Kerala will be a destination for responsible investment: Minister P Rajeeve

After the decision of Kitex to move its project out of Kerala, the state is being dubbed as “unfriendly to investors.” Kerala’s industries minister P Rajeeve talks about the state’s industrial roadmap while raising doubts on the Ease of Doing Business rankings by the Centre, in an exclusive interview with Shine Jacob. Edited excerpts: 
 
After shifting of the Kitex project, you were batting for responsible investment. What do you mean by that?
 
This is a new trend globally. If you look at the previous financial year, around one fourth of the investment is coming under the responsible or environmental social governance (ESG) category. Through this, we intend to have a responsible investment, following the environmental, labour and other laws of the land. This is what we put forward and if the existing laws are outdated, we are ready to amend them. We cannot say that there should be no inspection at a plant, no environmental clearance is needed or they should not follow any labour laws.

 

Several factory laws in India are outdated. We have constituted a three-member committee, which will look into whether there are any roadblocks or outdated laws in the existing framework for investors. We will change such rules based on the recommendations of this committee.
 
What sectors is the state looking at?
 
Kerala will become a destination for responsible investment. We have identified several key sectors that are suited for Kerala — like information technology, biotechnology, pharmaceuticals, medical devices, consumables, electronics and food processing. If you look globally, there is a sorting happening in developed countries, by omitting environmentally-damaging industries from those countries. In terms of social and human index, Kerala is at par with any developed country.

 
We have a highly-skilled workforce with a higher environmental quotient. Our focus should be on generating jobs. When you pay better wages, the output will be equally good too. We are trying to bring back the Keralites who are working outside. I believe the current trend of remote working will open doors for that. We are working on creating infrastructure that will be helpful to create such a work atmosphere. Talks are on with several IT and biotech companies to set up their main offices in Kerala. We are also lining up plans to utilise the highly-educated women workforce at home, who are not working at the moment.

 
You are still down at 28th position in the Ease of Doing Business rankings. Why is it so?
 
The problem with the Ease of Doing Business ranking is that its evaluation is subjective. We have made more than 90 per cent changes that are needed to meet the criteria. Lakshadweep, which made no changes to their rules, is at 15th spot and we are at 28th. There are six states behind us and one of them is Odisha, which did even two per cent more than what we did. They are behind us. We have some reservations regarding the Ease of Doing Business rankings, which is not transparent. We have no clarity on why we are going down.

 
Do you see Kerala as a fertile ground for start-ups?
 
We were one of the top-three performers in terms of start-up rankings that the Department for Promotion of Industry and Internal Trade (DPIIT) came out with. We will become the number one state for start-ups within a span of six months. We are seeing a major development in the field of start-ups, not just in the IT sector but also in areas like agriculture.
 
Still, availability and price of land will be major concerns for investors. How will you tackle this?
 
For large scale industries that require big land parcels, it may not be that easy in Kerala. Land scarcity is an issue in Kerala. If we have to buy 100 acres, we will have to negotiate with a minimum of 700-800 land owners.

 
On the other hand, in several states, you need to negotiate with very few people for even 2,000 acres of land. Even if land prices are a bit high, the advantage for Kerala is its connectivity — four airports, ports and a strong inland water transport system — which will be advantageous for any industry in the long run. 
 
What are you doing to attract micro, small and medium enterprises (MSMEs) to the state? 
 
In the last 62 months, braving even the Covid situation, we saw over a 100 per cent rise in the number of MSMEs in the state, from around 70,000 to 150,000 units. This was mainly because of the amendments in industrial regulations that we have made. To start an industry up to Rs 10 crore, which is not under the red category, we don't need any licence in Kerala now, but just an acknowledgement. For investments of up to Rs 100 crore — if all the papers are ready — we will provide a licence within a span of seven days.