FRIDAY, APRIL 26, 2024
The Government of Goa has announced a new industrial policy. When compared to the previous policies on first reading it appears to be comprehensive and addresses all the main points of industry, especially for those who wish to start enterprise in Goa.
It could be the first time Human Capital, Reliable Power, Water, Internet and Waste management are highlighted and part of one policy document in an integrated manner.
The way to hell they say is paved with good intentions, so we will have to wait for the final policy directions. This policy has many interconnections with other departments. For eg: land use comes under the regional plan and that is the domain of the TCP department. In the past, decisions by the Industrial Promotion Board (IPB) which will now become a very important part of implementation of the single window system (SWS) were not accepted by power department. Therefore when the details are out, these links will have to be closed by notifications making the decisions binding on other departments.
One aspect that stands out is the fact that the Government has realised that it is the front line that needs to be trained to change their attitude to business and businessmen. While the Centre and State have been pushing reforms and wanting the environment to be investor friendly. It finally comes down to the dealing hand who handles the applications and who does not bother and thinks nothing of asking the investor to come tomorrow. We all know that tomorrow never comes but the front end employee loses nothing and gets his salary anyway at the end of the month. Training will help the employee understand the importance of revenue and job generation through investment and more importantly he will drive the Governments vision expressed very well in this document.
The vision is to build trust and collaboration, infuse transparency and predictability to achieve the all important goal of prosperity and ‘sabka vikas’. These are very encouraging words and signals a shift in thinking at the policy level. This vision statement itself marks a departure from the normal, and now looks at every investor as a partner with Government. “Sabka Vikas”, can only be achieved by revenue generation, and business is the main revenue generator, This revenue can power all the social empowerment schemes like free water or electricity.
The policy also makes Goa Industrial Development Corporation (GIDC) the sole authority for handling allocation of land. This is as it should be, when IPB was also allotting 40% of available land there was a tussle between the organisations. On one occasion a piece of land was reduced from 3000 sqm to 2999 sqm after the first advertisement was released by GIDC because they realised 3000 sqm comes under the purview of IPB to allot.
Allotting a plot, only after advertising is a good way to increase transparency. Manufacturing or MSME is not a focus area, proposals related to them have been floated; one, revival of sick and closed units. The situation is complex, many of the closed units have dues with ESIC/PF/PWD and Electricity Dept. Often deals to transfer fall through because the “No Dues” certificate takes time or is disputed. The plot then continues to be unused, a big loss to the exchequer. Hence finding a solution to the departments’ dues is imperative and must be time bound.
The Government has promised to incentivise an “Anchor” unit to invest once policy is finalised. Industry organisations can leverage their connections, GSIA organised a meeting with the TATA group and CII also has such connections. Once an Anchor unit is identified, smaller plots must be made around it to facilitate ancillary MSME units.
On the lines of Micro Industrial Units, can GIDC be tasked with using a plot to create “plug and play” spaces (Galas in popular parlance), small spaces like you have in many parts of Mumbai, where entrepreneurs immediately, start operations without having to get a plot, build, etc. Welding, machine shop, electrical repairs, etc, are some examples of what can be started locally and in a small area.
Revival of self governance of industrial estates is a welcome step. GIDC rules mandate a satisfaction certificate from the Estate Association which is bypassed at present. If implemented well it can ensure proper use of funds and quality control. Stakeholders cannot complain, having approved the work.
While subsidies have been out of style for a while, close on the heels of the central Production Linked Incentive (PLI) Scheme, Goa is now launching its own. This is linked to increasing capital cost or adding employees, both difficult to ascertain and not necessarily contributing to increased revenue. It would be simpler to give an incentive based on increased GST contribution, year on year. If your GST contribution increases above say a base threshold of 15% annually, the business would be entitled to a 2-5% of all incremental contributions. Very easy to track and will be fair and transparent too.
The last but not the least is Ease of Doing Business. The policy promises to make “Single Window System” concept a reality. The thrust will be more online applications, a common form which will be used by all departments, rather than one form for each. The best is enforcement of time lines, will it be deeming clauses? We have to wait and watch. There is work to be done.
Well begun is half done. The Government has indicated the direction and the intent, we do hope they will be able to cross the hurdles and covert the draft into a workable policy that will ensure sabka vikas.
(The author prefers
to write rather than
chat in a balcao.)
