BackWhat do industrialists want from the new Tamil Nadu govt?
From better streamlined processes and less govt intervention in private enterprises to skill development and better infrastructure, the wish list is long
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Chennai: As the southern state heads for elections on 16 May, Mint asked some of the corporate houses and industrialists on what they expect from the new government.
From better streamlined processes, quick decisions and less government intervention in private enterprises to skill development, investment in R&D for new technologies, better infrastructure, electricity and quick disbursal of loans, the Tamil Nadu Inc.’s wish list includes attracting more capital flow with brewing competition from other states.
“Tamil Nadu has a unique blend of manufacturing and service sectors (a mix of old economy and new economy sectors), an advantage over other states," said N. Srinivasan, managing director of India Cements.
“What I primarily expect from the new chief minister or government is to build on the inherent strengths of the state and an eco-system to facilitate the growth of manufacturing, export and service sectors," he added.
“I believe most of us from the corporate sector will expect a very healthy and friendly industrial climate which will help the state to grow in its traditional areas of strength," said K. Ramakrishnan, senior managing director, Spark Capital Advisors (India) Pvt. Ltd.
Competition
According to Ramakrishnan, “The corporate houses, entrepreneurs and investors have choices to exercise. They will exercise their choice on where to put their money depending on where it is more competitive and conducive for them to build their businesses and create value for all stakeholders."
Mint had reported in January last year that a host of companies have been opting for SriCity in Andhra Pradesh, driven not only by the latest facilities it offers, logistical ease and government subsidies, but also by a simultaneous slide in conditions in Tamil Nadu, marked by erratic power supply, delays and bureaucratic hurdles.
Ramakrishnan added that we are living in a structure where there is competition between states to attract capital. “There is an effort to attract investments in the neighbouring state. We will be competing with them in one form or the other. So we need to make sure that we are winning that to the extent we can."
Vijay Anand, chief executive officer (CEO) and founder of The Startup Centre in Chennai, agreed, “Telangana is doing quite a bit to attract new businesses, and in the mid and long term, Tamil Nadu needs to come up with policies that will bring not just investments but also new businesses to look at the state as a choice destination."
“We have got 40% of the country’s textile capacity in spinning located in Tamil Nadu. This is slowing down because the Maharashtra and Gujarat policies are more attractive and industry friendly. They are offering power at a low price and if the textile has to be retained here, we will have to ensure there is a level playing field on power and it should be available at a more competitive pricing," said T. Kannan, managing director of Thiagarajar Mills Ltd, Madurai.
Infrastructure
Infrastructure is a prime concern for many. “It would help to have an airport which doesn’t have crashing glass panels all the time. It is a bit embarrassing when we have to explain that to people who fly in for meetings," said Anand.
One glass panel, on average, fell at Chennai airport every month since it was modernised three years back, twice injuring travelling passengers, reported Mint last month.
“I expect them (government) to give equal priority to infrastructure and industrial development and create more income and jobs," said Srinivasan.
Policies
On the industrial policy front, the government is expected to take steps to ensure openness and facilitate time-bound clearances.
Ramakrishnan said that apart from having a policy in place, it is equally important to make sure the state is seen as having it. “The policy needs to be appropriately packaged, and articulated to the relevant audience (industrialists, investors), for perception is as critical as reality," he added.
“Everyone keeps promising that it will get better, but there is still a lot of friction in that front," said Anand.
Power
Power availability not just in the capital city Chennai, but in tier 2 cities is critical. “Coimbatore has taken a rather big step back in its outputs and availability of electricity is a key component of it," said Anand.
Kannan said that when we talk about wind energy and cheaper source of power, wind evacuation continues to be an issue.
“Over the last two months, we have begun to see improvement in evacuation for power generation through wind, primarily due to new substations and evacuation facilities that were developed. We expect this to improve further and hope the sector will continue to witness positive growth in the coming years," said Ramesh Kymal, chairman and managing director, Gamesa Renewable Pvt. Ltd.
Startups, R&D and tax breaks
“With more than 500 engineering colleges, we still don’t produce enough engineers who have the capability to work as engineers," said Anand.
As someone who has been mentoring start-ups, Anand feels that universities and academia needs to be given research and grants to build newer technologies to improve efficiency.
“We should also incentivize private enterprises to invest in R&D and give them tax breaks for the money they invest in R&D, as long as they are willing to release the technology under public domain," he said.
He also suggested that smaller companies should be encouraged to participate in the government’s tender processes.
“A comprehensive policy for start-ups would be a very welcome move. This has been on the cards for quite some time and a policy that helps start-ups find their feet has been long anticipated," said Adhil Shetty, chief executive officer and co-founder, Bankbazaar.com.
“A few tax breaks would be great to keep up the momentum," added Shetty.
Setting up specialized bank branches that have personnel who understand business plans is necessary. “CGTSME (Credit Guarantee Fund Trust for Small and Medium Enterprises) scheme allows for coverage but is barely exercised in most branches," said Anand.
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