MP to develop industrial land on real estate model

To create better industrial facilities, MP State Industries Development Corporation (MPSIDC), an arm of the state industries’ department, has planned to develop industrial infrastructure in the newly planned state industrial corridors by replicating real estate model.

Accordingly, the corporation will arrange funds through loans from financial institutions to acquire land. Prime industrial areas like Mandideep, Pithampur and Malanpur have exhausted land for the new investors. “Of late we have signed deals with various big investors but we do not have sufficient industrial infrastructure, we need to create infrastructure in the same way as real estate players. We will seek loans from funding agencies like Hudco,” P K Dash, managing director, MPSIDC told Business Standard.

MPSIDC and Hudco had signed a deal in the recently-held Khajuraho Investors Meet for a loan tie-up of Rs 1,000 crore.

In the last decade the Madhya Pradesh government has hardly put any money in creating industrial infrastructure across the state’s industrial areas. During the 10th Plan (during 2002-2007) the total investment in industrial infrastructure development was Rs 19.48 crore, while the same stood at Rs 23.63 crore during the 11th five year plan (so far) during 2007-2010. “This data reflects our yearly investment in creation of industrial infrastructure is hardly Rs 4 crore to Rs 5 crore,” Dash added.

Industrialists have said this idea may sound good on papers. They say, the government has already escalated land prices, maintenance charges in various industrial areas as a result the cost of production has gone up several times. “If this plan is implemented the land will be available for industries, particularly small scale industries, on commercial rates which would increase cost of operations further thereby making industries unviable or non-competitive. For large scale industries, they may subscribe the idea and land as they develop land at their own cost but small scale industries have already been frustrated and many forced to shut operations in Madhya Pradesh,” Darshan Kataria, secretary of Pithampur Audyogik Sangthan said.

Other industrialists are also not ready to buy this idea but have a solution for the government. “If MPSIDC floats this plan, it will have to make sure that outside products will attract high octroi or entry tax. If it (government) protects the domestic industries, we will be able to do production on small industrial plots,” said an office-bearer of MP Laghu Udyog Sangh.

The state government has planned to develop three industrial corridors on this model; Bhopal-Indore, Bhopal-Bina and Katni-Singrauli. To begin with Bhopal-Indore corridor is on top priority.