Thumbs up for industrial growth, policy still a concern

Industrial development in the state under the BJP rule has been above average, given the fact that the country has been facing economic slowdown partly due to financial crisis in the US since 2008-09.

If one looks at the last decade of the BJP rule, industry in Madhya Pradesh grew at a CAGR (compounded annual growth rate) of 14.49% from 2004 to 2012.

The exports at Indore SEZ have crossed Rs 1,289 crore during the first six months of the current fiscal as compared to `947 crore during the corresponding period of the previous year, thus marking a growth of more than 36%.

The total (annual) exports in 2006-07 were Rs 217 crore. While a lot has been done, concerns remain over proper implementation of the industrial policy and the pace of development of industrial infrastructure.

The industrial centres too are mainly concentrated around major cities. While the state government has announced 27 new growth centres, it will take time to develop infrastructure. At present, a weakening rupee and rise in cost of funds due to high interest rates is causing problems for the industry.

Except for the last one year, things have been good for the industry in the last five years, Pithampur Audyogik Sangathan president Gautam Kothari said.

Now global factors are causing problems for the industry.

While the imports have turned costly, the exporters too are not benefitting from a weak rupee. There is also a scope for further improvement in the bureaucracy to streamline the entire investment process, he added.

Last year was significant from the industry's point of view because of the global investors meet that took place in Indore.

A remarkable feature was that government gave equal importance to micro, small and medium enterprises (MSME) sector and signed 113 MoUs worth about Rs 670 crore in the sector.

However, the global investorsf meet was global only in name as very few foreign companies took part and almost all the speeches were in Hindi. If official figures are to be believed, the state has signed MoUs worth about Rs 4.5 lakh crore in the last two investors meet out of which production has started in projects worth Rs 1 lakh crore and another Rs 2 lakh crore worth of projects are in the pipeline.

The small-scale industry sector, however, is not too thrilled with the investment climate. gThe BJP government under chief minister Shivraj Singh Chouhan has made sincere efforts for industrial growth and to make the environment industrial friendly, but has been unsuccessful in this endeavour.

The main reason is the failure to implement the industrial policy in its true spirit. The bureaucratic red tape and corruption is still taking its toll on the industry, former president of association of industry Ashok Jaiswal told HT.

It will take some more time to create an industrial friendly atmosphere at par with Gujarat, he added.

The state government finally finished the construction of Crystal IT Park in October 2012 and gave it away on lease to the local IT companies. Land has also been allocated to TCS and Infosys in the super corridor for setting up development centres.

Land acquisitions for Pithampur-Betma industrial cluster and Delhi-Mumbai Industrial Corridor (DMIC) continued to hog the limelight with farmers opposed to the move and the government determined to acquire the land. The DMIC project has been delayed due to delay in the land acquisition, but some progress can be expected in the coming months.

Overall, the industry has had a good run in the past five years, but has been suffering due to falling rupee and high interest rates in the past few months.

The industry expects that the new government will carry out tax reforms and agree to introduction of goods and services tax (GST).