Vijay Kelkar panel bats for balanced industrial development in Maharashtra

The committee's recommendations include rebates in tax and interest, along with development of industrial corridors in Marathwada and Vidarbha

A committee, headed by economist Vijay Kelkar, has recommended a two per cent rebate in sales tax and a one per cent reduction in interest rates on capital borrowed from banks to boost manufacturing activity and private investments in the state, especially in the Vidarbha region.

Besides, to promote industries in the backward Marathwada region, the committee -- set up by the previous Congress-Nationalist Congress Party government in 2011 – has called for declaring the Parbhani-Hingoli-Washim region a textile zone. A special policy package should be announced for these districts. The panel had submitted its report in October last year.

The 593-page report, which was tabled by the BJP-Shiv Sena government in the state legislature on Tuesday, observed that the design of the policy should evenly handle local specific needs and supportive infrastructure, as one–cap–fits-all approach would be counterproductive. State Finance Minister Sudhir Mungantiwar informed the state legislature that the report would be discussed during the Budget session and thereafter the government will implement the recommendations.

The committee said the industrialisation has been uneven in the state. While annual industrial growth rate for Vidarbha and Marathwada was 8.5 per cent and 8.1 per cent, respectively, in the rest of Maharashtra it was 10.9 per cent.

''Taking a five-decade perspective, today, one can clearly see the emergence of industries beyond the Mumbai-Thane-Pune belt. Many new industrial centers have emerged steadily, such as – Nashik, Kolhapur, Nagpur, Aurangabad, Ratnagiri. However, barring these few growth centers, the situation has not changed much in terms of either the inter district and inter-regional imbalance,'' the committee said.

Further, of the total number of industrial units set-up in the Maharashtra Industrial Development Corporation area was 33,355 of which 74 per cent are located in the rest of Maharashtra, while the proportions of industrial units set-up in Marathwada and Vidarbha were 13.4 per cent and 12.3 per cent, respectively.

The total investment made in these industrial units was Rs 53,792 corer. Of these total investments, the shares of the three regions, were as follows: rest of Maharashtra (74 per cent) Marathwada (8 per cent) and Vidarbha (17 per cent).

The committee said an MSME Credit Guarantee Corporation should be created to improve access to capital for the sector.