‘Need transport subsidy to attract large industries in Vid’
   Date :29-Apr-2021

Need transport subsidy _1
 
 
Business Bureau :
 
INDUSTRIALISATION forms an integral part of economic development, but, unfortunately, Vidarbha hasn’t attracted large investments consistently. Even incentives which were granted by the State Government have not produced the desired results. Maharashtra announced the Package Scheme of Incentives in September, 2019 granting additional incentives to Vidarbha, Marathwada, Ratnagiri, Sindhudurg and Dhule the outcomes of which are yet to be seen. Western Maharashtra, historically, has attracted industrial investment due to its proximity to the port. Such industrial investment and the virtue of location advantage leads to concentration of activities. Industrial activity leads to creation of employment opportunities and consequentially greater consumption levels and higher demand for goods. This phenomenon has led to concentration of industrial activity in Mumbai/Pune.
 
The benefits accrue to the surrounding towns as well. World over, coastal regions have attracted maximum investments, India being no exception. Therefore, cities like Chennai and Mumbai have led port based industrial development with NCR also tagging along. Clusters of sectors like auto, pharmaceuticals, steel, textiles and many more are located in these regions. The Government’s focus on port led industrial development led to development of industrial corridors like Delhi-Mumbai (DMIC) funded by the Japanese Government, similarly Mumbai-Bengaluru, Chennai-Vizag and Amritsar-Kolkata. This planned development of the above corridors, has left a yawning gap in Central India, with Vidarbha being totally left out, again contributing to the lack of interest shown by industrialists. The Government’s focus on above industrial corridors works out well for port-based places like Chennai, Mumbai, and Gujarat, having ports, or being close to the ports, with lower export and import costs, and achieves a better balance for industry, once again making a bedeviled Vidarbha’s land-locked centrality a disadvantage.
 
It is away from high consumption centres like Bangalore, Chennai, Delhi, NCR, Pune, Mumbai, and Gujarat. It stands to reason that with the markets being in these distant places industry is unlikely to come here, considering the high logistics costs. Industrial facilities generally are concentrated either near their consumers or raw material sources. Vidarbha is mineral-rich, but these, as well as other industries, are beleaguered by the great forest wealth of Vidarbha, for the necessary conservation of which, environmental clearances do not come by easily, thereby restricting development. Suggestions on how to make Vidarbha an attractive destination for manufacturers: 1) The State of Uttar Pradesh has recognised the disadvantage of being a land locked state and the fact that industries have to pay extremely high inland haulage charges to transport export cargo to the port.
 
It has therefore announced a transport subsidy for industries to offset the high logistics costs and make them competitive globally. We hope that Maharashtra recognises this problem of being away not only from ports but from consumption centres and considers transport subsidy on similar lines to make Vidarbha an attractive destination for manufacturers. It is only then that large corporates will find this region attractive for investments. 2) We have also seen that heavyweight powerful political leaders are able to push for large industrial projects to their cities or region which then drive the development of an ecosystem in that segment. Some of the regions have witnessed this kind of growth and are now prominent industrial cities. 3) Vidarbha, albeit with some locational disadvantage, is a location with a salubrious climate, virtually free from natural calamities. It marks its spot to be developed as prominent and secure location for the service industry. “It is imperative that the Central and State Govt focus on Vidarbha to kick-start the development of Central India which is otherwise completely left out,” said Shivkumar Rao, President of Vidarbha Economic Development (VED) Council.