Since independence, and especially after 1960, Maharashtra has been on the forefront in Industrial growth and manufacturing. Maharashtra has been a major contributor in countries G.D.P., revenue & in both direct and indirect tax collection. However consequent to repeated draught conditions for longer period, constant change in the technology, textile workers strike in Mumbai and thereafter the closure of many textile mills created a pressure on industrial growth.

Maharashtra is a strategically located state on the country’s vast coast line and has a wide road and rail network connecting it to all major cities in India. Maharashtra has a highly functional sea port and has the potential for developing more sea ports. The state has adequate availability of airports for speedy transport spread all over in the state. Demographically as well, Maharashtra accounts for about 12% of the total population of India.

The state of Maharashtra has tremendous potential for further industrial growth. But due to certain constraints, the industry faces certain impediments, which can certainly be removed by focused efforts.

Present position of industrial growth in Maharashtra:

The state Government policies for industries, trade and commerce have always been congenial and so far, have been successful in attracting, retaining and flourishing national and international conglomerates. Be it setting up of new factory units or expansion of existing ones, Maharashtra has always been the first choice.

Maharashtra contributed US$69.7 Billion worth exports in 2017-18, which accounts for 23% of total exports from India. Still, in the coming years, Maharashtra certainly has a large scope for improving its performance in the industrial sector.

The state is a pioneer in small scale industries and currently has the largest number of special export promotion zones in the country. Maharashtra has abundant availability of skilled labor, making it an ideal destination for knowledge-based services and for the manufacturing sectors.

GSDP of the state grew at a CAGR of around 11.77% from 2011-12 to 2017-18 whereas the Net State Domestic Product (NSDP) grew at a CAGR of around 11.75% from 2011-12 to 2017-18. Maharashtra is one of the largest producers of sugarcane and cotton in the country.  It has a strong manufacturing base of automobile, engineering, pharmaceutical, chemical and other important industries. Initiatives have been taken to promote alcohol and ethanol production as it is a direct by product of the sugar industry.

According to the DIPP, cumulative FDI inflows in the state of Maharashtra during April 2000 to December 2018 stood at US$ 123.73 billion. Total exports from the state stood at US$ 69.73 billion during 2017-18. During 2018-19 (up to Feb 19), exports stood at US$ 65.94 billion. The Computer software & I.T. Sector has a major share of exports from Maharashtra.

The Government of Maharashtra has several policies in place to set up the right kind of climate for motivating investors. The following are some of the major initiatives taken by the government to promote Maharashtra as an investment destination:

 The Government of Maharashtra is promoting the development of several Special Economic Zones (SEZs) across Maharashtra for sectors such as IT/ITES, pharmaceuticals, biotechnology, textile, automotive & auto components, gems & jewellary and food processing. As of January 22, 2019, the state had 29 operational SEZs, of which the majority share is contributed by IT/ITES, engineering and electronics segment.
 The Government of Maharashtra provides single-window clearance to all units to reduce the average time required for establishment of such units and issue various clearances required for setting up of industries at a single point.
 The Government is focusing on providing IT-related infrastructure, fiscal incentives to IT units and an institutional framework for the IT sector.
 Textile parks, aimed to provide world-class infrastructure for the textile sector and enhance productive capacity, are being set up in Maharashtra to maintain its leadership position in textile exports and production.

Furthermore, Government of Maharashtra has set up a “Maharashtra Industry Trade & Investment Facilitation Cell” to assist, support and encourage the upcoming industries. Maharashtra is destined to play a major role in achieving the national goal of a 5 Trillion USD economy. 

Measures & Steps Required to Intensify the Industrial Growth

Even though Maharashtra is at the forefront on several industrial parameters, there are many factors which need more attention from the Government authorities to further simplify and augment the system. I have enlisted a few such suggestions and improvements that are needed to maintain the momentum of growth in Maharashtra:

  1. Simplify the rules of M.I.D.C. for occupancy, building construction, transfer of industrial of plots, including the rationalization of transfer fees.
  2. Set up a common approval system with standardized norms for industries located in urban areas. Currently, they need to get the same permissions from different agencies.
  3. The infrastructure (like water, electricity, transport etc.) in M.I.D.C. areas need to be drastically improved.
  4. The conditions and norms of State Government I.T. Policy and its implementation, needs to
    be simplified. There is duplication in few procedures. For example, if an I.T. / Software unit is registered with Software Technology Parks of India (Government of India body), it is again required to obtain a separate registration from Industries Department under I.T. Policy.
  5. Even though the Government machinery is now adapting and modifying the out dated labor and other industry related laws, to address the various developmental issues and the problems faced by the industries, it would be advisable to hold regular district wise quarterly meetings. These meetings could involve the heads of various departments and agencies like Industries Dept., M.I.D.C., State Pollution Control Board, M.S.E.B., Directorate of Industrial Safety & Health, Labor Department etc.  as a common platform for industries to raise their concerns and seek speedy solutions.

    Maharashtra has a huge potential in generating more employment, boosting the G.D.P. and increase its contribution to the exchequer. Considering the existing positive factors, mere simplification of Government rules and procedures can help Maharashtra maintain its leading position in the country.

Ajit Phadke

Ajit Phadke, B.Com.(Hons), M.B.A., LL.B, has been operating as a freelance industrial consultant for 35 years and specialises in 100% EOU / Export / Import, Foreign Exchange Rules and Industrial Regulations.

The views and opinions expressed in the article are those of the authors and do not necessarily reflect the official policy or position of The Tilak Chronicle and TTC Media Pvt Ltd.


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