The Devendra Fadnavis government in Maharashtra has decided to unlock more agricultural land for industrial use as the state government pulls all stops to attract more investment and maintain the status of a preferred business destination.
The floor space index (FSI) for setting up industries in agriculture zone is set to be raised by 150 per cent from 0.2 to 0.5 now. FSI is a development tool that defines the extent of construction permissible on a plot. It is the ratio of built-up area to the total plot area.
Besides this, the government has launched the process of doing away with provisions of the Bombay Tenancy and Agriculture Lands Act, 1948, which impose restrictions on the use of agricultural land for industrial use. Following a meeting chaired by Fadnavis last month, the state Industries Department has approached the Revenue department with a proposal in this regard, senior official confirmed. “The department has sent comments to the Revenue department for amending the Act for purchase of land for “genuine” industrial purpose,” a presentation made by the Industries department to Fadnavis on the proposal’s status said.
But the initiative to roll out a red carpet to industry captains won’t just be restricted to Maharashtra’s semi urban and urban centres. Senior government officials confirmed that a cabinet note had been finalised to do away with what is seen as the restrictive Industrial Location Policy (ILP) for the Mumbai Metropolitan Region. Further the government is also planning to ease the River Regulation Zone policy to ease norms pertaining to industrial activity in proximity to a river’s high flood line (HFL). The government has already sought the opinion of the law and judiciary departments in this regard, officials said.
Meant to de-congest and ensure pollution free environment in the mostly urbanised region, the policy, which was first formulated in 1974, put restrictions on the development of industrial units except cotton textile industries, godowns, service industrial estate in the MMR. The government had earlier eased the policy norm once in 1999 allowing new units and additional investment in diversification, modernisation, or renovation of a mega project (involving an investment of over Rs. 1500 crore) in the auto sector after obtaining a clearance from the Maharashtra Pollution Control Board (MPCB).
Industry captains had lobbied for the ILP’s withdrawal. They had argued that the the revised pollution control norms had already set a higher bar for polluting industries. With land prices in the MMR skyrocketing, a senior government official said that it was unlikely that a manufacturing firm would invest afresh in the region. “The policy’s norms only disincentives expansion plans of existing industries,” the official said. An instance where an oil refinery’s modernization plans were delayed by almost a year on account of the policy was also shared.
Also being considered is a move to anoint the Maharashtra Industrial Development Corporation (MIDC) as a Special Planning Authority for all industrial zones earmarked in regional and development plans of urban pockets in the state. A senior official said that the move would do away with the requirement of industries approaching local town planning agencies for various land and building approvals.
Meanwhile, Fadnavis, who reviewed initiatives taken to improve ease of doing business in Maharashtra on Thursday, ordered action against industries who fail to utilise the allotted land within five years after having obtained non agriculture (NA) permission. “There are several instances where the land has not been put to use. The administration must impose a penalty in such cases initially, and then take back the land,” Fadnavis said.
During the meeting, heads of eight government departments and the Mumbai civic corporations made presentations on their plans to reduce the number of approvals required for setting up industries and the time taken for these. With 65 permissions or approvals needed to set up a business in the state now, the World Bank recently rated Maharashtra at the bottom of the pack at 142 when it comes to ease of doing business. On November 17, Fadnavis had directed all departments to bring down permissions sought by at least 25 per cent and reduce the time taken for these to 10 per cent.
Apurva Chandra, Principal Secretary, Industries, said that the “MIDC has already brought down the number of permissions from 14 to five.” Prior permissions for change of use, provisional fire approvals, and various infrastructure facilities including water, power, drainage, sewage treatment plants have been removed. Ajoy Mehta, Principal Secretary, Environment, said that his department was drafting a detailed policy to simplify environmental clearances. Mumbai civic commissioner Sitaram Kunte informed that “permission for building approvals will be brought down from 25 to 16.”
Fadnavis has told all departments to move towards a deemed approval and self certification regime wherever possible. For statutory approvals, the government is exploring online permissions and standard operating procedures. the chief minister has directed all departments to reform the approvals process before May, 2015.
He has set a goal of improving the ease of doing business ranking to 50 in the medium term.