core committee had been set up. The meeting also decided to set up unit-wise committees to oversee the implementation of the revival package, he said, adding that 12 companies had been identified for such revival. They included Keltron, Kerala State Textiles Corporation, TELK, KEL, Traco Cables and Steel Industrials Kerala Ltd.

New infrastructure company

The Government is going ahead with the formation of an infrastructure development company. The Memorandum and Articles are ready and the new company will be registered next month.

The Kerala Industrial Infrastructure Development Corporation (Kinfra) and the Kerala State Industrial Development Corporation (KSIDC) will jointly hold 26 per cent of the equity of the company, and the balance will be given to the public — mainly non-resident Keralites.

The Government, through Kinfra and the KSIDC, will be the single largest shareholder in the company, which will have an authorised capital of Rs 200 crore. The company will acquire land wherever available and create infrastructure across the State.

More Stories on : Industrial Policy | Kerala

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Iron out ore differences

Public health spending and outcomes in States

`New industry policy to make Kerala a hot destination'

Navaratri nostalgia

A multilateral initiative to combat corruption

The simple, gentle man of steel

Beyond GDP

Multiplex benefits