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SEARCH - Supplement September 2011
EDITORIAL
THE MAHA’LUCRATIVE STATE? s Maharashtra the Maha’lucrative investment destination? Are the companies here thriving or striving to stay afloat? Are you ready to set up your next plant in Maharashtra? Too many questions! And why not!! When a leader starts losing its sheen, it’s time to ask some critical questions. There is an urgent need to derive a workable solution towards molding Maharashtra into the most sought after investment destination and an industrial hotspot! Every stakeholder in Maharashtra’s industrial development has to answer this critical question: Why should a company set up its base in Maharashtra and not Gujarat or Karnataka or Tamil Nadu or Andhra Pradesh? And isolating industrial development from the general atmosphere of the state would be a mistake. It is important to accept that investment, manufacturing competitiveness and the quality of life in the state are all interrelated. You cannot look at any of these in isolation. The simpler you make life, the more inclined professionals and investors will be to come, that, in turn, will increase the investment lucrativeness of a state and create a conducive atmosphere for industries to flourish. So, what are the factors that are hampering the growth of Maharashtra? What is not working well for the state, among other things, is the perpetual tussle over high taxes between the State Government and the companies. The biggest prick is the Octroi, which is prevalent only in Maharashtra and not in any other state. There is a strong resentment in the industry, which claims that it is needless paperwork and an opportunity for bribery & corruption. What is more, it drives away many professionals and industries that want clean, quick and efficient systems to follow with the least loopholes. Then again, there is a lengthy and tedious land acquisition procedure associated with high land cost. Land and infrastructure are the two most critical limiting factors that are being talked about… these two factors also spell Industrial Parks, which are scarce in the state. There is a perpetual debate between the industry and the government agencies concerning land and they seem to have entangled themselves in a tight knot. The industry wants more parks where they can plug & play, while the government insists that the industry gets into a land grabbing spree by procuring the land at cheaper rates from the government and chooses to keep it idle thus blocking the land… it’s more like horns locked than land locked. Adding woes to the worry is the power situation. The power issue has been hampering the growth prospects of the state for years. There is a big demand-supply mismatch, which incidentally is a popular theme of many high voltage discussions on enhancing the attractiveness of the state. Sadly, it gets limited to only talks and no action. And Maharashtra’s loss is Gujarat’s gain! Gujarat witnessed `2,63,971 crore worth of new investment flows in FY11, which was 16.2 per cent of the total investment in India for the same period. Further, Gujarat attracts most of the investment plans in power, manufacturing and services sector. As compared to that, Maharashtra witnessed new investments worth `97,960 crore, which was six per cent of the total new investments in India during FY11. The first quarter of FY12 saw new investments pick up in Maharashtra and stood at `44,292 crore, which is approximately 15 per cent of the total new investments in India during this period. But all is not lost till hope is lost. It is essential to think of the future of Maharashtra in terms of urban development without neglecting rural development. There is a need for a coherent policy for geographical restructuring of Maharashtra. Such a policy has to address urban issues by developing an understanding of each of the cities in terms of its economy, natural resources for growth & regional setting, physical infrastructure and society. With greatness already prefixed to its name, this Maha State or Maha Rashtra has lots to gain and little to lose. And identifying the problems is the first step towards solving them… And having identified quite a few problems here… the solutions are sure to fetch success for the state as well as the stakeholders!
I
Archana Tiwari-Nayudu archana.nayudu@infomedia18.in
5
CONTENTS Opinions & More
5
EDITORIAL
8
ONE Q, MANY VIEWS Building Brand Maharashtra
10
FACILITATION GUIDELINES Steps For Setting Up Business In Maharashtra
28
‘Maharashtra continues to attract the largest quantum of domestic as well as foreign investments’ Samir Gandhi, Executive Director, Gandhi Automations
12
INVESTMENT PORTFOLIO The Dawn Of A New Era
15
PRIORITY AGENDA What Does It Take To Gain The Prime Position?
18
DEVELOPMENT CHALLENGES AND POLICY PRIORITIES Maharashtra’s Economy @50: Tracking The Evolving Trends
22
GROWTH PARADIGMS Maharashtra & Gujarat: The Two Cogs Steering India’s Growth Wheel
26
COMPETITIVE STREAK Gaining Access To Lost Fortunes
29 General Products Rolling Out The Best-in-class
34 Product & Advertisers’ Index Alphabetical Listing Of Products & Advertisers’ Presented In The Issue
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8
ONE Q, MANY VIEWS
SEARCH - Supplement September 2011
BUILDING BRAND
MAHARASHTRA
With its growing industrial might and huge business opportunities, Maharashtra has shown immense potential to grow. As the state struggles to maintain its pole position, it needs to address a few key issues, which are posing hurdles in the state’s growth trajectory and hampering its growth prospects. With mixed responses, industry experts suggest pointers that the State Government needs to keep in mind to help Maharashtra bounce back to its numero uno position and become the ideal investment destination for investors. PURNA PARMAR
Maharashtra needs a good and stable government. It needs a leader who has a good vision and who is dedicated to ensure that the state regains its manufacturing competitiveness. In addition, the state needs to develop its infrastructure like power, water, roads, especially at the district level, and should also look at improving its public transport systems, especially in the MIDC area in Bhosari, Pimpri-Chinchwad, Pune. The Maharashtra Government also needs to improve the quality of education. Additionally, the State Government should consider abolishing Octroi. – DG Dabke, MD, Jayashree Electron
Maharashtra certainly has a long way to go before it regains pole position. In comparison to Maharashtra, other states, like Gujarat, are faring much better. Maharashtra lacks political will and government support that it needs to build its industrial might. The state also needs better infrastructure facilities. For instance, Mumbai has only one international cargo airport and Pune does not even have a cargo airport. In addition, the state needs to have a special policy for non-conventional sources of energy. This initiative will also help allied industries to flourish in the state. To regain its manufacturing competitiveness, Maharashtra needs to focus on creating infrastructure projects, which will augment the growth prospects of the economy as well as offer a boost to allied industries. – Sunil Raibagi, MD, Güdel India
Maharashtra is an industry-rich state. Doing business here is much simpler as compared to any other state. Apart from the availability of highly skilled labour, the state also has a huge customer base. Moreover, due to the presence of big industries, smaller companies find it easier to set their foot in the state as they already have a ready customer base. But the one factor that is proving to be a bane for the state is Octroi. Octroi points are time consuming and our goods are stuck at these points for hours. This, in turn, hampers our productivity, as we cannot deliver the goods to our customers on time. After the introduction of value added tax (VAT), the government had promised to abolish Octroi. But, so far, there has been no progress on this front, which is very disappointing. In addition, the red tapism and corruption within the government ministry are also some of the major concerns that need immediate attention. – Deepak Sood, Proprietor, Surya Marketing Corporation
SEARCH - Supplement September 2011
ONE Q, MANY VIEWS
Maharashtra never lost its manufacturing competitiveness. In fact, areas like Chakan and Pune have flourished as major auto hubs and many companies have set up base in these areas. Many have this perception that Maharashtra is not growing probably because other states around Maharashtra are simultaneously flourishing. Maharashtra has some very strong advantages like the financial capital – Mumbai – and the ports around it. All these factors add to the competitiveness of the state. There are many other opportunities offered by the state. While land prices have skyrocketed in cities like Pune, the State Government should look into developing areas like Vidarbha, Amravati and other parts of north Maharashtra, which have huge potential to grow. It needs to develop a holistic approach towards building industrial infrastructure. Once infrastructure issues are taken care of, I am sure it will bring in many more companies into the state. – Rajmohan Namboodri, MD, Tox Pressotehnik India
For Maharashtra to regain its manufacturing competitiveness, the State Government needs to look into a lot of factors, especially developing its infrastructure. Major projects need to be welcomed into the state. The best example is that of Gujarat, which has developed its infrastructure and bagged significant investments like Tata, Ford and Peugeot. Maharashtra does not need to work too hard. The state is already blessed with many positives like proximity to the financial capital of Mumbai, ports and sufficient manpower. The State Government only needs to change its focus to rectify the situation. It needs to improve the power situation in the state, offer better facilities to MIDC areas and pursue foreign investors to invest in state projects. – Samir Tungaloy, Regional Manager, Tungaloy India
Industries in Maharashtra face many challenges; the most difficult ones are its tax structure and Octroi policies. If Maharashtra wishes to regain its manufacturing competitiveness, it needs to abolish Octroi. This move will help boost the industrial growth in the state. In comparison to other states in the country, Maharashtra already has good infrastructure facilities like roads and telecommunication. However, it needs to control its land prices. In addition, the power situation in the non-metro regions in the state is deplorable. The State Government must consider improving this sector. For this, it needs to attract more investments into the state. – Chandmal Goliya, Director, Kusam Electrical Industries
There are various factors that can help Maharashtra regain its manufacturing competitiveness. But first, the state needs to redress certain issues like high cost of production. High cost of production is a result of increasing land prices and changing consumer preferences. Today, consumers in Maharashtra are more quality conscious and have high expectations from manufacturers. Companies in Maharashtra find it difficult to survive, as they are attempting to meet these high demands with wafer thin margins. Also, manufacturers do not have the much-needed government support to deal with local resistance, for instance, in places like Ranjangaon and outskirts of Pune. Hence, companies prefer to shift their base to other states. The government, therefore, needs to be more proactive and help companies set up base in the state. Apart from this, the State Government needs to deal with its cumbersome taxation structure. It needs to build a robust financial infrastructure and provide subsidies to help companies grow in the state. If these issues are not addressed immediately, then I am sure that those who came to Maharashtra and had set up industries in the state will eventually return to their hometowns. – Parag Shah, MD, Unique Circle Engineering
9
10
FACILITATION GUIDELINES
SEARCH - Supplement September 2011
STEPS FOR SETTING UP Registrations with competent authority for setting up business in Maharashtra (Industry Specific - IT, Mining, FDA, etc.)
Registration of Business Organisation (Company Setting)
Tax related approvals (TAN, PAN, Sales Tax, Service Tax etc) from Sales Tax and Income Tax offices of the region
Apply to MIDC for Industrial Estates
Apply to District Collector for Govt Land
Get Construction Permits, approvals & NOCs from MIDC or Muncipal Corporation
Apply for Water Supply to relevant Authority (MIDC or Municipal Corp)
Apply for Sewerage and Drainage connection to relevant Authority (MIDC or Municipal Corp)
Apply to the SEZ or Industrial Park developer for land
Obtain Occupancy Certificate from Municipal Corporation/MIDC
Apply for Power to MSEDCL/ Best/Tata Power/ Reliance Infra etc
SEAC: State Level Expert Appraisal Committee, F&ED: Forest & Environment Dept, CRZ: Coastal Regulation Zone, FCA: Forest Conservation Act, TAN: Tax Deduction and Collection Account Number, WPA: Wildlife Protection Act
Apply for Gas to the relevant company (Private or PSU)
SEARCH - Supplement September 2011
FACILITATION GUIDELINES
BUSINESS IN MAHARASHTRA Identification of location for Setting up Business
Obtain Environmental Clearance from MoEF for Category A projects, SEAC, F&ED, GoM for Category B projects (if Applicable)
Obtaining Land and relevant approvals
Private Land (Permission from district collector)
Obtaining CRZ clearances from F&ED (if Applicable)
Apply to Forest & Environment Department for Forest Land
If land falls under UDA limits, apply for Zoning / Zone Change Certificate and apply to District Collectorate for NA permission
Apply for Industrial Safety Permits & Labour Related Approvals from department of Labour and Industrial Health and Safety
Obtain permission under FCA and WPA from competent Authority
Employee welfare Registrations (PF, ESIC etc) from ESIC & EPFO
Industry Specific Approvals (Weight & Measures, Quality Standards, Use of Explosives, Boiler Inspection, etc.)
Source: Maharashtra Industrial Development Corporation (MIDC)
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INVESTMENT PORTFOLIO
SEARCH - Supplement September 2011
THE DAWN OF
A NEW ERA
Maharashtra is trying to revamp its potent prospects through a slurry of industry-friendly policies lately. Fortunately, the recent surge in the investment portfolio has spelt good news for the government machinery and industry at large. While it remains to be seen how the government fructifies the implementation of these slated investments, the upcoming investments are certainly going to drive the state’s growth trajectory in the years to come. Here is a line up of investments that are set to steer the wheels of Maharashtra’s fortunes… PRERNA SHARMA
BIRLA SURYA
5,400
Project: The company plans to invest ` crore in wafer, photovoltaic cells business over a period of five years to set up an integrated facility for fabrication of multi-crystalline silicon wafers and solar photovoltaic cells. Location: Satara, Maharashtra Status: The first phase of the project will involve an investment of `1,493 crore. It aims to make 60 MW of multi-crystalline solar photovoltaic cells and 125 MW of multi-crystalline silicon wafers in a year, it said in a statement.
BEIGI FOTON MOTOR Project: Beiqi Foton Motor, one of China’s leading manufacturers of commercial vehicles, plans to invest ` million) in an assembling plant. The proposed plant is slated to produce 1,00,000 trucks per year.
1,675
crore ($380
Location: Khed district, near Pune Status: In the first phase of production, the plant will manufacture light, medium and heavy commercial trucks depending on the demand of the local market. And in the second phase, other commercial vehicles will be manufactured.
RELIANCE POWER Project: Reliance Power plans to invest `
1,500
crore to develop a 200 mw wind power project.
Location: Vashpet, Maharashtra Description: Once completed, it will be the largest such investment in India by any power generation company at a single location. The project will be developed under a special purpose vehicle of R-Power and can be scaled up to 400 mw. Power generated from the project will be wheeled for distribution in Mumbai by Reliance Infrastructure. The project is expected to be commissioned in phases and reach the full capacity of 200 mw by September 2012.
GE INDIA
700
Project: GE India, the subsidiary of US-based industrial giant General Electric, will invest around ` multi-product manufacturing facility
crore to set up a
Location: Chakan, near Pune Project Status: At the proposed site, the company, among other things, plans to make healthcare equipment, gas engines and also assemble and test wind turbines. GE’s investment at Chakan will get the status of a ‘Mega Project’ under the Maharashtra Government’s industrial policy. The company is in an advanced stage of negotiations with the Maharashtra State Industrial Development Corporation for acquiring about 70 acre.
SEARCH - Supplement September 2011
INVESTMENT PORTFOLIO
13
POSCO Project description: South Korean steelmaker, POSCO, will invest $
600
million (`2,880 crore) in Maharashtra by 2013.
Location: MIDC has allotted 150 acre of land in Vile Bhagad Industrial Area, Raigad Status: According to Gil Ho Bang, MD, Posco India, the galvanising plant is expected to come up by 2012, while the cold-rolled mill will be ready by 2013.
CUMMINS INDIA Project: Diesel engines manufacturer Cummins India is setting up a global technology centre for their research & development projects, which will accommodate over 2,500 engineers. The company is investing around `
337
crore for this centre.
Location: Pune Project status: “We have a modular expansion plan for this global technology centre in mind, which will be completed in two phases. The first phase of the centre will get operational within the next 18 months. Cummins will be investing around $75 million for this centre. This will cater to our global research and development projects across the world. We already a similar centre in China. But this will be bigger than China and over 2,500 engineers will be working here,” said Anant J Talaulicar, Chairman & MD, Cummins India. Additional projects in the pipeline: Cummins is setting up its third plant in Phaltan, which will manufacture engines for commercial vehicles, generators and other industrial applications. This will be operational by the end of 2012. In the initial phase, it will produce 15,000 engines and will ramp up the capacity by 30,000 engines per year. The company also plans to set up 10 small factories at its Phaltan site in Maharashtra to support its three companies viz., Cummins India, Tata Cummins, (JV between Tata Motors and Cummins India, which manufactures low emission diesel engines) and Cummins Technologies India.
KARMA ENERGY Project: The company plans to set up a 60 MW power project at an investment of `
240
crore.
Location: Dhule, Maharashtra Status: For this project, the company will acquire a forest land. The project is expected to be operational by 2013. At present, the company is operating about 33 MW wind power projects in Andhra Pradesh, Maharashtra and Tamil Nadu, with further projects aggregating over 620 MW under various stages of implementation in Gujarat, Karnataka and Maharashtra.
MATHESON K-AIR INDIA Project: The company plans to set up an air separation unit (ASU) plant. The company is investing `
110
crore in this facility.
Project: Chakan Status: The capacity of this plant will be 200 tonne per day and the ASU is expected to be fully operational by December 2012. Kiran Karnawat, MD, Matheson K-Air India, stated, “The Pune ASU will improve the availability and reliability of gas supply that Matheson K-Air India will be able to offer our customers and make us much more competitive. Installation of our first ASU is an important step for Matheson K-Air India that will enable us to become a fully integrated gases supplier to the Indian market.”
14
INVESTMENT PORTFOLIO
SEARCH - Supplement September 2011
HEMPEL Project: Denmark-based Hempel, a global paint maker of marine and protective coatings, inaugurated a `4 crore manufacturing and
100
research & development unit. It is also scouting for land in Maharashtra to set up a `
crore greenfield manufacturing facility.
Location: Nashik Description: According to Umesh Singh, Director, Hempel South Asia, “While Hempel already has a large share of the global market in segments including wind turbines, cranes and infrastructure, India has also seen rapid growth in these segments. We look forward to supplying the protective and marine coatings to the growing markets for these segments in South Asia. In these markets, our goal is to double our 2010 turnover to above €18 million by 2013.”
WILO SE Project: Pump and pumping system manufacturer Wilo SE has developed a hi-tech manufacturing plant. Location: Kolhapur Description: Built at an investment of `100 crore, the new facility will manufacture standardised water handling pumps and pumping systems. It will produce the latest range of Wilo SE products for the domestic market as well as for its subsidiary, Mather & Platt Pumps, for the global market. The company expects a turnover of `150 crore a year from the Kolhapur plant, 80 per cent of it coming from domestic sales. Dr Jochen Oplender, Chairman Emeritus, Wilo SE said that over `200 crore will be invested for the purpose in the next five years. “We also will create job opportunity for 1,000 skilled and semi-skilled manpower by 2015,” he added.
BERU DIESEL START SYSTEMS
30
Project: The company has invested ` crore in a new greenfield facility to manufacture cold starting systems such as glow plugs, grid heaters, glow plug controllers, electronic parts and allied system components for the auto industry. Location: Talegaon Project description: The 51:49 joint venture between the Pune-based Jayant Group and BorgWarner Beru, Germany, will also use the facility to bring the Beru product range in ignition technologies, automotive electronics and sensor technologies as well as ignition products for the heat industry.
GAIL & MIDC JV Purpose: GAIL India and Maharashtra Industrial Development Corporation (MIDC) have entered into a joint venture to lay natural gas infrastructure within the latter’s industrial estates across the entire state. And, with authorisation from the national regulator, Petroleum and Natural Gas Regulatory Board (PNGRB), develop natural gas distribution infrastructure elsewhere, too. Description: The proposed distribution network is expected to benefit the proposed gas-based power projects of 10,000 Mw capacity in the state. As per industry sources, the JV will develop natural gas highways or spur lines for the transmission and distribution of gas in the state from the main line of GAIL or other companies, to the gas consumption centres. The initial authorised share capital of the JV company will be `100 crore. The authorised capital would be increased to meet requirements for further investments, as and when they arise.
BHEL Project: Engineering major BHEL is contemplating setting up a manufacturing facility. Location: Latur Project status: “The Maharashtra Government has evinced interest to offer adequate land for the project. The product would be something allied to thermal power generation,” said AV Krishnan, Executive Director, BHEL (Tiruchy complex). Besides the manufacturing facility in Maharashtra, discussions were on with Maharashtra Power Generation Corporation to install a 660 mw thermal power station in the state. A detailed project report had been submitted to the BHEL Board for a formal approval. It would become operational within 11 months once the Board gives its nod.
SEARCH - Supplement September 2011
PRIORITY AGENDA
15
WHAT DOES IT TAKE TO GAIN THE
PRIME POSITION The state, which has been the industrial vanguard for ages, is now trying to regain its prominent position by strongly advocating its renewed emphasis on industrialisation. Yes, we are talking about the ‘Maha’ state – Maharashtra, which even though abuzz with prospects, it has still not been able to leverage on its competitive streak for several reasons. Call it a sudden political shift of guard or ‘not-solucrative’ policies to attract investors; the state is losing out to its close counterparts. Here’s an attempt to understand what Maharashtra needs to do to regain its pole positions in the years to come… PRERNA SHARMA irst it was Ford, and now, Mahindra & Mahindra, who is trying to locate its manufacturing facility outside the range of Maharashtra. While Gujarat is getting all the attention in terms of investments, it seems Maharashtra is fast falling out of favour with auto companies. Mahindra & Mahindra, the Indian utility vehicle market leader, reportedly revisited its investment plans for the second phase of expansion of its factory at Chakan near Pune. According to reports, the company has expressed displeasure at the State Government deciding to withdraw the value-added tax (VAT) setoff that Mahindra & Mahindra gets for vehicles sold outside the state. The Congress-led government has withdrawn the 12.5 per cent VAT benefit for nearly 70 per cent of vehicles Mahindra & Mahindra sells outside Maharashtra. “We have had several rounds of talks with government officials at various levels. We have been concerned for the past four months. Despite the constant dialogue, nothing has happened. It will be hard for us to look at this state for future investment. We will take a re-look at the second phase of investment at Chakan to see if it still is financially viable for us,” Pawan Goenka, President, Mahindra Auto and Farm
F
Equipment Sector, was quoted in a report. The report also stated that Mahindra & Mahindra was scheduled to make the final part of the `5,000-crore investments in the second phase of expansion at Chakan, where it makes sports utility vehicles and trucks. “We have not seen any big-ticket investment coming into Maharashtra lately. Most have gone to other states,” added Goenka. It can be recalled that another Chakan-based Indian auto company, Bajaj Auto, had announced that they were moving out of Maharashtra after a tussle over taxes with the State Government. Similarly, there is a long list of big bang projects that have brought about a sudden diversion in the investment portfolio of the state. Despite having a significant presence in the state, Tata Motors preferred Gujarat for its Nano project and not Maharashtra; Videocon Group had to scrap the SEZ project in Pune following strong opposition from locals for land acquisition and Dow Chemicals also suspended its research project in Chakan industrial estate. Talking of investment scenario, a total of 796 industrial projects with an investment of `1,51,209 crore and proposed employment of 2,25,710 were approved during September 2009 to August 2010. During the same period, 36 projects with an investment of `8,673 crore and employment of 9,458 were commissioned. Discussing the performance of Maharashtra,
Milind Shahane, VMH Director & EVP, Voltas said that the state’s performance in the area of manufacturing growth in the past few years has been mixed. “While the state has witnessed an increase in investments in manufacturing, it still lags behind other states like Gujarat, Tamil Nadu and even Chhattisgarh. The state is still an attractive destination for manufacturing, but there are several issues, which need to be redressed if the growth is to be sustained.
REASONS GALORE… But why do investors prefer other states over Maharashtra? There are plenty of reasons… the biggest bottleneck in the path to progress for the state is the land acquisition procedure followed by the ageold concept of Octroi. Commenting on why the state is witnessing a decline in investments, Shahane informed, “The main reasons are high cost of land, which ranges from `50 lakh to `2 crore per acre in prime areas close to the city, high wages near urban sectors and high taxes by way of property taxes as well as stamp duty on land & other legal documents. In addition, the cost of inputs like power and water are also on the higher side as compared to other states. Further, there are other problems related to local taxes like Octroi, which are prevalent only in Maharashtra and not in other Indian states.”
16
PRIORITY AGENDA
SEARCH - Supplement September 2011
Action Plan For sustaining the manufacturing growth, the State Government should lay emphasis on: Abolishing Octroi Reducing power cost Ensuring continuous availability of power without load shedding Making industrial land available through MIDCs Granting approvals for setting up factories from factory inspectors & other concerned authorities. Improving the road infrastructure by having wider all-weather roads, which can facilitate quick transportation of materials & finished goods to various areas Taking up development of technical skills through emphasis on technical training institutes like ITIs, polytechnic, etc., to give skilled manpower for manufacturing activities. THE UNATTENDED AGENDA The Maharashtra Industrial Policy 2006 was in effect till March 31, 2011. Nearly five months have passed and there are no clear signs of a new manufacturing policy. If official sources are to be believed, it has been indicated that the policy should be unveiled by the end of this year. According to official sources, the state is working on an industrial policy to tap new avenues to boost investment and generate employment. While the mega project incentives in the policy had worked successfully and enabled the state to attract global giants like General Motors, Skoda and Volkswagen, the other ingredients of the policy, such as implementation of the Golden Quadrilateral and labour market information cell, remained relatively neglected. “Hence, the speedy and time-bound implementation of the proposals already existing in the earlier policy should get the priority they deserve. The new policy should focus on facilitating business, especially for the Micro, Small and Medium Enterprises (MSME) sector, which is the backbone of the state’s industry. Further, the policy should lay emphasis on transparent and stakeholder-friendly policy and procedure for land acquisition,” Shahane averred. Needless to say that land availability for industrial growth has always been a concern in Maharashtra. According to estimates, there are about 40,00050,000 closed units in the state. The new policy will look into unlocking the massive areas on which these units stand.
Next on the agenda is sick unit rehabilitation. The State Government seeks to join hands with the Prime Minister’s task force proposal on the same and take it further to the implementation stage. Apart from these, the e-biz initiative will become fully operational under the new policy. So far, information could only be filed on most government websites. But now, the state wants complete digitisation of the backend. This means that people can track the status of their applications online. Industrial sickness is one of the major hurdles in the growth of the economy as it affects capital assets, productivity and employment. The Board for Industrial and Financial Reconstruction (BIFR) was formed by the Government of India under Sick Industrial Companies (Special Provisions) Act, 1985. There are 919 cases for rehabilitation of medium and large scale industries with the Board from the state up to November, 2010. Of these, 169 cases are sanctioned for rehabilitation, 140 cases are recommended for winding up, 376 cases are rejected, 96 cases are out of the state, 133 cases are pending while five cases are in the court of law. ‘Udyog Mitra’, a dedicated body for the systematic facilitation and monitoring of investments is proposed to be set up.
PEAKING POWER PROBLEMS As raised by many industry players in the state, power issues have been hampering the growth prospects of the state for years. There is a big supply-demand mismatch,
which has left industry players anxious. This is probably one of the biggest reasons why many new entrants and existing players are diverting investments out of Maharashtra. In a recent statement, the state, which currently has the highest electricity charges among all Indian states for industries, is planning to lower it, in its bid to regain pole position and attract investors to set up industries. The state energy department has proposed cutting tariff for industrial consumers by 8-9 per cent, or 40-60 paise per unit; while in Gujarat, it is far lower at `3.90 and `4.20 per unit and in Punjab, charges are between `3.75 and `4.95 per unit. Gujarat attracted investments worth `8.59 trillion between August 1991 and August 2010, according to Maharashtra’s Economic Survey for 2010-11. Maharashtra is way behind with `6.95 trillion worth of investments being committed to the state for the same period, while Andhra Pradesh is a close third, with `6.94 trillion.
LABOUR ISSUES During 2010, the state witnessed around 16 strikes and lockouts, which affected 4,002 employees. The number of persondays lost due to work stoppages (including continuing work stoppages of the previous year) was 27.12 lakh. Around 31,910 closed small-scale industries affected 1,60,622 workers, while 418 medium- and large-scale industries were closed, which affected 58,408 workers in the state up to March 31, 2010. The increase in the closure of small scale industry (SSI) units may be mainly due to power shortage, worldwide recession in the economy and competition. While these are no less than startling stats, in order to gain an upper hand, the state needs to devise labour-friendly policies. The upcoming industrial policy hopes to clear the air from these pending issues.
ADOPTING BEST PRACTICES While the much awaited industrial policy has taken a centre stage of discussion, the State Governent machinery is making sure that the best practices are implemented to lure investors. On these lines, Sachin Ahir, Minister of State for Industries,was quoted at saying, “We are giving final touches to the new policy. We have drafted it after carefully studying the industrial policies of at least half-a-dozen states. Our policy will be entrepreneur-friendly and will encourage
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PRIORITY AGENDA
new industrialists to set up their units in our state.” While drafting the new package scheme of incentives, the concentration of the government has been on major projects, involving an investment of `500 crore and more. Now, it has been proposed to give concessions to the small sector as well. The government is critically examining all the concessions that can be offered to industries. Apart from this, there is a continued emphasis on encouraging investment in backward areas and giving impetus to MSMEs. In fact, the MSME Policy of the state is being contemplated to be made into a subset of the state industrial policy, thus extending further incentives like interest subsidies to such units in backward areas. As far as ensuring eco-friendliness in the state is concerned, of the total 72,762 industries under the purview of the Maharashtra Pollution Control Board (MPCB), 16 per cent were air pollution prone, 20 per cent were water pollution prone and seven per cent were hazardous waste prone industries at the end of March, 2010. During 2009-10, MPCB had issued directions to 1,148 industries under Section 33A of Water (Prevention and Control of Pollution) Act, 1974, and to 349 industries under Section 31A of Air (Prevention and Control of Pollution) Act, 1981. Common effluent treatment plants are being commissioned in 28 industrial areas covering 7,431 industries of the state. Apart from these efforts, bank guarantee was taken from certain industries and electricity & water supply of few polluting industries was disconnected until pollution control measures were implemented.
years. For enhancing industrial activities in the low Human Development Index (HDI) districts such as Dhule, Gadchiroli and Osmanabad, the emphasis should be on the mapping of resources (forests, minerals) available in these districts. Some feel that the State Government lacks implementation and commitment, which is why industrialisation is taking a backseat in the state. Had the government been prompt, the scenario would have been different and Maharashtra would have been way ahead of its competitors. Having said that, the top priority should be to address issues as far as land, water and power is concerned. The government should also focus on eradicating red-tapism and delays in granting approval to projects. Shahane said that the priority agenda for the State Government and industry to take Maharashtra to a premier position would relate to working jointly to address the above issues and make it more attractive for manufacturing investments. The industry needs to make a representation to the government and take up the issues, he stressed. For sustaining the manufacturing growth, the State Government should lay emphasis on abolishing Octroi, reducing power cost, ensuring continuous availability of power without load shedding, making industrial land available through MIDCs and granting approvals for setting up factories from factory inspectors & other concerned authorities. In addition, the state also needs to improve the road infrastructure by having wider all-weather roads, which can facilitate quick transportation of materials & finished goods to various areas. The government should also look at taking up development of technical skills through emphasis on technical training institutes like ITIs, polytechnic, etc., to give skilled manpower for manufacturing activities. Though at first glance, the industrial prospects of the state are not so bright, in order for the state to regain its lost glory, the government needs to tighten its policy framework and come out with a new manufacturing policy that would not only be a tool to attract investment, but also help in sustaining the growth momentum of companies. It is hoped that the muchawaited new industrial policy will not only ensure that Maharashtra retains its premier position in foreign direct and domestic investment, but also halts the migration of new entrepreneurs to neighbouring states.
RENEWED THRUST ON SEZs While the numbers may suggest that Maharashtra’s progress is way ahead of its counterparts in terms development of SEZs, the reality is quite different. The biggest roadblock has been land acquisition, which has often led to cost escalation of projects or forced investors to withdraw from the state. The state, which has hoped for employment generation of up to 65 lakh through SEZs alone, reckons that it is now ‘mission impossible’. With the renewed thrust on the fast track development of SEZs, sources from the industry department inform that the thrust will be on tapping potential sectors
While the state has witnessed an increase in investments in manufacturing, it still lags behind other states like Gujarat, Tamil Nadu and even Chhattisgarh. The state is still an attractive destination for manufacturing, but there are several issues, which need to be redressed if the growth is to be sustained. MILIND SHAHANE, VMH Director & EVP, Voltas
for economic growth and employment generation. What has worried the ministry is that investors of 16 SEZs, approved by the Central Government and State Government, have withdrawn their proposals in the past few months. “The SEZ-driven industrial policy needs to be abandoned and an alternative explored,” said the source. The state has received 233 SEZ proposals up to December 31, 2010. Of these, 143 SEZs were approved by the Central Government (formal approval – 105 & in principle approval – 38), while 63 of them are notified SEZs. On the steady withdrawal of SEZ proposals, particularly by the state-run Maharashtra Industrial Development Corporation (MIDC), Ahir said that it appears that several states were witnessing a similar trend. When the SEZ concept was launched in 2004, it received a tremendous response for four years, but due to the worldwide recession post 2009, it witnessed a major setback. “They are banking on exports, but due to the slowdown, there was no scope for exports, particularly in targeted countries. Under such circumstances, the developer had no option but to wind up the proposal,” Ahir said, adding that, it had been proposed to develop a domestic tariff area for such SEZs, “but they may not get concessions meant for SEZs, even though they could be considered under the package scheme of incentives”.
THE PRIORITY AGENDA Industry experts are of the view that the state should now enact the SEZ legislation, which has been pending for more than five
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DEVELOPMENTAL CHALLENGES
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MAHARASHTRA’S
ECONOMY TRACKING THE
EVOLVING TRENDS Maharashtra has turned 50. While it is true that the state has held its fort as one of the leading states as far as development is concerned, the development that it is witnessing is extremely uneven and in spurts. The cities in Maharashtra are experiencing differential growth rates. However, more than the growth rates, issues surrounding the deteriorating quality of life in all cities are of major concern. For Maharashtra to lead the development of the country, it has to get its basics right; it has to focus on urban development without neglecting rural development. he economic opportunities before a state during the post-reform era would depend on the different development opportunities confronting a state and its ability to exploit them. Assessing the impact of economic reforms at the state level may facilitate deeper assessment of the effect of such reforms at the ground level. While the documentation of policy reforms by different states is difficult, as the state and other levels of local governments play an important role in the delivery of services, the efficacy of such measures would be reflected in the record of performance. For example, sales tax reforms, if successful, should be reflected in larger revenue generation.
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ECONOMIC REFORMS PROGRAMME DURING PRE-REFORM ERA The economic reforms programme could provide increased leeway to private initiatives guided by competitive markets; and states like Maharashtra, generally
considered a relatively advanced progressive state, would benefit more as compared to other less developed states. In fact, the likely adverse impact of deregulation and competition on less developed states was a concern. The assessment of what happened during the post-reform period reflects a mixed picture. The accelerated growth in the state gross domestic product (GDP) and per capita state GDP show that reforms led to improved growth opportunities and the state was able to exploit them. However, the decline in poverty ratio was slower in the post-reform era, which indicated that the distribution of growth had not kept pace with increased growth. This deficiency may be may be traced to agriculture where production has slowed down in comparison to the other states in India. Deceleration in infrastructure, particularly village roads, would also go some way in explaining lower diffusion of growth benefits. Ironically, agriculture, road and power generation are segments, which have state-level policies and maximum funds deployed. Hence,
these sectors in the state could have performed much better and thus, improved the distribution of growth effects. In the recent years, the budgetary position of the Maharashtra Government was guided by a rule-based fiscal regime as stipulated in its respective fiscal responsibility legislation (FRL). Consequently, the finances witnessed improvements in terms of reduction in key deficit indicators. Notwithstanding, there is evidence of highdebt profile, lower social sector and growthoriented expenditure and stagnation in non-tax revenue. Above all, the pace and quality of fiscal correction and consolidation is an issue which needs to be addressed. The onset of the ‘economic crisis’ and its knock-on effect on the Indian economy necessitated a countercyclical fiscal policy. This led to considerable deviation from the recent improvement in the budgetary position. As a result, the targets enacted in FRL to eliminate revenue deficit in 2008-09 and to attain a fiscal deficit three per cent of Gross State Domestic Product (GSDP) suffered a serious setback. These
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developments have further posed a serious challenge in terms of countercyclical, fiscal architecture and underlying structural weaknesses in the financial position of the State Government. In view of the foregoing, an attempt has been made to undertake a study of the finances of the Maharashtra Government. The objective of the study is to review the finances of the Maharashtra Government over the years with a view to assessing the sustainability of its finances. While doing so, an attempt will also be made to flag the emerging issues, particularly in the context of revised architecture of FRL.
DEVELOPMENTAL CHALLENGES
has been placed on the manner in which the existing inequality at the sub-regional level impacts the ability of economic growth to reduce poverty. Understanding the diversity in the magnitude of this issue might yield important policy prescriptions. In particular, such an approach might be able to draw attention to the pre-existing inequalities and the importance of managing regional inequality along with raising the standards of living. Regional Inequalities and Demand for Separate Statehood A closer examination of backward regions in each state will indicate specific reasons for their backwardness. The major cause of backwardness of Vidarbha & Marathwada in Maharashtra, Rayalaseema and Telangana in Andhra Pradesh and Northern Karnataka is the scarcity of water due to lower precipitation and lack of other perennial sources of water. The GSDP per capita from the secondary sector shows higher variability across regions and this variability has risen significantly. Investment requirements in primary education and primary healthcare are not as heavy as in the capital-intensive physical infrastructure, and the results in terms of improving literacy rate & life expectancy at birth are relatively quick. However, the rise in public expenditure in these sectors has been very slow. This is reflected in the smaller decline in regional disparities in Mumbai, which has secured top position with a human development index (HDI) value of 1.0; while Gadchiroli district has the lowest HDI value of 0.21. The state HDI average value was estimated to be 0.58. There were
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The need for geographical reorganisation emanates from imbalances in economic development. The reasons for imbalances could be both, manmade and natural. For example, the development of metros, state capitals and district headquarters, etc., is attributable to natural factors, whereas under development due to backlog in public investments like Vidarbha, part of Telangana, etc. could be man-made.
HUMAN DEVELOPMENT & EMPOWERMENT
Inequalities, Economic Growth and Public Policies for Human Development Maharashtra is widely recognised as a state REGIONAL IMBALANCE AND that has shown consistent economic INEQUALITIES growth. However, the socio-economic The budgetary performance of a state in inequalities prevalent in the state have market-oriented plan finance is extremely constrained the improvement of human important and Maharashtra has progressed development indicators. very well in terms of fiscal correction and Agenda for Maharashtra’s Health Sector consolidation under the framework of fiscal Health essentially is a state subject, but legislation. While, fiscal restructuring will Maharashtra has no stated health policy or continue under the medium term financial vision document. Although a middle order plan (MTFP) framework, the state may state in terms of health, the state hides a consider creating fiscal space by augmenting bimodal distribution of health indicators their resource mobilisation. Furthermore, with a dominant metro-urban sector. the reorientation of expenditure allocation Maharashtra’s total fertility rate (TFR) has towards growth-oriented and social sector declined to near ideal levels, but the state expenditure needs urgent attention. In faces critical demographic challenges like social infrastructure, the emphasis would be urban migration without support on primary education, primary health, social infrastructure, declining sex ratio, early security and to some extent, law and order. marriage & childbearing after marriage and These activities are in the state’s domain. In rising life expectancy without social and growth-oriented expenditure, especially, healthcare support. Though maternal physical infrastructure, the authority should mortality ratio (MMR) and infant mortality emphasise on water supply (for drinking rate (IMR) have declined substantially, there and irrigation) drainage, roads, power remain pockets of high IMR and MMR. supply, medium and minor Malnutrition is a hardcore ports, etc. Below are enlisted problem, with low weight for There is an incremental requirement for about 753 some of the factors that have age, stunting, wasting, low Body thousand teachers and trainers till 2022. A portion brought about regional imbalance Mass Index (BMI) among men of this requirement would be driven by industry and inequalities in the state. and especially women that can They include: nearly redefine poverty levels. demand – as in the case of vocational training. Poverty Reducing Elasticity of The rising BMI among high Also, there would be an increasing requirement for Growth income & urban strata is also a higher education as demonstrated by the increase In India, there is a growing problem. The old illnesses like in enrolment rates into higher education. concern that the overall tuberculosis (TB) and malaria improvement in the income remain and so do new epidemic level was not evenly distributed across threats like swine flu. The rising burden of totally 19 districts in the state, which had different regions. In many earlier studies diabetes, hypertension, heart disease and lower values of HDI, than the state average. too, researchers have expressed concern cancers imply long stays in hospitals, There figures clearly indicate huge disparities over the rising inter-personal economic disability and financial burden. The in the socio-economic development of the inequality. Regional inequality has also been healthcare system is widely split. An ailing state. Since human development has a a grave concern. public health sector is struggling to keep its positive impact on GDP growth, inadequate In Maharashtra, there have been several institutions intact through budget crunches, attention to this sector in the poorer regions discussions over reducing regional economic human resources depletion, governance could also be responsible for the rise in disparities. However, not much emphasis issues and a crisis of confidence. On the regional disparities.
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DEVELOPMENTAL CHALLENGES
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other hand, the dominant private health Ministry of Labour and Employment, with depends on the efficacy of the gram sector widely ranges from quacks to high the All India Council for Technical Education panchayat. Further, it is expected that the tech super-specialties. The rural and urban (AICTE) as the regulatory body and the sarpanch would play a crucial role in ‘informal’ sector people are facing Directorate General of Employment and providing these services by her or his deprivation, thanks to distances, costs, poor Training (DGET) and National Council for initiative and interest. quality of care and lack of social support. Vocational Training (NCVT) being This paper tries to look at the relationship Maharashtra needs to put its demography responsible for developing and implementing between the gender of the sarpanch and on track, reduce malnutrition, empower the programmes for vocational training. the availability of services. The relationship consumers, launch public health Maharashtra, the industrial hub of India, between the political participation of programmes to lower morbidity and foster has made considerable progress in the last women and the gender of the sarpanch has policies and schemes that make primary to decade with respect to a number of also been examined. tertiary rational care available and affordable education indicators. It stands second in the To this end, 32 villages from Sangli district to all with the help of social insurance. The major states having literacy rate above the have been surveyed, where 16 villages state direly needs a vision document, national average. It has a well developed have female sarpanchs and 16 have male strategies and some road map. In the short educational infrastructure, but still stands sarpanchs. Twenty women each from these run, the state can work on good primary sixth in terms of the Composite Educational villages have been interviewed, thus forming care through trained paramedics, promote Development Index. a sample size of 640. These women were affordable generic drugs, expand AYUSH There is an incremental requirement for asked questions regarding the quality and services and encourage local village bodies about 753 thousand teachers and trainers quantity of the basic services available to and panchayats to operate health units. For till 2022. A portion of this requirement them and their political participation at the this, the state needs coherent actions from would be driven by industry demand – as in village level. The survey’s preliminary results departments such as health, urban & rural the case of vocational training. Also, there revealed that the availability of the services development, medical education and also would be an increasing requirement for is not significantly affected by the gender of professional associations. This is the true higher education as demonstrated by the the sarpanch. However, the political political & administrative agenda for health increase in enrolment rates into higher participation of the women respondents for Maharashtra. education. from female sarpanch villages is Does Having a Female Sarpanch Help the However, despite these initiatives, the significantly higher than that from the male Women? state would continue to witness significant sarpanch villages. India took an important step towards drop-out rates between Class I-X and Class HIGHER EDUCATION AND attaining ‘substantial’ democracy when it I-XII. Though this might decline by 2022, it SKILL DEVELOPMENT passed the 73rd amendment in 1993, would continue to remain a challenge. This Education and skill development sector which put in place the elected gram implies the need to strengthen the comprises of primary education, secondary panchayat at the village level. One of the ‘vocational education’ stream. Thus, it is education, higher education and industrial/ important features of this amendment was required to equip those who drop out of technical training, including vocational to give reservation to the Scheduled Castes, mainstream education with adequate training. Skill development, in general, Scheduled Tribes and women. With respect vocational skills and life skills. This would means the development of marketable skills to women, the amendment states that 33 further increase the demand for teachers in an individual. But it has come to be per cent of the gram panchayat seats should and trainers. Given this context, it is required be reserved for women and 33 that technology and other per cent of the sarpanch seats innovative means of teaching It is essential to think of the future of Maharashtra i.e. the head of the gram content or training delivery be in terms of urban development without neglecting panchayat, should be reserved adopted. Even with these factors rural development. There is a need for a coherent for a woman. This was indeed a in mind, and considering the policy for the geographical restructuring of crucial step considering the low formal education and skill Maharashtra. Such a policy has to address urban status of women in India and development/vocational training their consequent low sector alone, we expect that the issues by developing an understanding of each participation in public life. demand for teachers and trainers of the cities in terms of its economy, natural The purpose of this research would continue to the extent of resources for growth & regional setting, physical paper is to examine if the training 75.3 thousand teachers infrastructure and society. reservation of women for the and trainers annually. post of sarpanch has had any URBANISATION IN equated with the vocational or technical significant impact on the availability of basic, MAHARASHTRA education/training for the manufacturing/ public services to women, especially with Urban Maharashtra at 50: Issues and industrial and services sector in the recent respect to the services that women are Prospects past. In India, though various aspects of supposed to value the most. It is the Maharashtra was considered the most education, from primary to higher education responsibility of the gram panchayat to developed state at the time of independence fall under the ambit of the Ministry of provide basic public services like drinking due to its higher percentage of urban Human Resource Development, skill water, toilets, gutters, etc. to the villagers. population. In 2001, the state of Tamil Nadu development falls under the purview of the Thus, the wellbeing of the villagers greatly
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overtook Maharashtra as far as urban development was concerned. The urban population registered in Tamil Nadu was 43.86 per cent as against Maharashtra’s 42.40 per cent. There were 880 cities in Tamil Nadu as against 378 in Maharashtra. The urban structure of Maharashtra is highly polarised as compared to that of Tamil Nadu with a large number of metropolitan cities concentrated around Mumbai, while the rest of Maharashtra lags behind in urban growth. The changes in the urban structure of Maharashtra and its effect on unequal development need closer attention if Maharashtra is to retain its leadership position in the ensuing decades. Issues of Urban Development Cities in Maharashtra are experiencing differential growth rates. However, more than the growth rates, issues surrounding the deteriorating quality of life in all cities are of major concern. The importance of urban development has still not been understood by the political parties and intellectuals in Maharashtra. Most of the urban quality issues are drowned in the shrill voices of political, social and environmental activism and concerns about rampant corruption. The real issues involved towards ensuring healthy and sustainable urban development are neglected. The most developed metropolitan region of Mumbai, which is also the financial capital of the nation, is suffering from severe socio-economic & political crisis and erosion of its image as the most advanced city in India. It is not that solutions and means of addressing them are not known, but the political will to understand and address them with bold decisions on the matters of urban governance reforms are missing. In spite of large financial help received from the Central Government through JNNURM initiative, the basic problems of reforming legal framework, governance, infrastructure and urban planning and delivery remain neglected.
NEED FOR PARADIGM SHIFT IN ADDRESSING DEVELOPMENT It is essential to think of the future of Maharashtra in terms of urban development without neglecting rural development. There is a need for a coherent policy for the geographical restructuring of Maharashtra. Such a policy has to address urban issues by developing an understanding of each of the cities in terms of its economy, natural
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resources for growth & regional setting, physical infrastructure and society. Understanding each city in its context and developing an effective & responsible local governance mechanism would be the key to healthy growth. Decentralisation of local urban governance as envisaged in the 74th constitutional amendment needs to be followed in spirit and not just in letters. More than anything else, serious debates about urban growth and development of Maharashtra are needed at many levels in society and in the government & academic circles. Institutions such as Maharashtra Economic Development Council (MEDC) have an important role to play in preparing urban Maharashtra.
RECOMMENDATIONS BY EXPERTS Speedy implementation of GST Introduction of user charges in education, health & veterinary services and improvement in the delivery of these services Transparent formula for open market borrowing on the lines of current transfer Appointment of a debt adviser to prepare a cash flow statement, a calendar for market borrowing, a health card for the use of credit rating agencies to calculate inter generational equity Reorientation of expenditure in order of priorities, for example, enhanced allocation for growth-oriented and social sector expenditure For just and equitable distribution of HDI funds, the following new formula has been suggested: d X 20% funds = Allocation to the district. Σd1 Where, d = 1.0 – HDI value of district; Σd = total of differences. The important key for the development of any state is equitable budgeting and region-specific budgetary allocation for sustainable development Inequality-adjusted HDI demonstrates the need for disaggregated analysis of human development across districts The diversity in human development outcomes since 2002-03 hints at the need to strengthen public policies for broader intervention that would stabilise livelihoods, education, health and welfare of gender & social groups Improvements in the ranking of Nagpur and Pune due to improvement in
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education and health outcomes hints at plausible links between the human development-economic growth (HD-EG) chain Need to reorient public spending and target human development-related sectors in a consistent fashion To put demography on track, focus needs to be given to social campaigns on declining sex ratio, techno-legal solutions, like in Kolhapur, use of birth spacing, increase age of marriage & child birth Convert 10,000 health sub-centres into AYUSH dispensaries In the primary sector, upgrade all health sub-centers as AYUSH dispensaries Need to encourage village bodies and panchayats to operate these health units with the help of teleclinics and cell phones, enormous possibilities await the state in this sector. This will take about `500 crore annually and will expand and deepen the reach of public facilities enormously in one stroke. It will change the scene of healthcare in the state To start with, Maharashtra can even use available paramedics (three in each subcentre) creatively to upgrade the health sub-centres Launch public health programmes for cardiovascular diseases, diabetes, smoking and addictions, obesity, road accidents, malnutrition, etc. Promote affordable drugs, standard protocols, promote generics, inform consumers and rationalise drug prices Affordable healthcare, empower & inform consumers, promote low-priced hospital services through public private partnerships, more public hospitals, promote risk pooling/social insurance, improve pre- and post hospital primary care For urbanisation, there is a need for a paradigm shift. Accepting and addressing urban issues of Maharashtra on a priority basis, redefining urban categories to include mega, metro cities, towns, periurban areas, reforming legal framework for urban governance and planning, reforming urban infrastructure sector, developing urban reform agenda through debates, creating manpower to tackle the urban development. Courtesy: Maharashtra Economic Development Council
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&
G
THE TWO COGS
STEERING
INDIA’S
R A T J A
R A S H A T H R A
U
A
GROWTH WHEEL
M Maharashtra and Gujarat have remained at the forefront in the areas of industrialisation and investment due to their investor-friendly climate. Their unique characteristics such as infrastructure and strategic location have made them the two most favourable investment destinations along the western coast. In order to boost investment in infrastructure projects, Gujarat enacted the Gujarat Infrastructure Development Act to provide private players a framework to participate in the construction, finance and maintenance of the infrastructure projects. Maharashtra, on the other hand, has a strong presence in pharmaceuticals, automobiles, petrochemicals and financial services segments. But if it needs to attain the No. 1 position, the State Government has to make its policy framework more dynamic and appealing to private players. he Indian economy is one of these states has its own unique Gujarat attracts most of the investment of the fastest growing characteristics that encourage and attract plans in power, manufacturing and services economies of the world. investors. However, it is the policy sector and in FY11, the state witnessed This rapid expansion has framework and regulatory environment `2,63,971 crore worth of new investment raised entrepreneurial that truly affect the investment climate in a flows, which was 16.2 per cent of the total interest multifold in our state. investment in India for the same period. states. In this scenario, it becomes Maharashtra, on the other hand, crucial for the State Government to witnessed new investments worth FY10 (`) FY11 (`) April-June FY12 ensure good governance and `97,960 crore, which was six per cent Gujarat 1,20,761 2,63,971 9,728 encourage entrepreneurial participation of the total new investments in India Maharashtra 1,70,038 97,697 44,291 by adopting dynamic policies. The during FY11. The first quarter of FY12 Orissa 70,562 1,71,273 25,565 unique positioning of each state can saw new investments pick up in Andhra Pradesh 93,995 1,13,236 8,919 potentially spur the growth of business Maharashtra and stood at `44,292 Karnataka 3,26,950 1,01,706 6,815 activities in a state. Gujarat, Maharashtra, crore, which is approximately 15 per All India 16,63,127 16,29,732 2,88,076 Orissa, Andhra Pradesh and Karnataka cent of the total new investments in Source: CMIE have been India’s most favoured India during this period. The services investment destinations in FY11. Each and the real estate sectors attracted Table 1: New investment (` crore)
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GROWTH PARADIGMS
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majority of the new exporter of software. This sector accounts At Constant FY06 FY07 FY08 FY09 FY10 investments. The for 20 per cent of India’s total software Prices total new exports. Further, Maharashtra accounts for GSDP (` crore) 4,73,801 5,40,750 5,99,062 6,45,492 7,01,550 investments in 13 per cent of the thermal production and Growth Rate 14.5 14.1 10.8 7.8 8.7 Orissa rose to 17 per cent of the nuclear production in the Share in GSDP (%) `1,71,273 crore in country. Primary Sector 10.1 9.8 10.0 8.9 8.4 FY11, which was Gujarat, on the other hand, illustrates a Secondary Sector 31.1 31.4 30.8 29.9 29.9 10.5 per cent of lower share of 7.4 per cent in India’s GDP Tertiary Sector 58.9 58.8 59.2 61.2 61.7 the total new at `3,31,622 crore as on FY10; of which Growth Rates (%) investments in `1,56,542 crore is generated from the Primary Sector 9.2 10.7 13.2 -4.1 3.1 India, while that of services sector. The per capita income (at Andhra Pradesh constant prices) of the state stood at Secondary Sector 19.7 15.4 8.6 4.7 8.5 increased 20 per `57,267 in FY10, which is also higher than Tertiary Sector 12.8 14.0 11.6 11.4 9.6 cent to `1,13,236 the national average for FY10. Source: Government of Maharashtra Table 2: Sectoral break up for Maharashtra crore in FY11. The growth of Gujarat’s services sector P o w e r , has been manufacturing and remarkable and At Constant FY06 FY07 FY08 FY09 FY10 Prices (`) (`) (`) (`) (`) agriculture saw majority of the investments. can be attributed Karnataka, however, witnessed a decline in to its growing GSDP (` crore) 2,33,776 2,53,393 2,81,273 3,00,847 3,31,633 new investments to `1,01,706 crore in industrial activities. Growth Rate 14.9 8.4 11.0 7.0 10.2 FY11, as against `3,26,950 crore witnessed The growth seen Share in GSDP (%) in FY10. The manufacturing sector accounts in the manufacturing Primary Sector 17.2 15.8 15.4 13.3 12.1 for a prominent share in the new sector is largely Secondary Sector 39.9 40.3 40.2 39.8 40.7 investments in the state. attributable to the Tertiary Sector 42.9 44.0 44.4 46.9 47.2 Maharashtra and Gujarat are two of the prosperity of Growth Rates (%) most preferred investment destinations on Gujarat. The state Primary Sector 23.1 -0.7 8.7 -7.9 0.5 the western coast. While Maharashtra is the has over 3,12,000 Secondary Sector 14.6 9.4 10.8 5.9 12.6 third largest state in terms of area and the small and 2,200 Tertiary Sector 12.3 11.1 12.0 13.1 10.9 second largest in terms of population in m e d i u m Source: Government of Gujarat India, Gujarat is home to various enterprises and is Table 3: Sectoral break up for Gujarat topographical features and landscapes. Both thus, increasingly the states are considered to be the most recognised as the FY06 FY07 FY08 FY09 FY10 successful industrial states of the country. hub of Loan Amount 5,366 7,322 10,593 12,750 19,859 Maharashtra has a strong presence in manufacturing (` Crore) pharmaceuticals, automobiles, activities. The Annual Growth (%) 36.5 44.7 20.4 55.8 petrochemicals, financial services and media SMEs segment Source: MSME Gujarat 2015, Banker’s Perception & entertainment. Gujarat, on the other contributes over Table 4: Advances to the SME segment in Gujarat hand, has a constantly growing manufacturing 30 per cent to the sector with the small and medium enterprises total manufacturing activities. Crops cultivated in large quantities (SMEs) sector playing a significant role. The sector and exports of Gujarat. As per the in Maharashtra are groundnut, sugarcane, agriculture sector is the backbone of Gujarat’s MSME census 2006-07 conducted by the mangoes, turmeric, grapes, bananas, economy. Rapid growth in agro-technology MSME Ministry, Gujarat has 14.8 per cent oranges, wheat and rice. The secondary and food production has immensely helped of the total micro, small and medium and tertiary sectors generate more income in boosting the state’s manufacturing and enterprises (MSMEs) working in India. for the state. While agriculture has not services sector. Further, according to a survey conducted by made the state self-sufficient in food grains, the Associated Chambers of Commerce STATE OF THE ECONOMY the tilt towards commercial crops has given and Industry of India (ASSOCHAM), the Maharashtra accounted for more than 15.6 rise to a vibrant agro-processing industry SMEs are expected to contribute around 22 per cent of the Indian gross domestic though mostly limited to sugarcane, to per cent of India’s GDP by 2012 from the product (GDP) in FY10, while its gross state some extent cotton and lately, fruits & present level of 17 per cent. domestic product (GSDP) at constant prices vegetables. Mumbai, the capital city of Table 4 illustrates the growth in the loan for FY10 stood at `7, 01,550 crore; of Maharashtra, is considered to be the amount given by Gujarat to the SMEs which `4,76,855 crore was generated from financial hub of India and houses various segment. FY08 witnessed a growth of 44.7 the services sector. The per capita income prime financial houses in the country such per cent in the loan amount to `10,593 at constant prices of the state at `63,497 in as Bombay Stock Exchange, National Stock crore and FY10 witnessed a growth of 55.8 FY10 is much higher than the national Exchange and the Reserve Bank of India. per cent to `19,859 crore in the same year. average of `46,492 in FY10. Around 64.14 The IT sector in Maharashtra has also The adjusted net bank credit to the MSME per cent of Maharashtra’s workforce is witnessed tremendous growth and has put segment in Gujarat increased 8.3 per cent engaged in agriculture and other allied the state in the position of the second largest in 2006 to 15.1 per cent in 2010. This was
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GROWTH PARADIGMS
SEARCH - Supplement September 2011
made possible by the Electricity generation & It can be deduced that though Maharashtra and tremendous support provided telecommunication Gujarat are leading states in their own respective by the Government of Gujarat. Further, Maharashtra has the segments of the industries. The Maharashtra The State Government largest installed electricity undertook various endeavours generation capacity all over India. Government needs to undertake rigorous policy for the growth of the MSME The state’s industrial sector is initiatives to boost SMEs in the state. Governance segment like establishing the the largest consumer of power on the part of the state is crucial in attracting Gujarat Institute of Development followed by the domestic diversified players into the market. Research (GIDR), agricultural sector. Its thermal Entrepreneurship Development power constitutes a large part of Institute in India (EDI) and Centre for the Mumbai-Pune Expressway has its installed generating capacity. Maharashtra Entrepreneur Development (CED). The significantly improved connectivity between is among the few states in the country which State Government also provided support the two most important industrial sectors in has a significant presence of private sector through its Industrial Policy of 2009 by: the state. It is believed that the Expressway players in the electricity generation and Promoting geographical strengths in shall enable rapid industrial development in distribution business. In addition, order to ensure balanced regional the region. Maharashtra has also seen rapid growth in development Ports the telecommunication sector in the past Improving the infrastructure available in There are several ports in the state that decade. the state handle the export of ores mined in Gujarat Enhancing technical competence and Maharashtra and the state has three main Policies manpower ports located in the capital city of Mumbai In order to boost investment in infrastructure Rewarding the adoption of new that are controlled by the Mumbai Port projects Gujarat enacted the Gujarat technologies and innovations Trust. Infrastructure Development Act in 1955. Creating labour market efficiencies. SEZs The Act provided a framework to private The Gujarat Government has also The state established its first Special players to participate in the construction, initiated a forum called ‘Vibrant Gujarat’, Economic Zone (SEZ) through the finance and maintenance of the infrastructure which provides the state ample scope to conversion of Santa Cruz Electronic Export projects. display its strengths. Moreover, it takes Promotion Zone (SEEPZ) into an SEZ to Educational institutes initiatives to improve governance and further boost the industries present in Further, the productivity of labour in Gujarat provide a n inves tor-friendly clima te. SEEPZ. SEEPZ commenced operations in is high. Gujarat being home to India’s leading 1973-74 with a developed area of over business school, the Indian Institute of INFRASTRUCTURE 100 acre. Initially, it exclusively focussed on Management – Ahmedabad (IIM-A), also DEVELOPMENT electronic items. However, manufacture has the highest proportion of its population Maharashtra and export of gems & jewellery items was engaged in running owned businesses. Rail, road & air network permitted in 1987-88. Maharashtra is also Telecommunication Maharashtra has sound physical infrastructure planning to develop one of the biggest SEZs Gujarat has made a lot of advances in order with a good rail, road and air network. A in the country near Mumbai. The to develop its telecom industry. The Gujarat major part of Maharashtra is connected Maha-Mumbai Integrated SEZ (MiSEZ) shall State Wide Area Network (GSWAN) is the through railways. As far as its air connectivity cover 6,000 hectare to facilitate efficient world’s second largest IP-based WAN is concerned, the state has 10 domestic movement of goods for domestic and connecting over 2,800 government offices. airports. The busiest airport of the country international trade. Also, the redressal of grievances of citizens is located at Mumbai. Further, an additional Educational institutes can be done over the Internet itself through airport has been proposed at Navi Mumbai. In addition, Maharashtra houses six Indian the State wide attention on public grievance There is also a proposal to set up a greenfield Institutes of Technology (IITs) of which the by application of technology (SWAGAT). airport near Pune. The State Government best institute is IIT Mumbai in Mumbai. It Ports also planned to develop an international also boasts of a well developed infrastructure Gujarat has a 1,600km indented coastline hub at Nagpur. The project envisages consisting of 10 universities, 67,800 primary and 42 functional airports, which handle upgrading the existing Nagpur airport to and 17,530 secondary schools and more over 80 per cent of port traffic in the international standards and developing the than 1,800 higher education institutions. country. It was the first state to announce a same as a cargo hub for the Asia-Pacific This strong network of institutes makes a separate Port Policy, which integrates the region. Maharashtra has a vast network of pool of qualified professionals available to development of ports with industrial roads with a total road length of over the numerous businesses & industries in the development, power generation and 2,67,000km. The total length of its national state and the country. infrastructure development. It was also the highways is 4,176km and state highways is Types Chemicals Power Gems & Ceramics Biotechnology Handicraft Multi Services 33,705km. The government-run bus Jewellery & Glass service in Maharashtra is India’s best in terms of connectivity and frequency. There No. 2 2 1 1 1 1 3 Source: IBEF are also privately run luxury buses to Table 5: SEZs in Gujarat commute between different towns. Also,
SEARCH - Supplement September 2011
Departments Purpose Allotment of plot Land Building plans approval Power supply Power connection VAT registration Sales Tax Act Professional Tax
Timelines 39 15 30 7 01
Departments Purpose Land Allotment of plot Building plans approval Power Power supply connection Sales Tax Act VAT registration Professional Tax
Timeline Single Window Clearance: The state’s single window facility, on an average, clears investment approvals in 30 days However, the time for obtaining approvals depends on the nature of the industry and the documentation provided by the investor In cases where the investor meets all the government’s requirements, clearances are expedited considerably.
Source: CII Study, 2010
Table 6: Timeframe for approvals to set up business in Maharashtra
first state to privatise the construction of ports in the country. Gujarat’s minor ports handle 20 per cent of the total cargo of the country. Kandla Port in Gujarat has emerged as the largest cargo-handling port. Rail network & water connection Gujarat also has a wide road network spanning across 74,000km. It is also well connected by rail with 5,310km of rail lines. In addition, the state has undertaken extensive canal construction to supply water to the arid regions of Kutch. Power Power is an essential ingredient for the development of the industrial sector of a country. Gujarat has planned several initiatives to build adequate capacity in generation, transmission and distribution of power supply. These include rationalising the power tariff structure, encouraging power generation from non-conventional sources, focussing on energy conservation and improving the quality of services to consumers. SEZs In order to encourage investments in the state, Gujarat also gives autonomy and funds to industrial estates to implement maintenance and modernisation measures. It is also encouraging organisations to set up units in these zones by giving them tax holidays and subsidies like exemption from stamp duty and registration fees. Gujarat has set up SEZs at Kandla and Surat. In 2008, it had 55 approved SEZs of which 44 were sector specific and 11 were multi-product. Currently, it has 10 functional and 15 notified SEZs of which 22 have got formal approval, while eight have been in principle approved. Gujarat is the leading SEZ state with the highest geographical area spanning over 15,000 hectare. It can be deduced that though Maharashtra and Gujarat are leading states in their own respective segments of the industries. The Maharashtra Government needs to undertake rigorous policy initiatives to boost SMEs in the state. Governance on the part of the state is crucial in attracting
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GROWTH PARADIGMS
Source: IBEF
Table 7: Timeframe for approvals to set up business in Gujarat
diversified players into the market. Therefore, the Maharashtra Government must rigorously participate in various activities in order to make its policy framework more dynamic and appealing to private players.
FACILITATING BUSINESS The effectiveness of a regulatory framework in states is a crucial feature that impacts a state’s investment climate. Various states in India have different regulatory setups that focus on different aspects of doing business. The essential prerequisites of doing business includes retail activity, entrepreneurial ability, entry norms, registering property, getting credit, dealing with construction permits, labour laws, paying taxes, exit procedures and so on & so forth. The timelines, along with a number of procedures, bring about significant differences in the nature and amount of investment a state attracts. Maharashtra is one of the country’s most industrially developed states and attracts a large quantum of investments, both domestic and foreign. The state has attained a reputed position in every sector including engineering, automobiles & auto components, chemicals, drugs and pharmaceuticals, textiles, information technology & biotechnology. It offers fine educational facilities, quality-trained manpower, a professional work ethic and a conducive business environment. A wide variety of horticultural crops are also grown in the state, thereby making it a major producer of oilseeds, rice, cotton, sugarcane, etc. Gujarat, the state known for its entrepreneurial spirit, has become one of the most preferred locations for most industrial investments in the country. One of the contributing factors is the dynamic regulatory environment in the state. The Gujarat Government gives various tax concessions and incentives to attract industries and also provides a robust social
& physical infrastructure to augment the same. The Gujarat Government gives tax concessions for investments in the lesser developed areas. For example, tax exemptions were announced for investment in the Kutch district. This conducive environment, among many other factors, encourages entrepreneurs to set up their business activities in Gujarat.
STEERING AHEAD Governance: A significant factor, which influences investments in a state, is the ability of the government to provide a conducive environment, especially in a dynamic environment that has heightened competition. The state, which is not proactive, in terms of streamlining its timelines, moving towards single clearance window etc., is more likely to suffer. Efficiency Labour Force: The availability of a skilled and professional labour force is a critical factor. Each state has to lay emphasis on developing a strong and diversified skill base, which is attainable if the state regularly looks into and updates its curriculum. Infrastructure: The growth of any state can be hampered due to the lack of or inadequate infrastructure. Adequate importance needs to be given in developing sound road, air and water connectivity within and outside the country. Further, problems relating to power shortage need to be addressed on a war footing by exploring non-conventional sources as well. Tax Structure: States must develop a proper mix of expenditure directed towards developmental and non-developmental activities. At initial stages of development, the states could attract investors by providing certain forms of tax incentives or other such benefits. Samruddha Paradkar, Associate Economist, CARE Ratings E-mail: samruddha.paradkar@careratings.com (The views expressed by author are personal)
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COMPETITIVE STREAK
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GAINING ACCESS TO LOST FORTUNES Scoring high on parameters like fiscal discipline, administrative capability, professional competence and infrastructural facilities, the state of Maharashtra once dominated the investment landscape in terms of global investments. But over the past few years, the state’s performance has been dwindling. Its inability to create and maintain an environment that sustains more value creation for enterprises and higher prosperity for people has driven away potential investors from investing in the state. Here are a few suggestions on how the state can regain its manufacturing competitiveness and lost glory…
FACT
R
FACT
be undertaken to reverse the egain its competitiveness? It is time for Maharashtra to speed up. Let the rot must first accept that But, how did Maharashtra managers of the state take a holistic view of industrial investment, lose it? Unless you know the state and of all the state’s governing manufacturing competitiveness the cause, you cannot find systems. Do not look at an industry in isolation. and the quality of life in the a solution. The state lost its Draw up a brand new policy document that state, are all interrelated. You competitiveness because cannot look at any of these in the political management of our glorious will be dynamic, enlightened and forward isolation. Also remember, the state triggered a cascading deterioration in looking. Streamline and simplify every simpler you make life, the more our attractiveness as a place to invest, work interface of people and administration. inclined professionals and and live in. To put it simply, if we reverse the industry – electricity. Clean electricity i.e. investors will be to come. Make regressive steps of the past few years and electricity at the correct voltage, correct life a struggle and they will go elsewhere. add a clutch of new initiatives, Maharashtra frequency and zero fluctuation is common The following solutions will ensure that will once again become a destination of everywhere, except Maharashtra. What Maharashtra regains its premier position: choice for businesses – new & old, Indian Adequate power supply prevents Maharashtra Industrial and foreign. After all, manufacturing Let us first look at the most critical input into Development Corporation from having a competitiveness comes from good, dedicated diesel-fuelled power competent people viewing station attached to each of its Maharashtra as a healthy and industrial estates, which can prosperous place to pursue a The State Government has to wake up to the fact provide clean, uninterrupted profession in and a wholesome that many states in India have good infrastructure electricity to their units? With a state to raise a family in. and facilities for industrial workers and their That is why, anyone drawing dedicated, captive DG power families who live a much higher quality of life. up a pragmatic list of initiatives to station attached to each industrial
SEARCH - Supplement September 2011
COMPETITIVE STREAK
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up to the fact that many states in India have estate, the state will accrue three revenue?’ But it is naïve to ask this as even a good infrastructure and facilities for industrial advantages: fractional rise in any of the myriad taxes will Costs will come down, because: workers and their families who live a much offset the shortfall. Whatever your logic, the - Large DG sets operate at higher quality of life. After all, you much higher efficiencies cannot expect a factory worker Like most other states, Maharashtra, too, should than smaller sets and to emerge from a sub human therefore, large DG sets and squalid shanty, with himself, abolish Octroi. Octroi is needless paperwork and consume far less diesel his wife and children in tatters, provides an opportunity for bribery & corruption. per unit of electricity unwashed & unkempt, and yet It creates traffic jams & air pollution and adds no generated produce world class goods as value whatsoever to the industry. - Electricity transmission soon as he steps into a factory. and distribution costs will TIME TO WAKE UP be zero ultimate truth is abolishing Octroi will It is time for Maharashtra to wake up. Let - Power theft will be zero. simplify the bureaucracy and help industries Pollution will be significantly less the managers of the state take a holistic view thrive. The utility grid will be left with more of the state and of all the state’s governing Taxing problem electricity for retail consumers. systems. Do not look at an industry in The next major hurdle is the problem of Abolish Octroi isolation. Draw up a brand new policy taxation. Why is our state’s taxation so Like most other states, Maharashtra, too, document that will be dynamic, enlightened heavy and complicated? There are should abolish Octroi. Octroi is needless and forward looking. Streamline and simplify numerous taxes & taxes on taxes and cess paperwork and provides an opportunity for every interface of people and administration. on taxes. It would be much more convenient bribery & corruption. It creates traffic jams Adopt modern and sophisticated procedures if there was only one tax on manufacturing. & air pollution and adds no value whatsoever for citizens’ convenience and watch the You could call it by any name, but ensure to the industry. Moreover, it drives away state sprint forward as a haven for industry, that once it is paid, the manufacturer is not many professionals and industries that seek commerce and people. harassed. Remember: the manufacturer clean, quick and efficient systems to follow honestly wants to pay tax; he just does not RV Krishnan, Chairman, Business Development with the least loopholes. Some may ask ‘if it want to be hassled. Bureau (India), Pune was to be abolished, how will the Good quality of life E-mail: rvk@bdbmr.co.in Finally, the State Government has to wake government meet the shortfall in the state’s
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SEARCH - Supplement September 2011
OPINIONS & MORE
‘Maharashtra continues to
attract the largest quantum of
domestic as well as
foreign investments’ “The state offers the finest infrastructure, excellent educational facilities, trained manpower, a professional work ethic and a favourable business environment,” says Samir Gandhi, Executive Director, Gandhi Automations, in conversation with Purna Parmar. Excerpts…
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AINING MANUFACTURING COMPETITIVENESS
Maharashtra is the economic powerhouse of the country. With its proactive policies, the state has managed to attain pole position among the industrially advanced states in India. Maharashtra has successfully created a conducive environment for industrial development. But if the state has to sustain its numero uno position in the economic sphere, it needs to have a highly focussed action plan in place, especially in view of intensifying competition from other states. The action plan has to be centred on the growth drivers – manufacturing, IT, SEZs, KPOs, tourism, agro-processing, etc. – where Maharashtra has a competitive advantage. Past experience indicates that fiscal and financial incentives help new ventures initially, but for their long-term viability, the state has to take aggressive measures to provide efficient and cost-effective infrastructure, skilled human resources, stable environment & good governance, which are the prerequisites for creating a proper investment climate for
sustainable growth of industrial ventures.
OPPORTUNITIES OFFERED Maharashtra has always led the country’s industrial development scenario and continues to attract the largest quantum of domestic as well as foreign investments. In an attempt to attract more investors into the state, it plans to lower its electricity charges for industries. It has established a stronghold in every sector be it engineering, automobiles & auto components, chemicals, drugs and pharmaceuticals, textiles, information technology or biotechnology. The state offers the finest infrastructure, excellent educational facilities, trained manpower, a professional work ethic and a favourable business environment. A wide variety of horticultural crops are also grown in the state. In addition, the state is a major producer of oilseeds, rice, cotton, sugarcane, etc. Apart from these aspects, the state’s rich heritage, trade, culture and history are some of the factors that are drawing a large number of tourists to the state.
PRIORITY AGENDA Maharashtra occupies a very significant position in the industrial economy of India.
But over a period of time, the state’s share in India’s industrial sector has declined. The composition of industries in the state is undergoing major changes with the manufacturing sector in the state facing many problems such as high taxes, tariffs, shortage of electricity, etc. The Maharashtra Government has made several policy announcements in order to create the right kind of business climate in the state. These policy documents aim at motivating investors to invest into various sectors of the state and thereby contribute to the overall development of the state’s economy. They are endeavoured to remove various roadblocks, which hamper the industrial progress of the state. They also envisage various incentives and schemes for investors.
ENHANCING GROWTH PROSPECTS Maharashtra needs to frame liberalised and industry-friendly economic policies in order to fasten its grip over the state’s industrial growth. To revive its industrial sector, the state needs to broaden its narrow focus and incorporate labour-friendly laws and labour-intensive processes in the manufacturing sector.
SEARCH - Supplement September 2011
PRODUCTS UPDATE
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This section gives information about products, equipment and services available in the market. If you know what you want. . . refer to Product Index on Page 34 to find it quickly
DRILL JIG BUSHES
hushbu Engineers manufactures and offers drill jig bushes in conformity with IS:666. The material used is EN31 hardened U A L I T Y grinding and honing up to 60-62 HRC. Heat treatment, facility is available in-house supported with all inspection facilities APPROVED required. Standard sizes are available ex-stock and special sizes supplied within 15 days. OD ground/ungrounded bushes can also be supplied as per customer’s requirements. Other products are jig bushes, cost effective manual honing machines, sine tables, clamping elements, machined and ground plates, yoke roller assembly for surface lapping machine, dowel pins, etc. Gauge calibration facility is also available. Q
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Khushbu Engineers, Kolhapur 416 122. Tel: 0230-2468859, Fax: 0230-2468443, Mob: 09371658016 Email: honing@khushbuindia.com, Website: www.khushbuindia.com Certification: An ISO 9001:2000 Certified Company
AC DRIVES
trategi Automation Solutions offers a wide and rugged range of AC drives up to 400 kW ratings manufactured by Hitachi of Japan. These are available as simple variable frequency drives and also sensorless and flux vector drives. Simple variable frequency drives (models L300 & X200) are suitable for fan, pump, and compressor applications; and are available up to 132 kW. The SJ700 series vector control drives have industry-leading starting torque of 200 per cent at 0.3 Hz in the SJ700 series. These drives can be used for position control applications with the addition of a feedback option card. The new latest WJ200 drives have many class leading features, such as 200 per cent starting torque. It has special algorithms to improve low speed regulation and can be used for simple positioning applications with encoder feedback without the use of any add-on card.
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Strategi Automation Solutions Pvt Ltd, Mumbai 400 072. Tel: 022-2847 3114/15, Fax: 022-2847 3114 Email: amitha@strategiautomation.com Website: www.strategiautomation.com
RUBBER DIAPHRAGMS
K Industries manufactures rubber diaphragms for applications, like pumps, valves, actuators, LPG valves, CNG valves, thermal actuators, gas diaphragms and pressure diaphragms. The diaphragms can be reinforced with fabric for higher
D
strength. Dimensional tolerances of precision diaphragms to 0.02 mm (Âą0.001 inches) are maintained. Designing and manufacturing a rubber diaphragm is a science itself and there are a lot of factors involved to get the right diaphragm, for eg, design, raw material, pressure, medium in contact, etc. Therefore, it is best to use the expertise right from the development stage, hence improving product efficiency and cost. Diaphragms in approved materials, like EPDM, nitrile, neoprene, viton and silicone are also offered. D K Industries , Mumbai 400 102. Tel: 022-2678 9085, Fax: 022-2768 5063, Mob: 09322281444 Email: dkindustries07@yahoo.com
COVERALLS
ole-Parmer offers Kimberly-Clark KleenGuard coveralls that protect users from dry particulates and light liquid sprays. KleenGuard A30 & A60 coveralls are made of a patented three-layer microforce fabric which includes a layer of microporous film. This design allows heat and sweat vapours to escape so workers can stay with the task at hand with less fatigue and heat stress. Type A70 coveralls are made from a nonwoven fabric with an exterior that is terminated with a 1.5 mil polyethylene film. Type A10 coveralls are constructed from spunbound polypropylene. These light-duty coveralls are breathable, helping keep workers cool and comfortable in a wide range of work situations. Type A30 coveralls are made from a medium-duty, more abrasion-resistant, three-layer microforce material, while retaining breathability. Type A60 coveralls are made of a heavy-duty microforce material which passes ASTM F1670/1671^1 for penetration of blood, bodily fluids and bloodborne pathogens.
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Cole-Parmer India, Mumbai 400 076. Tel: 022-6716 2222/ 209, Fax: 022-6716 2211 Email: response@coleparmer.in Website: www.coleparmer.in
MECHANICAL COMPARATORS
havna Tools Agency offers mechanical comparators also called as universal measuring units. These units are used for quick measurement of outside and inside diameters, ovality two and three point measurement, squareness of diameter to end face, wall thickness, height and combination of these measurements. The units can be used with dial gauge or electronic measuring devices depending on the required accuracy. They are tested and certified for their accuracy by Mechanical Engineering Research Department, Pune. Three models with range of 140, 250 and 350 mm outer diameter with various accessories are available for different functions.
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Bhavna Tools Agency, Mumbai 400 004. Tel: 022-2388 6616, Fax: 022-2380 8942 (C/o), Mob: 09869393875 Email: bhavanatools@yahoo.com
PRODUCTS UPDATE
GLASS-TUBE ROTAMETERS
SEARCH - Supplement September 2011
nline tapered glass tube rotameters from Cristal Instruments are used for flow-rate measurement of fluids and gases. These rotameters are individually calibrated to get maximum accuracy. They are available with various options for connections and materials of construction for a wide range of applications. The rotameters are suitable for working pressure of 10 kg/cm² and temperature of 150°C. For higher pressure applications and flow rates, different types of rotameters, like metal tube and bypass type rotameters are recommended. Also high and low flow alarms are provided as accessories.
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Cristal Instruments, Mumbai 400 080. Tel: 022-2569 3893, Fax: 022-2560 3474 Email: cristal@roltanet.com, Website: www.cristalinstruments.com
CARBURETTOR CLEANERS
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Q
hem-Verse Consultants (India) offers carburettor cleaners UALITY that are specially formulated, based on safe solvents for cleaning carburettors. These A Pcarburettor P R O V E Dcleaners remove gummy residues and varnish from the carburettor float area & jets. They protect from corrosion and reduce residue in the cylinder & valve area. Fuel saving is due to better fluid flow. The carburettor cleaners are compatible with catalytic convertors. These come in packing of 200 gm aerosol tin and also find application in carburettor jets.
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Chem-Verse Consultants (India) Pvt Ltd, Mumbai 400 022. Tel: 022-2409 5503, Fax: 022-2409 7858 Email: sales@chemverse.com, Website: www.chemverse.com Certification: An ISO 9001 Certified Company
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Bombay Tools Centre (Bombay), Mumbai 400 003. Tel: 022-2344 2098, Fax: 022-2342 1341, Mob: 09987538737 Email: info@bombaytools.in
ANTI-CORROSIVE COATINGS
NUMERIC COMMUNICABLE PROTECTION RELAYS
shida Electronics offers numeric communicable OC/EF protection relays A(model ADR131A) that have options, like 2 U LITY OC +1 EF or 3EF relay with instantaneous high set and programmable output feeder protection wiring. A P P R to O V simplify ED Technical specifications include: 3 R Oelement (2-phase + EF/3-phase/3EF) over-current IDMT with instant trip; display of fault current/load current; selection of curve: six selectable curves (normal inverse1 (C1), normal inverse2 (C2), very inverse (C3), extremely inverse (C4), long time inverse (C5) & definite time (C6); separate curve selection for phase & EF; latching of fault current up to last 5 fault; site selectable CT secondary; programmable annunciation contact; trip circuit supervision function; and breaker fail.
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Ashida Electronics Pvt Ltd, Thane 400 604. Tel: 022-2582 7524, Fax: 022-2580 4262, Mob: 09967789919 Email: sales@ashidaelectronics.com Website: www.ashidaprotection.com Certification: An ISO:9001 Certified Company
AUTO DOOR SENSORS
utonics Corporation offers auto door sensors (models ADSAF & ADS-AE) for automatic opening of the doors. These intelligent sensors as they carry firmware in the microprocessor inside the unit. The sensors can be auto tuned to teach the permanent objects. They are available with 4 steps variable function for front detecting area. By using this function one can extend the area of scanning in the front side. These have right/ left detecting area elimination function. By using the left/right elimination function one can increase or reduce the scanning beam in the sides. Standard units are available with silver colour, but as option, black, white, bronze & nickel colours are also available. There is a wide range of power supplies available, like 24-240 V AC / 24-240 V DC, 12-24 V AC / 12-24 V DC. The sensors can be mounted from a height of 2 m to 2.7 m. Sensitivity can be adjusted using a potentiometer.
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tar Refrex offered by Star Paint & Oil Industries are air-drying anti-corrosive coatings specially developed for application U A L I T Y on the kiln shell inside before the refractory bricks are laid. P P700°C R O V Eand D These anti-corrosive coatings can resist heat upAto prevent corrosion even at such high temperature. TheO use of Star N T erosion RO Refrex air-drying anti-corrosive coatings prevents metal and hence stops the reduction of shell metal thickness, which increases the life of the kiln shell. Technical specifications include:
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VERNIER CALIPERS
bsolute coolant-proof calipers (series 500) offered by Bombay Tools Centre are available with dust/water protection, conforming to IP66/67 level. These vernier calipers are provided with a digital display screen. The calipers can offer easy-to-read and accurate readings even in bright light.
Star Paint & Oil Industries, Mumbai 400 023. Tel: 022-2265 2243, Fax: 022-2265 3201 Email: info@starpaintindia.com, Website: www.starpaintindia.com Certification: An ISO 9001:2000 Certified Company
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consistency: brushed & sprayable liquid; density: 1.01 gm/cm³; solubility: insoluble in water; surface preparation: surface should be clean, dry from rust, oils, dirt, grease, dust, etc; and Refrex must be applied at room temperature; coverage: 8 to 10 square meter per coat; packing: 5 liter cans; and thinner not required & not recommended.
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Autonics Automation India Pvt Ltd, Navi Mumbai 400 705. Tel: 022-2781 4305, Fax: 022-2781 4518 Email: india@autonics.com, Website: www.autonics.com
SEARCH - Supplement September 2011
MINIATURE GUIDES
pares & Components Co offers NB miniature guides from Japan, engineered to be compact and lightweight to ensure precise linear operation at high speeds. The SEB slide guides use precision-machined steel balls as rolling elements promoting exceptionally low resistance with smooth, stable operation at low cost. Likewise, the SER slide guide uses precision machined cylindrical rollers, ensuring high rigidity and high load capacity with low noise. The NB high load SGL/ SGW slide guides are designed to maintain stability under extremely high load conditions. Use of 4-ball circuits and arch ball groove design stabilises uneven multi-directional load factors and assures smooth continuous movement throughout the work cycle. The SGL/SGW bearing blocks incorporate a ball retainer, permitting the block to be easily removed from the rail. This allows for ease of maintenance and assembly of machines. The pre-seals are designed specially for this slide guide, providing superior lubrication retention over long periods of operation.
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Spares & Components Co, Mumbai 400 003. Tel: 022-2883 1051, Fax: 022-2883 6769 Email: sudhir@spco.in
INCIDENT LIGHT MICROSCOPES
ardhan Works offers specially designed computer interfaced incident light microscopes (model SPM-4) to view and measure honing texture of grey iron cylinder bores of combustion engines. The honing texture consists of two sets of approximately parallel, stochastically placed groves at different angles to the cylinder axis. Oil consumption, longitivity and noxious emissions highly depend on the quality of this grove texture. These microscopes are interfaced with users’ computer to get a crystal sharp image of the he honing texture. Exact angle of honing can be measured by the user-friendly software and printed instantly. This novel setup completely replaces the old method of testing the liner surface by fax film. Cutting, mounting & polishing equipment along with many other types of special purpose industrial & metallurgical microscopes are also available on demand.
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Vardhan Works P Ltd, Pune 411 004. Tel: 020-244 0086, Fax: 020-244 0086 Email: vardhanworks@gmail.com
THREADED INSERTS
avbharat Engineers manufactures and exports Helisolid threaded inserts that are used in aluminium, cast iron, plastics and woods. These inserts are also used in materials where threads tapped directly get damaged due to torque or where wear occurs due to frequent assembly and disassembly. The inserts are better than Helicoil for strength, durability, resist to vibration and ease of installation (claims the company). They are designed to improve the strength of assemblies by distributing forces from fastener over larger area of base material, thus
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PRODUCTS UPDATE
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BOD INCUBATORS
arbi Engineering & Weighing offers BOD incubators that offer superior temperature accuracy, minimum heat loss, better airflow for maximum uniformity of temperature. Salient features include: microprocessor\-based PID controlled system, with high accuracy of ± 0.2°C; safety thermostat provided to prevent the temperature overshoot with audio visual alarm; CFC-free eco-friendly cooling systems; printer interface for online print data on 80 column dotmatrix printer (optional); and complete IQ, OQ and PQ documentation & operating manual. The BOD incubators are used to provide temperature conditions for bio-oxygen demand test, cell/tissue culture/bacteria micro-organism culture applications, raw material & bulk product storage, plasma & blood product storage, serum incubation, immunological studies and other applications in the field of manufacturing, and quality control research & development. Optional accessories are: microprocessorbased multi-data logger system; RS232/485 computer connectivity (PC interface); printer interface for online print data on 80 column dotmatrix printer (optional); and mobile alert through GSM.
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Sarbi Engineering & Weighing Pvt Ltd, Mumbai 400 054. Tel: 022-2604 3722, Fax: 022-2605 6195, Mob: 09870318548 Email: sales@sarbi.com, Website: www.sarbi.com
METAL MARKING MACHINES
hankhesh Engineering Co offers metal marking machines that are permanent metal marking systems. These machines are portable and robust in design and operate on 230 V AC. They are unique systems for fine, precise and clean marking on metal irrespective of shape, thickness, size and hardness. However painted or anodised surface can not be marked with these machines. Precise marking of part number, specification, identification mark, production date, batch number, inspection date, monogram, ISI mark and ball marking can be obtained on the products, such as tools, machinery part, bearing, valve body, instruments, surgical instruments, jewellery and cutlery items. The metal marking machines can mark white as well as black impression on any conductive materials within just two seconds.
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Shankhesh Engineering Co, Mumbai 400 069. Tel: 022-26838035/3189, Fax: 022-2684 0346, Mob: 09224398912 Email: markon90@gmail.com
WELDING MANIPULATORS
nvin Engineers offer a wide range of precision manufactured welding manipulators that are widely used in varied industries for welding purposes. Known for their efficient performance and accuracy, these products come in a wide range of choices and successfully meet the expectations and varied requirements of clients. Also manufactured are columns and booms for manipulating
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Anvin Engineers Pvt Ltd, Pune 411 018. Tel: 020-3078 0541, Fax: 020-3078 0542, Mob: 09370780556 Email: sales@anvinindia.com, Website: www.anvinindia.com
SOUND LEVEL METERS
usam Electrical Industries offers sound level meters (models KM-927, KM-928 & KM-929) that are devices which measure sound pressure to determine how intense sounds UALITY are, measuring in decibels. These sound level meters measure the sound Apressure P P R O V and E D provide a reading in decibels for the convenience of users. They are often designed O to be portable so that people can move them around as needed; and are often handheld, although sometimes they can be part of a permanent instrument array, which is designed to take continuous measurements in a given area. These devices are also used in noise pollution studies, which are used to determine the impact of passing vehicles, aircraft, DG sets and other soundgenerating objects. The sound level meters are also used in the music industry, during recording and setting up for concerts as well as monitoring of conditions in a concert.
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Navbharat Engineers, Mumbai 400 051. Tel: 022-2647 3797, Fax: 022-2647 8893 Email: navengg@vsnl.com, Website: www.ne-india.com
welding heads/torches used for various welding application. Features include: rugged construction; wide based & lockable swivel base to enhance stability; failsafe anti-fall mechanism in all models; minimum deflection even when boom extended fully; precise jerkfree vertical & horizontal movements; over-rated, pre-loaded & dust protected bearing arrangements; operator’s seal at conveniently placed location; and option for chair for operator on heavy-duty models.
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improving load bearing capability. The Helisolid threaded inserts are available in steel hardened, stainless steel and brass. They are also manufactured in thread series Metric, BSW, BSF, UN and UNC.
SEARCH - Supplement September 2011
PRODUCTS UPDATE
Kusam Electrical Industries Ltd, Mumbai 400 015. Tel: 022-2412 4540, Fax: 022-2414 9659, Mob: 09867000456 Email: response@kusamelectrical.com, Website: www.kusamelectrical.com Certification: An ISO 9001:2000 Certified Company
GRAVITY FILTERS
any industrial process liquids become contaminated with various solids, debris or swarf and have to be removed by gravity filtration. Dirty liquid is fed into the gravity filter through an inlet header forming a pool. Gravity and the weight of the liquid become the driving force and create a pressure differential across the media. Solids accumulate on the surface of the media to form a filter cake which further improves filtrate clarity through depth filtration. The pressure differential also provides a higher filtration rate and lower filter media consumption. For this Udly Engineers proposes gravity filters. For most applications, complete system packages, including tanks, pumps and controls can be proposed.
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Udly Engineers, Dist Thane 421 506. Tel: 0251-2621429, Fax: 0251-2621443 Email: udly@vsnl.net, Website: www.udlyengineers.com The information published in this section is as per the details furnished by the respective manufacturer/ distributor. In any case, it does not represent the views of
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SEARCH - Supplement September 2011
PRODUCT & ADVERTISERS’ INDEX
To know more about the products featured in this magazine, fax (at 022-3003 4499) or cut & post to us the Product Inquiry Card given on page 245 of the main issue, by following the 5 easy steps as mentioned in the coupon. Alternately, you may also write to us at search@infomedia18.in or call us on 022-3003 4653/4684, and we will send your inquiries to the advertisers/companies directly to help you source better. Sr.
Products
Pg No
Sr.
Products
Pg No
961
AC drives .................................... 29
983
Flange mounting motors............. BC
1004 Radial .......................................... 31
962
AC motors ................................. BC
984
Glass-tube rotameters ................. 30
1005 Reamers...................................... 31
963
Angles ......................................... 31
985
Gravity filters ............................... 32
1006 Rotating electrical connectors ...... 31
964
Anti-corrosive coatings ................ 30
986
HSS-CO ..................................... 31
1007 Rubber diaphragms ..................... 29
965
Auto door sensors ...................... 30
987
HSSE .......................................... 31
1008 Shipyard cranes ......................... BIC
966
Automation ................................. 31
988
Incident light microscopes ........... 31
1009 Shock & vibration isolation .......... 27
967
Axial ............................................ 31
989
Induction seals/wads .................... 31
968
Ball nose ..................................... 31
990
Industrial cranes ........................ BIC
969
BOD incubators .......................... 32
991
Lift trucks services ..................... BIC
970
Brake motors ............................. BC
992
Light lifting ................................. BIC
971
Carbide coated/uncoated taps ..... 31
993
Long neck tools........................... 31
972
Carburettor cleaners ................... 30
994
Mechanical comparators .............. 29
973
CNC rotary & tilting tables.......... 31
995
Metal marking machines .............. 32
974
Conductors ................................. 31
996
Miniature guides .......................... 31
975
Container cranes ....................... BIC
997
Modernisations .......................... BIC
976
Coveralls ..................................... 29
998
Motors ....................................... BC
977
CPMs .......................................... 31
999
Numeric communicable
1018 Threaded inserts ......................... 31
978
DC motors ................................ BC
protection relays ......................... 30
1019 Tungsten carbide tools ................. 31
979
Drill jig bushes............................. 29
1000 Packaging solutions ...................... 31
1020 Validation of pacs......................... 31
980
Electrical connectivity................... 31
1001 Packaging test equipment ............ 31
1021 Vernier calipers............................ 30
981
Exhibition - EngineeringExpo ...7, 33
1002 PBEGL geared motors ............... BC
1022 Welding manipulators .................. 32
982
Flameproof motors .................... BC
1003 Process cranes .......................... BIC
1023 Welding products .......................... 3
1010 Slipring crane-duty motors ......... BC 1011 Solder pastes............................... 31 1012 Solid carbide end mills................. 31 1013 Sound level meters ..................... 32 1014 Spray balls ................................... 33 1015 Swivel drilling &milling tools......... 31 1016 Taps ...........................................FIC 1017 Thread mills & special tailor-made tools ......................... 31
Pg No
Advertiser
Tel. No.
Website
FIC
Emuge India Pvt Ltd
T: +91-20-39310000
E: marketing@emugeindia.com
W: www.emugeindia.com
31
Enco Tools & Equipments
T: +91-22-25957531
E: sales@encotools.in
W: www.encotools.in
7, 33
Engineering Expo
T: +91-9819552270
E: engexpo@infomedia18.in
W: www.engg-expo.com
BIC
Konecranes India Pvt Ltd
T: +91-20-40047470
E: india.sales@konecranes.com
W: www.konecranes.com
31
Progressive Engineers
T: +91-22--32944289
E: info@progressiveengineers.net
W: www.progressiveengineers.net
27
Shavo Technologies Pvt Ltd
T: +91-20-26069641
E: shavogroup@vsnl.com
W: www.shavogroup.com
BC
The Indian Electric Co
T: +91-20-24474303
E: icemktg@indianelectric.com
W: www.indianelectric.com
3
Welding Technologies India
T: +91-20-65101340
E: wti@weldingtechindia.com
W: www.weldingtechindia.com
FIC = Front Inside Cover, BIC = Back Inside Cover, BC = Back Cover
Our consistent advertisers
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