Maharashtra budget: Despite Make in Maharashtra push, modest Rs 2,650-cr outlay for industry

`600 cr for Shendra, Bidkin townships on DMIC; `1,000 crore for electricity at subsidised tariff to industries in Vidarbha and Marathwada.

Written by MANASI PHADKE | Mumbai | Updated: March 19, 2016 4:57:40 am

Despite its zealous thrust on industrialising the state under its ambitious ‘Make in Maharashtra’ mission, the government’s allocation for the industries sector in its 2016-17 budget was comparatively muted.

While the BJP-led state government has entered into multi-crore investment proposals running into thousands of projects, promising a slew of incentives, it has set aside a modest Rs 2,650 crore for various benefits to be given to industries in the coming fiscal.

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The industrial townships of Shendra and Bidkin near Aurangabad, one of the first nodes of the Delhi-Mumbai Industrial Corridor (DMIC) to come up, have been allocated Rs 600 crore through the Aurangabad Industrial Township Limited. This is mainly to support the infrastructure development work under way in Shendra over 839 hectares. Separately, Rs 1,000 crore has been set aside to provide electricity at a subsidised tariff to industries in Vidarbha and Marathwada, to promote industries in the relatively less-developed regions.

Ashok Pense, a representative of the Thane Belapur Industries Association, said, “It is like a quick fix to a cold, even as the measures for improving overall health are actually more important. It is more important for the government to create an entire culture for industries to prosper, ensure people have the mindset to work 9-5 shifts; even during the agricultural season, ensure raw materials or finished products are close by to reduce cost of transportation, besides other factors like land and electricity.”

He added that giving an electricity tariff subsidy in Vidarbha and Marathwada would only help in pushing about four or five power-intensive industries, such as metal processing, plastics processing, and certain chemicals, where power consumes 35-45 per cent of production cost. “Other industries such as software where electricity is under 2 per cent of production cost will not bother. Also, the lack of a culture to support industries in those districts may still be a problem,” said Pense, adding that the MIHAN project at Nagpur remained stalled for similar reasons.

The Devendra Fadnavis government has been aggressively marketing the state as an investment destination, having cut down approvals required for industries, introducing a single-window clearance system and more. The government has also introduced sector-specific incentives such as for electronics, fabrication, information technology, retail and so on. In doing so, the government has often battled criticism from the Opposition, which alleges that it is favouring large industrialists and ignoring farmers.

As per the Economic Survey Report released on Thursday, the government approved 279 industrial projects with an investment of Rs 45,010 crore in 2014-15, and 218 projects with an investment of Rs 18,759 crore in 2015-16 (until October). Of these, only 16 projects have gone into commissioning and less than 2 per cent of the proposed investment has materialised until now. During the Make in India Week in Mumbai last month, the government signed another 2,594 agreements for investments worth nearly Rs 8 lakh crore.

Ashish Garde, president, Chamber of Marathwada Industries & Agriculture, said, “There should have definitely been more provision for industries. But I think the government must have allocated a lower amount for the various concessions to industries taking into consideration the lead time that any investment takes to materialise and enter production. A substantial amount of ground work needs to be done.”
Otherwise, Garde added, the state government was trying to meet the requirements on industries, and making only those commitments that it could meet — “a good sign”.

As per figures in the state budget, 8,497 industries are producing in Maharashtra as of January this year, with an investment of Rs 2.62 lakh crore and creating an employment of 11.23 lakh.

To promote small and medium enterprises from the grassroots sector, the state government has also proposed to set up district-level committees to increase awareness about the government’s MUDRA Bank, which will disburse funds to entrepreneurs. Besides, the government has also proposed to set up a Maharashtra Entrepreneurship Council in the state.

To boost the logistics business, the Maharashtra government has proposed to set up a logistics business in the Nagpur region and provide tax incentives. The government has proposed exempting the resale of goods brought from outside the state and packed or re-packed inside this hub from the Central Sales Tax. A notification to this effect under the Central Tax Act would be issued soon, said the finance minister.

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