MAHARASHTRA INDUSTRIAL POLICY: DESIRABLE FEATURES

DRAFT MAHARASHTRA STATE INDUSTRIAL POLICY
(SUBMISSION to the Principal Secretary, Industries,Energy & Labour Department, Government of Maharashtra. DATED 30.6.2011)


PART I - MAHARASHTRA INDUSTRIAL POLICY: DESIRABLE FEATURES

Industry has a major role in the national and particularly Maharashtra economy. The other two major components are the agricultural activity & services. But services are largely dependent on agriculture & industry. Thus industry is increasingly becoming a backbone to provide for basic needs of increasing population, to employ increasing number of working men & women & also to have a proper place of honor in the industry both at national and global level.

The efforts for industrial development during early decades after independence were in line with the planned development model of socialist countries while the efforts since 1991 have been oriented towards IMF/WB model of globalized market-centred private effort approach.

At present the industrial picture is mixed. Thousands of small-scale industries have been closed down & many medium & large-scale industries have become sick or have been taken over by foreign MNCs. New breed of small and medium industries are coming up. Simultaneously several industry-houses have ventured abroad by taking over units there – both small and big. We have to wait and see if they can make a success of them!

1.1 Rquired Bharatiya Perspective
It is necessary to have the Bharatiya perspective of “industry”, lest the policy will conform only to the post-industrial revolution western concepts.

1.2 The Right Development (Samyak Vikas) Path
The industrial policy has to be an integral part of the national (and state) development as well as economic policy. In fact state should first formulate the Right Development (Samyak Vikas) Policy for Maharashtra. The following guidelines are desirable.(Ref 1)

1.3 SAMYAK VIKAS Guidelines for Industrial Sector
1 The economic policies pursued should basically be in tune with the tenets of Samyak Vikas, the right development path must be adhered to in its true spirit.(Ref 2)
2 Integral view of geographical areas, economy sectors, sections of society, all round development of individuals is to be taken. All walks of life including social, cultural are to be optimally developed. Sub–optimization will create problems.
3 Use of natural resources must be within their sustainable capacity. This capacity can be enhanced with benign policies & actions. Sustainable development is an essential constituent of Samyak Vikas.
4 Realize full potential of technology. Use of appropriate technology
5 Development should be through social consciousness (Janachetana)- a mental frame of mind where even common people are inspired by the urge to improve and are ever prepared to work with initiative for realization of the goals.
6 Act on principle of decentralization within the state. Complementary centralized approach for dealing with giant problems & schemes as well as foreign institutions or MNCs may be used as necessary.
7 Dharma as the guiding & regulatory principle. Work for freedom through self-regulation, independent regulation, and government regulation in that order of preference.(Ref 3)
8 Present & implement right yardsticks for development & evaluation.
9 Harness non-economic motivations like patriotism, sense of duty/responsibility, pursuit of excellence etc.
10 Taking the fruits of development to the disadvantaged sections on priority (Antyodaya)
11 Promotion of a concept of “industrial family” balancing and furthering interests of all stakeholders instead of a normal picture of antagonistic stakeholders (owners, managers, workers, suppliers, consumers and the outlying area where the unit is situated)
12 Treating national interests as paramount over any sectional interests

1.4 Objectives of Industrial Policy
1 To realize objectives of national security & self-reliance
2 Fulfilling requirements of the population & primarily its basic needs by converting raw materials into the required goods.
3 To provide gainful employment to the working age population
4 To improve industrial processes for better utilization & conservation of resources
5 To lay basis for long-term balanced, sustainable & rapid development,
6 To foster innovation & benign technological improvements

To achieve the Industrial Policy objectives and under the guidelines of Samyak Vikas, the following policy steps need to be taken.

1.5 Size of industry
A realistic two-pronged strategy can be envisaged as a major component of policy rgarding size of the industry:
1 Co-option & Extension of Decentralized Industrial Network
1.1 With rapid strides in the Information technology and communication sector it is today realistic to think of a national grid of decentralized industries all over the country that are networked. This will blend high technology with traditional skills and thereby set up an industrial base, which would be best suited to our concept of development. Where necessary, infrastructure will need to be built up.
1.2 Such a process of industrialization will sustain environment, utilize local skills and resources. As an added advantage, the industry will move out of the confines of a few urban centers.
1.3 Existing centers of decentralized production offer a good starting point for initiating efforts in this direction.
1.4 The large class of artisans as well as operators of traditional technology can be co-opted, with due training where required.
1.5 In fact the aim should be to make family as basic operating unit as far as possible. With rapid strides in computing, nanotech and flexible operating systems this should be possible to a large extent. This will usher in not only an industrial revolution but a social revolution too by dismantling that baneful crowded factory system.
1.6 The mother industry can take initiative to foster such family units provide them work and guidance and coordinate their work through IT networks.
1.7 Promotional, institutional & legal mechanisms shall be devised to increase appropriate linkages among cottage, small, medium & large industries.
2 World Class Bharatiya Corporations
2.1 The exploitation, inequalities and environmental damage wrecked by Corporations inspired by the western view is too painfully known.
2.2 In order to effectively fight these amoral entities we need powerful economic players. The state shall encourage world class Bharatiya corporations who would view consumption as a means and demonstrate to the world that economic development need not be a zero sum game.
2.3 The twin pronged strategy of reviving the old decentralized industrial network with modern back up and efforts to create world class Bharatiya Corporations based on Bharatiya Vision, will lead to the right form of industrialization.

1.6 Prioritization of industries
1 While setting up new & encouraging existing industries, a sense of priority shall be maintained.
2 Industries to be encouraged
-based on agricultural raw materials available nearby
-based on minerals available nearby or within the country.
-based on talent locally available
-cottage, tiny, small, medium, large industries generally in that order
-industry in co-operative sector where the members themselves are participating in the day-to-day operations.
-labour intensive
-those specified in the plan (national, state, district etc) or fulfilling plan objectives in a better way,
-self-supporting (not requiring permanent props like subsidies, lower taxes etc.)
-producing goods of needs category
-goods with large value-addition using local talents
-industrial units by artisans themselves
- Industries which provide jobs to those who live in the vicinity of the manufacturing unit
3 Industries to be discouraged
-polluting industries
-energy guzzling ones
-harmful products
-hazardous
4 Other industries may develop on their own getting normal facilities

1.7 Balanced industrial development
1 Balanced industrial development of various regions shall be attempted. However certain regions may not be suitable for modern day industries & they may concentrate on non-industrial economic activities.
2 The industrial areas shall be interspersed with residential areas so that the employees do not spend excessive time for traveling to work.
3 Where feasible, educational institutions should also be located near industries so that the students can get practical training & the industry the suitable talent.

1.8 Location of Industry
1 A comprehensive industrial location policy shall be formulated to include & improve upon the various present guidelines
2 Generally big industrial units shall not be located in the crowded cities. Existing units shall be encouraged to move out.
3 Big units can be located in the industrially underdeveloped or undeveloped areas so as to aid spread of industrialization. This will also spur establishment of small & cottage industries in such new areas. The policy should provide incentives to offset the disadvantage of moving in such areas.
4 To the extent feasible large units shall be located near the source of raw material e.g. a power station near the coal mine, textile unit in cotton producing area
5 Fertile land shall not be used for setting up of industrial units
6 After studying the presently operating industrial clusters like Ludhiana, Tirupur etc, new clusters can be planned to be located at appropriate locations.
7 Pollution of any kind & particularly of large water tanks & rivers shall be avoided while locating polluting industries, if any.
8 Hazardous industries should not be located in & around populated areas. Non-disclosure of hazardous nature of products shall be severely punished.

1.9 Land use, acquisition, R&R policy
There have been much debate and agitations against the present policy of government of acquiring large tracts of land and allocating to industry without adequate regard to the interests of dispossessed as well as other dependents. Hence state government must formulate a comprehensive policy covering use of land in the state, acquisition guidelines for various uses and proper rehabilitation of the project affected persons including land holders and those depending on existing arrangement for their earnings and survival. (see suggestions for this mentioned in part III)

1.10 Ownership of industry
1 As far as possible, the industry shall be owned by all those who are regularly working in it in some capacity.
2 The employers must be encouraged to give some ownership of the enterprise to the employees.
3 Apart from ownership, the employees must be given appropriate representation in the management of the company starting from the board to the shop level committee. To make participative management more effective, the employee representatives must be trained, empowered & involved with open mind. They shall also be held accountable for results.
4 Cooperative enterprises, since they bring in democratic spirit, deserve encouragement & some statutory concessions but not subsidies or government contributions. Among the cooperatives those whose members themselves work regularly for the enterprise, shall be preferred.
5 Among the big enterprises 100% owned enterprises by foreigners or small group of persons shall be taxed at highest with some concessions for widespread ownership of equity capital.
6 Experiments like labourization, trusteeship, institutional ownership, independent professional supervisory board shall be encouraged. Proper legal framework & recognition needs to be provided by studying successfully operating models.
7 National enterprises shall normally be owned by nationals. Foreign ownership shall be discouraged.
8 Interlocking ownership & common directorship shall be discouraged to prevent misuse of SSI concessions
9 Where appropriate, municipalities shall be allowed to set up an enterprise related to city administration e.g. waste conversion to manure.
10 Shifting of industrial units to take undue advantage of regional subsidies / concessions should be punished.

1.11 Encouraging Entrepreneurship
1 Entrepreneur is the starting point for a private initiative & needs to be encouraged by various means to start a viable enterprise as per the perspective plan for the area.
2 Entrepreneurship is a judicious combination of the right attitude, dedicated application & variety of skills. This is scarce. Hence not only existing entrepreneurs deserve encouragement but serious steps have to be taken to develop an entrepreneurial spirit among the promising youth. This includes creation of an encouraging atmosphere to be an entrepreneur in industrial training institutes, technical schools & engineering / other technological colleges.
3 Enough attention has to be given to develop professional approach among budding entrepreneurs right in the training school & college. This aspect needs to be stressed at every level even thereafter.

1.12 Starting an Industry
1 There should be no hassles to start an industry particularly cottage, tiny or small scale except that the habitat should not be presented with problems.
2 No licence shall be required for these categories but government or regulatory authority shall have right to refuse registration for specified reasons like national security, criminal activity or violation of laws. Anybody starting an industry should apply for a registration in a specified format & the same shall be automatically deemed to have been granted. All transactions of the industrial unit must quote the registration number auto-generated while applying.
3 The entrepreneur wishing to start an industrial unit must have an appropriate training in that trade before starting the unit. This is essential to ensure better success rate & quality as well technical innovation. Higher technical qualification & practical experience will entitle the entrepreneur to higher initial concessions. For family-based industries or artisans, working in the family unit can constitute the training for eligibility.

1.13 Sick Industries
1 Procedure to identify sick industry & to get indications that it is going to be sick, is already in place.
2 The lending banks must take some proactive steps to analyze working of sick-to-be units along with a professional agency. This will put that unit on alert & also it may be possible that genuine help becomes available in time & prevents sickness.
3 Those industries, which are obviously sick, need not be artificially kept alive, as this is counterproductive.
4 New legal methods need to be put in place to utilize assets of sick industries for productive purposes pending final dissolution or takeover or sale. Such arrangement shall be without prejudice to the rights of various parties. If this is not done, such assets are underutilized, get progressively deteriorated or totally destroyed. Such national loss must be prevented or at least minimized.
5 Where industry has turned sick due to the willful default on the part of managing shareholders, their names shall be given wide publicity by lenders so that a pressure is built upon them for payment & others dealing with them are alerted

1.14 Closure of Industry
1 There is hardly any point in keeping a terminally sick unit artificially alive. This must be allowed to be closed temporarily or finally.
2 To explore possibilities of running the unit by another management or with alternative arrangement, three months’ notice shall be given by the closing unit to the government, recognized union in the unit, specified chambers of industry & nationally recognized unions. This will apply for medium & large-scale units. Such experiments will have to be closely monitored.
3 Where the employees want to run the industry themselves, they shall be given priority over others subject to viability.
4 A tripartite committee should be formed to recommend guidelines & the procedure to be followed for revival of industry where closure notice is given.
5 In no case the owners shall be forced to run the industrial unit against their wishes but the disposal shall be as per the guidelines.

1.15 Role of Government
1 Prepare indicative plans for next 1 year as well as 5 years & 20 years
2 To monitor industry economy, publish data regularly & encourage public debate on
- deviations from plans
- possible corrective actions
- unforeseen circumstances & suggestions for response by various agencies Central & State Govts, industry bodies & various sectors.
3 Plan & provide for infrastructure & particularly in rural areas
4 Explore identify, select & initiate R & D efforts to derive maximum benefit out of advances in science & technology.
5 Organize institutional structure for seed capital to
- first generation skilled entrepreneurs
- priority demonstrative projects for infrastructure, employment, novel ideas etc.
6 Regulation of economic activity in the desired channels
7 Encourage creative agencies & experiments. Also weed out destructive tendencies.
8 Even in the changed situation, promotional role of government continues & it must be discharged in an unobtrusive facilitator’s mode. Some new initiatives may also be necessary.
9 Monitoring international scene & apprising local industries of emerging opportunities & threats.
10 Education & training to suit changing requirements will also continue to demand governmental initiative & action.
11 There has to be an active interface between the industry and the academic institutions. This will solve lacunae in having relevant syllabus, proper orientation of students towards the industry etc. Government should initiate and encourage this.
12 Marketing data tehsil wise or district wise shall be collected and made available on website and through local radio.
13 Government may not intervene every now & then & everywhere but it surely can give guidance periodically to the industrial sector which shall not be binding or enforceable. This is essential to counter runaway tendencies due to free market operation. A non-interfering governmental monitoring agency can be set up.

1.16 Licensing
1 Licensing shall be abolished for cottage, tiny and small-scale industries. And also for most of the items except explosives, hazardous substances, defence items etc. This may be retained for foreign enterprises.
2 Registration of every unit undertaking manufacturing activity will be compulsory for monitoring & regulation. Registration shall be automatic.
3 Government shall however retain powers to introduce controls when situation goes out of hand or under extraordinary circumstances.

1.17 Foreign Enterprise
1 Foreign enterprises, if at all they are to be allowed, must be on the test of national interests & their coming, operation & going shall be at the sole discretion of Bharatiya government.
2 Their operation must conform to national interests
3 No extra concession should be extended to foreigners. Reasonable restrictions should apply to foreign enterprises.
4 No government job should be offered to foreigners without first offering to Bharatiya companies. Even if a job has to be offered to a foreign enterprise e.g. due to some unique technology etc., it should be done through a Bharatiya enterprise which in turn can pick up the necessary expertise during this job execution.
5 Utilisation of foreign capital should be in the manner most advantageous to the country e.g. where they have a reach in foreign markets, they can operate 100% EOU

1.18 Public Sector
1 Normally government should avoid carrying out business or establish a manufacturing unit. This is better left to the initiative of the citizens.
2 The case of existence of public sector must be decided upon realistically. It is not an end itself but useful means to fulfill industrial and economic policy aims & march towards achieving developmental goals.
3 Under the following circumstances, a public sector unit can be established
1.For a security related aspect
2.As a public utility which needs to work to promote development & not necessarily on commercial considerations.
3.As one of the many units among a particular sector supplying an essential goods or services e.g. power, water, essential drug, airlines, railways.
4.As a proving unit for frontier technology
4 The following special considerations may also call for a public sector unit
1.Establishing a unit requiring a large investment normally not forthcoming from local private sector.
2.A unit on experimental basis in a very new area where returns cannot be foreseen in the immediate future
3.A unit in a remote area as a pioneer to promote industrial activity.
4.A training unit for tribal areas
However, in case of these units, they should be handed over to the local initiative at the earliest.
5 The political leadership has so far failed to stop day-to-day interference in the working of public sector units in spite of promising to do so. The assets & facilities of public sector units often get used for political ends. This must be stopped & full autonomy given to PSUs. Then there can be a substantial improvement in the performance of PSUs. Even in many advanced countries of the world PSUs are performing better than their counterparts in the private sector.
6 Sick PSUs should be closed down to save on public money.

1.19 Agro-industries
1 First preference for type of industry shall normally be for those based on agricultural raw materials since they have the following additional advantages
1.1 based on locally available raw material which is also renewable & hence enables sustainable development.
1.2 can be in small sector & located in rural areas enabling widespread entrepreneurship
1.3 usually not polluting.
1.4 location in rural areas also dampens urbanization.
1.5 further advantages can be decentralized manufacture, nearness to source of raw materials, reduction in waste of agricultural produce, possibility of local market or in a nearby town or village, agriculturist getting a better price, employment & purchasing power increase in the rural areas.
2 For agro-industries to come up near the farms, available appropriate technology has to be recorded & made freely available to rural entrepreneurs. This has to be backed by extensive massive promotional as well as training programmes.
3 Existing ITI & select engineering colleges can take lead for training, consultancy & extension service for agro industry.
4 Appropriate incentive system has to be put in place by governments with encouragement for village-level infrastructure built-up by the Gramasabha or a co-operative society open to all.
5 A technology mission on Use of Biomass for production of chemicals, oils, fuels, power & plastics needs to be instituted to derive advantages enumerated above.

1.20 Export-oriented Units
1 In spite various schemes for exports promotion & for assistance to exporting units, the real thrust on export front has not emerged when compared to the potential.
2 The NRI community can be persuaded to undertake nursing of exporting units in Bharat. This new initiative can yield handsome results.

1.20 Social Audit
1 Social audit for select public enterprises shall be arranged by government and its results should be published.
2 Private units shall be encouraged to publish such social audits for their enterprises.
3 The social audit, inter alia, should include
3.1 Use of renewable & non-renewable resources
3.2 Conservation & earning of foreign exchange (as long as this item is relevant)
3.3 Employment generated (productive & gainful)
3.4 Inculcation of values among the staff & the students in the surrounding are
3.5 Literacy in the surrounding area
3.6 Primary health services in the area
3.7 Arousal of Janachetana for self-effort in local development
3.8 Promotion of cultural values like caring, truthfulness, integral approach, morally correct & elevating advertisements etc.
3.9 Balancing the interests of all stakeholders including consumers, suppliers, distributors, dealers, employees etc.
4 The social audit shall be compulsory for units with over Rs 500 crores annual turnover.

REFERENCES
(Ref 1) – National Development Policy formulated by Ekatma Vichar Kendra
(Ref 2) – National Economic Policy formulated by Ekatma Vichar Kendra
(Ref 3) – Dharma is a code of conduct for sustenance of society and advancement of individuals materially, morally and spiritually in a harmonious manner. Constitution is a dharma but dharma goes further and gives guidance on moral duties etc. The yamas (ahimsa, satya, asteya, brahmacharya, aparigriha) and niyamas (shouch, santosh, tapas, swadhyaya, ishwarpranidhana) constitute important expectations from everybody for social and individual dharana (sustenance).

PART I I - MAHARASHTRA INDUSTRIAL POLICY: SPECIFIC SUGGESTIONS

2.1 Social framework
1 Government action of promoting industry should not promote urbanization with attendant problems like land shortage and price increase, slums, deterioration of civic amenities, increase in social problems and crime etc.
2 Old artisan class should be supported to become an industry owning class by way of technological, financial and mentoring support. A task force for this should be established to recommend specific actions.
3 Activities like Dalit Chamber of Commerce must be welcomed and supported with complimentary help like entrepreneurship development programme for aspiring dalit entrepreneurs.
4 For small and medium enterprises, cooperative form should be encouraged by giving specific incentives. Also small cooperative industrial estates should be preferred. Similar is the case for cooperative warehouses and small ship repairing enterprises.

2.2 Ecological framework
1 No activity at site should be permitted before environment imact assessment report is prepared, scrutinized and approved authorities.
2 For every project, the government should insist on realistic cost-benefit analysis which should take into account environmental costs
3 Studies should be conducted through universities to assess carrying capacity of environment and recommend ways and means to increase this capacity in select districts.
4 Bio Fuel : As a policy state will encourage use of Bio fuels – ethanol and Biodiesel for mass transportation and stationary engines applications
4.1 Ethanol produced by sugar mills shall be purchased at rates announced by Central Govt time to time for blending it with Diesel (commercial—mineral) at the Depot level of state road transport buses and city transport buses to the extent of 5% to 10% .This will reduce the fuel expenses as well as emissions gases will have less percentage of toxic gases.
4.2 The private efforts of producing Bio Diesel shall be encouraged .The subsidy shall be given for plantation of non edible oil seeds, oil extraction ,filtration,deeterification ,processing machinery etc.No tax will be levied being an agro product. The Biodiesel shall be mixed with Diesel to extent of 20%.
4.3 For the development of this activity a Biofuel development task force/board shall be formed and detailed policy guideline will be prepared.

2.3 Institutional framework
1 It is necessary to increase efficiency of the institutions related with Industry promotion in the state. Clear and comprehensive details and speedy approvals are still a distant dream.

2 Government should collect and publish data on website giving the value of industrial goods brought in from other districts of the state, other states of Bharat and also goods sent out to the other districts of the state and other states of Bharat as well as exported to other countries. This data should be published districtwise. This will enable to gauge industrial progress so far and help planning for future.
3 A tripartite committee comprising of Minister of Industry, industry associations and labour organizations should be formed. Its meetings shall be scrupulously held every quarter and minutes should be put on website.

2.4 Industry sectors in focus for growth
The following sectors hold a promise for future and hence must be focused upon for action, encouragement and monitoring:

1 Infrastructure : Roads, Water supply, Environmentally safe disposal of effluents(solid liquid) , Power, Telecommunication, Sea/air ports
2 Manufacturing :
2.1 Agro/food processing and fruit processing
2.2 Automobiles and auto components
2.3 Electronics(Industrial & domestic)
2.4 I.T. Hardware & peripherals
2.5 Pharma – Ayurvedic ,allopathic etc
2.6 Textiles & garments
2.7 Mining & mineral processing
2.8 Cement and steel/metals

3 Services :
3.1 I.T. software, IT enabling services
3.2 Biotechnology. Proper regulation has to be ensured by state without totally depending on central initiatives.
3.3 Nano technology. Proper regulation has to be ensured by state without totally depending on central initiatives.
3.4 Health services
3.5 Tourism & hospitality (see suggestions for tourism in part III)
3.6 Entertainment & media (see suggestion under incentives below)
3.7 Financial Services
3.8 Knowledge based services –Audit, Law, KPO

4 SSI Sector :
4.1 Manufacturing and processing local produce
4.2 Cluster development
4.3 Common facilities development for quality control, upgrading ,training
4.4 Preferential purchasing & reservation policy
4.5 Creating separate Norms/standards (e.g. K.V.I.C.)
4.6 Handicrafts & semi mechanized products
4.7 Development of ancillary units/clusters
4.8 Incentive/subsidy Norms

5 Renewable energy sources :
5.1 Power generation by wind energy ,solar PV, Bio mass, Co- Generation
5.2 Development of Bio-fuels,
5.2.1 bending of ethanol with Petrol and /or Diesel,
5.2.2 Cultivation of Non edible oil seeds
5.2.3 Extraction and processing of Bio- Diesel
5.3 Bio Gas development

2.5 Decentralization
1 Government should declare in the policy and also through budget that focus will be on decentralization of industrial sector and particularly on family based manufacture.
2 A standing “Committee on Family-based Manufacturing Structure” should be constituted for a 5-year tenure to work out promotional scheme for this idea.
3 Industries in rural and remote areas should get better incentives based on employment, value added and development of the adjoining area.
4 Growth Centres:
4.1 No growth centre should be planned near existing cities.
4.3 Small growth centres should be planned in rural areas.
4.4 Big growth centre should be planned on a barren land away from any existing city. Such a growth centre will have separate zone for accommodating SSI units and ancillary unit and/or allocation of land for Co-op industrial estate.

2.6 Infrastructure
1 Infrastructure is both a business opportunity for industry and also a facilitative requirement for general industrial growth.
2 Before upgrading the existing infrastructure, optimum utilization of the
existing infrastructure has to be ensured. Refrain from increasing the infrastructure above the sustainable level.
3 Some advance planning for infrastructure has to be done particularly in undeveloped and rural areas
4 Power position in the state has been dismal ever since Enron project was thrust upon MSEB by successive governments. Sadly solution for power relief is not in sight.
4.1 Since government has been unable to do much during the last 10 years a committee of power professionals and potential power producers should be constituted to advise and aid government.
4.2 Distributed power generation by non-conventional means should be encouraged for industrial estates in rural areas
4.3 Power generating unit should be located near the coal pitheads or near the load centre.
4.4 It shall be made mandatory to start co-generation for profit making sugar mills for captive use and surplus be given for state grid.

5 Ports:
Maharashtra has coastline of 720 kms with two major ports Mumbai, JNPT and many medium and minor ports as also fishing ports and private jetty’s dedicated for oil handling for refineries and coal handling for power projects. Three/four privately developed medium sized ports are coming up in the Konkan region in Raigad and Ratnagiri districts ,which will handle cargo (liquid & bulk) containers and oil & liquid cargo, as also perishable / refrigerated goods .All these ports shall have modern facilities for Bulk and container cargo handling ,tank farm, coal handling facility etc and warehouses and cold storages. All the major and minor ports shall have direct connectivity with road to national highways (4 lanes) and rail connectivity with Kokan Railways, Central Railway, as well as western railway for inward connectivity with the rest of the nation.
5.1 Port related activities : a separate Policy shall be designed by Maharashtra Maritime Board for shipbuilding ,ship repairs, dry and wet docks, ship breaking, supply services to shipping & fishing sector activities.
5.2 Developing shipyards involves heavy investment as such these projects shall be in PPP mode and treated as Mega projects with subsidies and tax concessions
5.3 Coastal cargo services shall be encouraged; the facilities for handling and transportation shall be developed.
5.4 The export of perishable cargo and refrigerated cargo shall be promoted to Middle East and nearby countries shall be promotes through these medium sized ports. The warehousing & handling facilities shall be developed through PPP.
5.5 Training ship, naval academy, institutions for Trade related Vocational courses shall be started for gearing up the local youths to take up jobs.

6 Roads :
5.6 All the state highways connecting Mumbai, Pune, Nasik, Aurangabad, Nagpur to nearby Industrial areas also shall be four lanes.
5.7 All the national and state highways shall have all the facilities for fueling vehicles repairing, rest rooms, restaurants etc. (there shall be no liquor shops? Bars on any of the highways to avoid accidents)
5.8 Warehousing facilities, transportation and logistical support facilities for loading/unloading etc. shall be available at all the industrial areas.
7 PURA
Provision of Urban facilities in Rural Areas was advocated by our former President Abdul Kalam. This is very essential to counter urbanization, promotion of industry & employment in rural areas, reducing rising income inequalities. A programme with definite goal posts must be formulated and impelemented.

2.7 Entrepreneurship
1 We still do not have proper institutions where up-to-date data & guidance from industry experts about starting & running an industry is available easily, cheerfully & at minimum cost. Present chain of Small Industry Service Institutes (SISI) & District Industry Centers (DIC) has not lived up to expectations. They need to be revamped to suit present circumstances & also supplemented by NGOs & private professional efforts.
2 The industry associations & senior industrialists need to start a scheme Udyog Saathi (Industry Mentor) to adopt budding entrepreneurs & guide them through initial crucial years. Such mentoring has always shown good results. Arrangements for providing technical training in processes must be made available by Govt. agencies as well as privately. Also marketing assistance needs to be made available.
3 Every government has accepted a need to reduce red tape & reduce ‘inspector raj’ but the problem remains. Government should appoint a private consultant to formulate a regulatory procedure for cottage, tiny & small scale industries. That is likely to be faster & may result into an acceptable piece of legislation.
4 Capital is one of the most difficult hurdles for a first generation entrepreneur. Several schemes do exist to encourage them but they need to be supplemented by Venture Capital Funds.
5 Small-scale entrepreneurs single-handedly deal with marketing, production, quality control, accounts, finance, technical innovation etc. They need a one-source guidance or help in one or more of these matters. A pilot project should be started by a development institution to provide these consultancy services (e.g. MITCON) & also private senior professionals can be encouraged to provide such comprehensive services.
6 Financial institutions & banks need to develop expertise, where necessary with the help of industry experts, to sniff early signals of sickness & take remedial steps including providing special technical, managerial & financial assistance to the affected entrepreneurs. This can prevent sickness in industry to some extent & will also reduce NPA. In case of failure to repay loan installments, the representative of the bank should be suitably involved in decision making in the unit with a veto power.

2.8 Employment
1 Employment is the main source of livelihood and self-fulfillment for most women and men. It is not difficult to recognize that gainful employment is the best development measure for a person.
2 Industries providing more employment (labour intensive) must be encouraged. (see suggestion under incentives below)

2.9 Training
1 Strengthening and upgrading technical competence of labour has to be done on continuing basis.
2 Upgrading of vocational institutions must be done through government or private efforts.
3 Government should encourage industry to set up training, retraining and advanced technology imparting institutes with due incentives near industrial establishments / clusters in cities and rural areas.
4 “Employability” of the prospective and existing employees has to be increased to take advantage of available opportunities. Sustainability aspect should receive due weightage in such trainings.

2.10 Balanced development
1 The employment in five top districts of the state is 51.55% of the total as per the economic census of 2005 - Mumbai 26.26 lakh (22.21%), Pune 11.31 lakh (9.57%), Thane 10.38 lakh (8.78%), Kolhapur 7.34 lakh (6.21%), Aurangabad 5.76 lakh (4.87%).
2 Hence the industrial promotion efforts of the state government must be directed to Vidarbha, Marathwada and Khandesh.

2.11 Incentives
1 A scheme should be designed to encourage employment by giving cash grants, tax concessions, public rewards etc. For this purpose an Employment Index has to be devised so that those who employ “more” and “less” could be identified to reward or penalize.
2 For sectors like media, entertainment etc. affecting social mind, an incentive scheme rewarding “good” and “penalizing” products must be designed. Since these sectors may oppose such scheme by government on the specious pleas of “unfettered freedom of expression”, a Social Responsibility Commission should be appointed to devise the scheme and provide advise in case of disputes.
3 Development of processes and technology as per needs of the local communities of the state is essential. An incentive scheme for recognition and rewarding of such appropriate process and technology development should be instituted.

2.12 Removing Business Impediments – Plugging Loopholes
1 Octroi Abolition: While all over India octroi has been more or less abolished but Maharashtra government sticks to it giving lame excuse of suitable alternative not available. But in Navi Mumbai octroi is abolished and the city is prospering. Where there is a will there is a way! The “progressive” Maharashtra politicians should do away with national waste by abolishing this out-of-date levy which generates huge amount of black money besides wastage of precious fuel and time of all concerned.
2 The government must tighten screws over a class of pseudo-entrepreneurs who only do paper work of starting a unit and pocket subsidies and never establish units.
3 A task force should be appointed to fulfill oft repeated promise of government to reduce “lnspector Raj”. Only one comprehensive law should be applicable to cottage and small industries and there should be only one return to be filed by them.

PART III - MAHARASHTRA INDUSTRIAL POLICY: SUGGESTIONS FOR LAND USE & TOURISM

A) Important elements in the Land use, acquisition, R&R policy
The first step in initiating the use of land for industrial projects is a careful understanding of the different contributions of land to human well-being and the complex nature of rights and entitlements in it.
1 Land Availability
1 We have as much as 162 million hectares of arable land nationally– over 54% of our landmass. China has only 13% of land as arable.
2 We do not cultivate 40 million hectares of our arable land.
3 Net sown area has not risen since ‘70s.

2 Consult grampanchayats
Institutional failure of democracy is apparent when we see that the land acquisitions should have been hotly debated in the gram panchayats and gramsabhas. Make their consent compulsory for land purchase by industrialists or acquisition by government. There should be a set procedure including debate and impartial evaluation if the refusal of grampanchayat is to be set aside.

3 Coopt the land loosers
It is essential to make the land losers also the beneficiaries of acquisition so that the land losers would not feel alienated but would welcome acquisition. It is necessary to evolve tailor-made schemes to suit particular acquisitions, so that they will be smooth, speedy, litigation-free and beneficial to all concerned. Proper planning, adequate counselling, and timely mediation with different groups of land losers should be resorted to.

4 government should refrain from acquiring
1 fertile land
2 land under well or canal irrigation
3 land near urban agglomeration
4 land from coastal areas as far as possible
5 land from ecologically sensitive area

5 priority for land acquisition should be
1 barren land with minimum rainfall
2 land turned infertile due to various reasons
3 land away from urban agglomeration
4 land which cannot be profitably used for agriculture
5 land with low agricultural output and productivity

6 for important projects like power plant etc. land bank should be created by the state government, it should be developed, environment clearance obtained and then auctioned for the approved type of project. This will avoid hassles for the industrialists and government will make money which can be ploughed back for more land development.

7 Industry can be allowed to directly purchase land from land owners subject to certain limits and avoiding prohibited / areas and also giving due consideration to the ecological sensitivities.

8 The tendency of industry to possess excessive land must be curbed allowing for due expansion at that site. Excess land should be transferred back to the government even when the entity is sold out.

9 Rehabilation of project affected persons (PAPs)
9.1 The PAPs should be provided with
- compensation at market rate or opportunity cost, whichever is higher, for the land acquired
- employment opportunity for the person or his dependent. One-person-per-family principle
- displaced persons to be trained in ITI or such other institution
- Deposits in Bank, the interest of which accrues to the displaced persons on a regular basis or annuities for 35 years
- some equity in the project
- some land or unit near project after development by the project authorities for establishing profitable enterprise
9.2 Acquired area residents shall be provided with
- excellent urban facilities including special focus on education and health
- Primary health centers in the surrounding areas
- Potable water scheme
- Road network improvement in the area
- Skill training facilities in the area

10 There should be a limit on acquisition of land in a given district / taluqa

11 Review this policy after every 25 years or earlier if warranted by a peculiar situation.

B) Important elements in Tourism policy
1 In Maharashtra the no. of tourists in 2009 were 2.37 (domestic) and 19.99 (foreign) lakhs. Domestic tourism is likely to grow at 20% p.a.

2 Given the low level of exploitation of India’s tourism potential, there is scope for tourism encouragement.

3 Cost of employment creation is low in the tourism sector, and hence the opportunities in this sector must be utilized to better the lot of people who can use this opportunity.

4 Objectives of tourism development
4.1 to foster understanding between people, promote national integration among Bharatiyas
4.2 to preserve, enrich and promote Bharat’s cultural heritage.
4.3 to create employment opportunities and bring about socio-economic benefits to the community

5 The safety and security of tourists are of primary importance both from the point of view of tourism development and the national pride.

6 Government must introduce regulatory measures to ensure social, cultural and environmental sustainability and also to avoid possible adverse effects such as cultural pollution and degradation of environment. The principle of sustainable development stipulates that the level of development does not exceed the carrying capacity of the area.

7 It should be the policy of government to encourage people’s participation in tourism development including Panchayati Raj institutions, local bodies, Co-operatives, non-governmental organisations and enterprising local youth. It has to be ensured that the local community is fully involved and the benefits of tourism accrue to them.

8 Focused attention should be given for the integrated development of identified centres with well directed public participation.

9 Medical tourism is growing exponentially in Bharat due to state-of-art medical facilities, expert doctors and low cost of treatment. Proper review of this and planned development to utilize this opportunity are necessary.

10 Adventure tourism is also growing. This should be regulated from safety and environmental point of view.
11 Important pilgrimage centres of Vaidikas, Jains and Buddhists should be provided with facilities

11 Socially corrupting tourism like casinos, indecent exposure on beaches, rave parties etc should be banned forthwith.
12 Government should undertake research, prepare master plans, and facilitate formulation of of promotional and facilities planning strategies.