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Rediff.com  » Business » God's own country or industrial doghouse?

God's own country or industrial doghouse?

October 21, 2003 09:14 IST

Consider this paradox. The Kerala government is trying hard to lure businessmen into investing in new industrial undertakings in the state.

But the state's two biggest industrial belts -- the Aluva-Kalamassery-Udyogmandal industrial belt in Kochi and the Kanjikode industrial development area in Palakkad -- are in dire straits. The state government seems to have done little to tackle their problems.

If the trade unions are to be believed, 186 of the 498 industrial units in the Kanjikode IDA have closed during the last 10 years, rendering 11,000 people jobless. Similarly, 27 units have so far downed shutters in the Kochi industrial belt.

Centre of Indian Trade Union Kochi district joint secretary K N Gopinath argues that units that are still running are in trouble. The government-owned Fertilizers and Chemicals Travancore Ltd, which used to have more than 7,000 employees on its rolls two years ago, is sinking and many of its divisions have already been closed. Moreover, Apollo Tyres has shelved its plans to expand and modernise Premier Tyres Ltd at Kalamassery, he adds.

Save Kanjikode Industrial Forum convenor S B Raju blames the state government's indifference for the plight of Kerala's two oldest industrial belts. He says that most units closed not because of labour problems but because of the lack of appropriate infrastructure, state government apathy, hurdles created by the bureaucracy and the mismanagement of some units by promoters.

Adds a Bharatiya Mazdoor Sangh spokesperson: "Though time and again we have made several representations to the state government asking it to intervene and take steps to either avert these closures or to reopen closed units, it has preferred to remain a mute spectator. We have even organised hartals, bandhs, demonstrations, road blockades but the government has remained indifferent.

"But others demur. Palakkad District Industries Centre general manager I K Ayappan says: "Only six large and medium sized units have closed. The others are all very small units. Moreover, the number of people rendered jobless was hardly 800, not 11,000 as is being stated by the Save Kanjikode Industrial Forum."

The unions also fail to mention that many new small industrial units have come up in the industrial belt during the last 10 years and created around 3,000 new job opportunities, Ayappan adds. State government functionaries also point out that the government-promoted Kerala Industrial Infrastructure Development Corporation (Kinfra) set up 15 new industrial parks across the state during the last 10 years.

Says one official: "If some units have closed during the last few years, many new ones have come up in the 15 new industrial parks set up by Kinfra. So the number of new units opened and the employment opportunities provided by them are many times more than the units closed and jobs lost in the Kanjikode and Kochi industrial belts," he says.

On units closing down in the Aluva-Kalamassery-Udyogmandal industrial belt, a state industries department official, who does not want to be named, says: "Most companies that have closed down or are on the verge of closure are in this position because they are not able to withstand competition. As the quality of their products is not on a par with international products, they are posting losses and have landed in a crisis. So the state government is not in a position to do anything to solve their problems."

Even so, listen to what businessmen say. They blame the bureaucracy more than labour for the closure of so many units in both industrial zones. Instead of welcoming and encouraging industrial units, government bodies such as the Pollution Control Board, the Kerala State Electricity Board, the Kerala Financial Corporation and the Kerala Water Authority try to scuttle projects, they claim.

Boban Kallannur, chairman of the Foster group of companies, declares that every government department in Kerala is out to fleece businessmen. "The entrepreneur will first face problems at the office of the District Industries Center." He says that the DIC first refused to register his company "because registration forms were in short supply". Then he had to face innumerable problems from the Kerala State Electricity Board.

First he found it difficult to get power supply sanctioned. Once it was sanctioned, KSEB would not release the right amount of power because Kallannur wouldn't grease their palms. Thirdly, the KSEB charged him for power his company had not consumed. And the KSEB engineers also disconnected power supply to his factory after giving a 24-hour notice.

To protest against all this, Kollannur and his employees even sat on a hunger strike at the gate of the KSEB office. Sabu Jacob, managing director of Kitex Garments, which has a large garment export unit at Kochi, too blames government departments. "Many companies in Kerala have closed because of this attitude of the state government," he says.

Asked how the crisis can be resolved, Kanjikode-based Patspin India Ltd's assistant personal manager M Rathish says the state government should appoint a committee to identify the problems faced by individual units and take steps to nurse them back to health.

That's exactly what the government did. Late last week, it decided to set up a committee of government officials, company management representatives and trade union leaders to monitor the problems of units at the Kanjikode IDA.

But in at least one case, the government is shutting the stable after the horse has bolted. Jacob says his Kitex group has had enough. "We have now decided not to invest any more in Kerala. We are setting up our next project, the investment in which will be Rs 100 crore (Rs 1 billion), in Coimbatore, not in Kochi."
Suresh Menon in Thrissur