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Maharashtra needs to ramp up development portfolio to lure investors

"With Gujarat government extending its textile policy for another five years, Maharashtra is also redrafting its textile policy for 2017-22, which expired in March 2017. The earlier textile policy aimed at attracting investments, especially in the Vidarbha region, and the government was optimistic about raking in investments worth Rs 40,000 crore and creating 11 lakh jobs. However, from 2012-17, the target has not been met."

 

 

Maharashtra needs to ramp up development portfolio

 

With Gujarat government extending its textile policy for another five years, Maharashtra is also redrafting its textile policy for 2017-22, which expired in March 2017. The earlier textile policy aimed at attracting investments, especially in the Vidarbha region, and the government was optimistic about raking in investments worth Rs 40,000 crore and creating 11 lakh jobs. However, from 2012-17, the target has not been met.

Maharashtra needs to ramp up development portfolio to lure investors

 

State government analysts estimated investments in textile projects approved by financial institutions and in various phases of enforcement by March 2017 amount to Rs 16,371 crore, with the potential to generate 2.50 lakh jobs. But due to lesser government thrust, lack of interest from investors, poor state of infrastructure, growth targets were not been met. A comparative study of IEMs implemented in Gujarat and Maharashtra during 2014-15, revealed Gujarat implemented 19 textile projects comparatively in Maharashtra, no textile project were started during the year. In 2013-14, Gujarat received 20 projects, while Maharashtra got three.

Only a few big players like: Raymond, Siyarams, Suryalakshmi Mills and some public private partnerships, who have set up units in Vidarbha. Around 30 textile units of varying sizes have come up in the region during the policy period. The state has 16 textile parks, employing 23000 people. Another nine textile parks, announced by the state government, are in the pipeline. These haven’t been successful so far in enhancing production and employment. Most of the investments have gone to Gujarat, Tamil Nadu. To lure investments, the government taken various initiatives like: reducing the number of permissions required to set up units; cutting down bureaucracy. Yet other states are attracting more investments.

Initiatives taken

In January 2017, the Maharashtra government had announced plans to set up a garment park with an investment of Rs 300 crore at Solapur. This will generate employment for over 60,000 workers. The aim is to make the park a hub for uniform manufacturing. At present, Solapur has over 1000 garment units stitching uniforms worth Rs 1000 crore, employing over 60,000 workers. The government announced the setting up of a textile park in Sayane near Malegaon. The Maharashtra Industrial Development Corporation's (MIDC) regional office has acquired 113 hectares of land for the proposed textile park. But the progress has really been slow.

Maharashtra has attracted more than half of total FDIs in the country. The government has evolved an agro-industrial module for development of 20 districts along the Rs30,000 crore Nagpur-Mumbai Super-communication Expressway. Apart from constructing the 690-km stretch eight lane roads, the government has drawn up two major plans for development of metros and drought-hit districts.

The Centre and the state have taken decision on two dry ports at Jalna and Wardha. It is envisaged to make Nashik an industrial hub, Amravati a textile hub, and Aurangabad an industrial and tourism hub, through public-private partnership. Already, eight textile projects are under way in Aurangabad, according to government officials.

Vision 2025

By 2025, Maharashtra aims to be a $1 trillion economy, with investments mainly in infrastructure, IT, ICT and services sector. A report by FICCI-SPJIMR, highlights Maharashtra, with a GDP of $0.25 trillion, is the richest state in India, followed by Tamil Nadu ($0.17 trillion) and Uttar Pradesh ($0.16 trillion). Maharashtra reported a nominal gross state domestic product of $0.29 trillion in 2015-16. Thus, Maharashtra needs to grow by $0.71 trillion in the next nine years, i.e. over 2016-25, to achieve the $1 trillion-state status. The state would have to grow at a CAGR of 14.4 per cent in real terms to attain this mark by 2025. Compare this to the real rate of growth achieved in 2015-16 of 8.5 per cent, and the challenge becomes stark. The Handbook Of Statistics On Indian States reveals the investment rate in Maharashtra in 2014-15 was only 3.5 per cent. For Maharashtra to achieve 14.4 per cent growth by 2025, investment in the state will need to grow to at least 12.24 per cent per year from the current investment rate.

 
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