FOKIA highlights key parameters for economic revival,
liquidity boost in the Kutch Model as a working example to tide over COVID crisis
Ahmedabad,
June22nd,2020: Prime Minister Narendra Modi’s special mention of Kutch’s
incredible resurrection post-2001 killer earthquake, during his address to the
nation in May, was not only aimed at infusing the much-needed optimism amid
coronavirus-induced gloom, but also an emphatic statement that India has the
potential to seize an opportunity from adversity, however catastrophic it may
be.
With an
unprecedented industrial development in the last two decades – total investment
in Kutch is nearly Rs 1.5 lakh crore and counting - the region has proved wrong
the naysayers, who had given all prospects of revival a burial.
Federation of
Kutch Industries Association (FOKIA), an umbrella organization of all
industries of Kutch, has played a key role in ensuring a conducive atmosphere
for industries to flourish by regularly representing the wants of business
fraternity and raising pertinent sectoral issues with the state and central
governments, along with contributing solutions and inputs in drafting key
policies.
In 2001, FOKIA took the lead in urging then PM Atal Bihari
Vajpayee for fiscal incentives to rebuild Kutch after the quake. Mr Vajpayee
and the state government promptly agreed by announcing five-year tax holiday.
This not only proved to be a game change but also a face changer for Kutch that
ultimately rose from the rubble as industries started flocking to the district.
At a time when
businesses are crawling to restore normalcy during pandemic times, FOKIA
members continuously brain-stormed to come out with a slew of suggestions which
could hasten the revival of economy and supplement PM Narendra Modi’s
‘Atmanirbhar Bharat’ campaign.
FOKIA listed out
incentives required for companies who could manufacture masks, personal
protection equipment (PPE) kits and other medical paraphernalia, by adhering to
all Covid1-9 protocols in their units, to battle Covid-19. In May, the union
government announced an incentive policy for medical equipment with a
production-linked incentive of 5% on the incremental annual sale of devices made
In India.
FOKIA also came
out with suggestions to resolve the crisis arising out of the massive exodus of
migrant workers, who are the mainstay of industries across the sectors. As many as 50,000 migrants left for their
natives from Kutch, which could have a potential impact on the two biggest
ports – Deendayal Port Trust (DPT, formerly Kandla) and Mundra, which have
emerged the gateways to northern hinterland.
Importantly,
several sector-specific reforms suggested by FOKIA to the six-member economic revival
committee formed the state government, have also been positively incorporated
by the panel that is headed by former finance secretary Mr Hasmukh Adhia.
A key reform
suggested by FOKIA was that regarding land use. FOKIA’S suggestions were:
·
The fundamental law of converting
agriculture land in to non-agriculture use
for industries
should be scrapped with the entire land bank of the state bifurcated in to
three categories: cultivable agriculture land, non-cultivable agriculture
land& barren land.
·
Industries should be given
permission to start units on non-cultivable and barren land immediately
on the receipt of intimation
·
The permission on cultivable
agriculture land for an industrial use should be
done under the
deemed NA provisions, which exists since 1996 but are not effective due to
red-tapism.
·
Permanent NA status should be
granted in a time-bound manner at the doorstep of the entrepreneur
·
Create huge Special Investment
Region (SIR) in the state with plug-and-play readiness to spare investors the
hassles of getting land. This will enable influx of investment
·
Agro processing units should be
spared the tedious land use conversion processes
According to Mr.
Nimish Phadke, managing director, FOKIA, said, “The lessons learnt from the
devastating 2001 earthquake have come handy for us in this pandemic times. We are optimistic that the model of economic
rehabilitation that was executed after the earthquake can now be replicated to
tide over the present crisis arising out of the pandemic. We have given a
detailed draft of suggestions panning all sectors to rejuvenating the economy
and many have been accepted by the state and Centre.”
Mr Phadke said
the Adhia Committee has recommended doing away with restrictions on sale or
leasing of agriculture land for corporates and cooperative farming. “This was
suggested by FOKIA to Honourable PM and Niti Aayog three years ago. This will
open up new business avenues for agro industries and help optimal use of land,”
added Mr Phadke.
Adani Group
chairman Mr Gautam Adani, says, “Kutch has been our karmabhoomi where
entrepreneurship thrives. The history of the Adani Group is inextricably linked
to Kutch as our journey towards nation building started here with Mundra Port
and the Mundra Power Plant. I see the blessed region of Kutch continuing to
play an increasingly important national role in the days to come.”
Other suggestions to boost liquidity for
industries:
·
Exemption from electricity duty for two years
effective April 1, 2020.
·
Defer compliance of renewable power obligation
and discoms for two years to bring down the electricity costs
·
All power utilities should be directed to
accept bank guarantee as security and huge amounts paid already should be
refunded. This will enhance liquidity during this crisis
·
Reimburse wages and salaries paid to regular
and contractual workers during lockdown period.
NUMBERS SPEAK FOR THEMSELVES
Investment before 2001 earthquake: Rs 2,000 crore
Investment post-earthquake: Rs 1.5 lakh crore
MSMEs before quake: 200
MSMEs post-quake: 3,500
Direct & indirect employment before quake:
25,000
Direct & indirect employment after quake: 4
lakhs
Contribution
to government exchequer (FY: 2019-20)
Central GST revenue: INR 1,708 crore
State GST revenue: INR 2,373 crore
Rail freight revenue: Rs 4,417 crore
Customs duty revenue: Rs 29,000 crore
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