TN to woo cos with easier land buy norms

Pushed to the edge by states like Gujarat and Maharashtra in the race for a slew of big-ticket investments, the Jayalalithaa government in Tamil Nadu is all set to revisit its industry policy lock, stock and barrel. Amidst the increasing competition among states in luring major companies to set up their facilities, Tamil Nadu is bracing up for the challenge by incorporating more incentives in the proposed industry policy.

“In the recent past, certain fast growing states have formulated liberalised investment policies to attract more domestic and foreign investment. In such a competitive environment, to improve the momentum of growth, a comprehensive new industrial policy would be brought out,” says a policy note on industries.

The government, in a bid a to attract more investments into the state is betting big on making available land to corporates. It is planning a mutually beneficial and partnership-based land policy as industrialisation fundamentally involves acquisition of land. “The government wants to avoid Singur-type episodes, which dented the image of the Budhadev government in West Bengal and had a negative impact on the state elections,” says an industry expert.

Higher priority would be accorded to infrastructure planning as industrial development depends on the spread and quality of the infrastructure available. The government will take up the planning part more seriously. It would be done by anticipating future infrastructure needs and evaluating the scope for attracting private investment into infrastructure. An apex body called Tamil Nadu Infrastructure Development Board will be created for this purpose.

Besides, the government is energising its nodal agencies such as Tamil Nadu Industrial Guidance and Export Promotion Bureau (Guidance Bureau), Tamil Nadu Industrial Development Corporation (TIDCO), State Industries Promotion Corporation of Tamil Nadu (SIPCOT) and Tamil Nadu Industrial Investment Corporation (TIIC). While the Guidance Bureau was set up with the objective of attracting major investment proposals, SIPCOT has been playing an important role in bringing in investment from multinational companies. As a prelude to the new industry policy, SIPCOT is planning to allot 100 acre of land each for setting up of separate industrial parks for investors from countries like Japan, South Korea, Finland, Germany and France to attract more foreign investments from them.

This time, the state is keen on having a balanced industrial growth across the state. Therefore, the need for spreading the new industries into all regions of the state, particularly, into less-developed regions of southern Tamil Nadu is being seriously debated. The state is planning the creation of industrial corridors, extension of special packages and creation of new infrastructure in such regions.

Apart from seeking to be the most industry-friendly state which can attract more number of new industrial projects of the big brands, both domestic and international, Tamil Nadu's new industrial policy will lay special emphasis on the newly emerging sectors like bio-technology, nanotechnology and pharmaceuticals. “The government wants to be a one-stop supermarket for industries who want to invest in the state,” says an official with the industry department on condition of anonymity.

According to the note, the policy of the government has been to maximise the welfare of the people of Tamil Nadu by creating gainful employment opportunities by the way of achieving higher and sustainable economic growth. The thrust has been on balanced regional development through greater private and public investment in manufacturing and infrastructure development.

Traditionally, Tamil Nadu has always been at the forefront of industrialisation with a strong presence in the manufacture of engineering and auto components, textiles, leather and sugar. When states started taking industrialisation initiatives after the liberlisation drive in the country, Tamil Nadu seized the opportunity and announced its industrial policy in 1992. The policy had facilitated the electronics and automobile industry revolution in Tamil Nadu by attracting major projects from industrial giants. These projects, in turn, triggered a multiplier effect by attracting a large number of auto and other ancillary industries.

Significantly, Tamil Nadu has been ranked the fifth-largest economy among the Indian states with the share of secondary sector being 27.39%. The total number of factories in the state has touched 26,122 and the value of industrial output was at Rs 3,00,801 crore during 2008-09. To give further steam to industrialisation, the Tamil Nadu government had brought out a pragmatic and far-sighted industrial policy in 2003 which paved the way for the electronics revolution in Tamil Nadu by attracting substantial foreign and domestic investment into the state.

To provide further momentum to the industrialisation drive, the Jayalalithaa's government is planning to build a Financial City in Chennai. The land, to an extent of 187 acre, has been identified in Sholinganallur and Perumbakkam villages of Rajiv Gandhi Salai for establishing the Financial City and media and entertainment park projects. The state has roped in the consortium led by PriceWaterhouse Coopers as consultants for the preparation of the comprehensive development plan. Once, TIDCO – the state nodal agency – finalises the report in consultation with the government, tenders will be floated for selection of developer as well as a joint-venture partner. The first phase of the Financial City project will be in an area of 25 acre.

On new industrial projects, the policy note says that the Tamil Nadu government has signed MoUs with several major industries for setting up their facilities in the state of which 30 are located in the industrial complexes of SIPCOT and of these 20 industries have already commenced production.