Doing business in Kerala hurdles

An important reason why businesses are unpredictable about investing in the state is its raging and contentious trade unionism. The recent decision of successful garment manufacturer Kitex Garments to retract from a Rs 3,500 crore investment plan in Kerala has once more brought to focus the lack of ‘ease of doing business’ in Kerala. The Kerala government even said to have proposed measures like single-window clearance systems for investors, the state has been dragging behind in doing business rankings. Kerala was placed 28th position. Labour militancy and association of different government agencies in giving sanctions to business units are vital problems being faced by investors in Kerala.

Former chief executive officer of the Trivandrum Technopark, G Vijayaraghavan, mentioned the example of delegates of German carmaker BMW who visited the state with ideas to start a manufacturing plant. But their visit met with a hartal in the state causing them to abandon the project, he wrote in Dhanam, a Malayalam magazine.

Vijayaraghavan also mentions his plans to start a hard disk component manufacturing unit in the nineties. It would have given income to thousands of women in the state which was also discarded. The opposition leader then refused to ensure a peaceful work environment in the state. It forced them to open the factory in China.

Kerala Planning Board member, Vijayaraghavan, explained the pitiful condition of the state when coming to private investment. Hesaid the state government was spending money in the name of attracting investors with investment needs and rather spend it for the welfare of the people.

Vijayaraghavan said that while these hartals are held across the country, they rarely affect the day to day activities in other states unlike Kerala, the report said. “I am not pointing fingers at anyone. Maybe all this violence are designed by those who want to hamper the state’s progress,” he was quoted as saying in the report.

Pinarayi Vijayan, Chief Minister of Kerala said in 2018, even though the state lacked enough land for attracting investments and establishing infrastructure, the government is trying to deliver a proper working environment for different companies in the state.

“As part of Ease of Doing Business, we are rectifying certain complaints which came up. We want to create an investment friendly environment in the state. We are trying to eliminate the unnecessary delay in getting approvals,” he said in an exclusive interview to PTI here.

“If a decision has not been taken on an application within the time-frame allotted for it, the application will be considered as approved,” he said.

Vijayan said his government had several discussions with important companies like Intel, Nissan and Tech Mahindra for investments in the state, days after the first-ever Global Digital Summit in Kerala, #FUTURE conclave that was held in Kochi.

Acknowledging that there was always a perception of Kerala not being ‘business-friendly” which made investors wary of making huge investments in the state, Vijayan said this was “slowly changing”. “We have only Kerala to market. Other states have enough land that they even provide it free of cost but we don’t have that much area. But we are trying to provide a good working atmosphere and all kinds of assistance from the government. This is what we are planning and we have held discussions with major companies like Nissan, Intel and many more. There is no more a sense of hopelessness in the state,” he said.

When it comes to land issues, Vijayan said acquisition was essential in the state to satisfy the bigger public good.

“We are short of land as you know. We understand the concern that some people have when they lose the little bit of land they own. However, it is necessary that we undertake such acquisitions to fulfil certain public needs. We are ready to provide adequate compensation and rehabilitation considering the plight of those who have to give up their land. People have been cooperative in this regard. People understand that we are not troubling them but we are doing it as we are out of options,” he said.

Last year came the standoff at Muthoot Finance. The trade unions questioned discontinuation of staff and shutdown of branches. The problem carried on till other companies facing financial issues followed suit.