Cloud over industrial climate in TN during 2018 as protests

The closure of mining major Vedanta group's Sterlite Copper plant following protests over pollution concerns and labour unrest in automobile units cast a shadow on Tamil Nadu's reputation as a favourable investment destination in 2018.

The state also witnessed a shutdown by fireworks industry protesting restrictions on bursting crackers and agitations against proposed ban on single use of plastics and the proposed Rs 10,000 crore Greenfield Chennai-Salem Expressway project.

On the positive side, the city hosted the prestigious Defence Expo while the Centre announced the first of the two proposed Defence Corridors in the country in Tamil Nadu, linking Chennai and Bengaluru.

 

Chief Minister K Palaniswami announced a slew of pro-industry measures, including an agency to attract foreign investment in the micro, small and medium enterprises even as the second edition of Global Investors' Meet (GIM), which missed its date in 2017 following political turbulences that hit the ruling AIADMK, is set to be held next month.

The state government ordered the Tamil Nadu Pollution Control Board (TNPCB) to seal and "permanently" close Sterlite's copper smelting unit in Tuticorin in May this year after violent protests against it led to the killing of 13 people in police firing.

However, allowing an appeal, the National Green Tribunal set aside the closure order, holding that "it was non-sustainable" and "unjustified".

A bench headed by NGT Chairperson A K Goel asked the TNPCB to pass a fresh order of renewal of consent within three weeks, subject to appropriate conditions for protection of environment.

It also asked the Vedanta group to utilise ?100 crore over the next three years for the "welfare of the inhabitants" of Tuticorin.

But, Sterlite's attempts to re-open the unit hit a block with the Madras High Court's Madurai bench ordering a status quo as existed before the NGT's December 15 order that had allowed the companys appeal against the closure order.

Section of workers of Royal Enfield and India Yamaha Motor struck work for more than two months since July over trade union issues, affecting production at the facilities located at nearby Oragadam, known as the Detroit of India for large concentration of automobile units.

The year saw the Centre's ambitious "Defexpo" being held near here from April 11 to 14 with the main theme of showcasing India as a major hub of defence production in the world.

The exhibition held at Thiruvidanthai, about 45 kms from here, saw the participation of over 670 defence firms, including 154 foreign manufacturers, who displayed their weapons and military hardware.

The Centre announced the first Defence corridor linking Chennai and Bengaluru that will pass through Coimbatore and several industrial clusters, giving an impetus to domestic defence production.

The state government geared itself for holding the GIM, whose first edition was inaugurated by then Chief Minister late J Jayalalithaa in September 2015 and attracted investments of about Rs 2.32 lakh crore.

While it was anticipated that the biannual event would be held last year, the government later announced that the two-day meet would be held on January 24 and 25, 2019 and allocated Rs 75 crore towards it.

Jayalalithaa's death in December 2016 and subsequent political turmoil in ruling AIADMK triggered by a revolt by a section of party MLAs loyal to ousted leader T T V Dhinakaran appeared to have cast a shadow on the industrial climate in the state.

In a bid to retain Tamil Nadu's industry-friendly tag, the government organised roadshows across the country and abroad and announced a slew of sops for various sectors, including the MSME.

In a major boost to the government, Korean-auto major Hyundai said in November it would sign a memorandum of understanding during the GIM to take up expansion work at its Sriperumbudur plant with investments of Rs 7,000 crore.

The 277.3 km Salem-Chennai eight-lane expressway project, announced by the chief minister, encountered opposition from a section of farmers whose lands would be acquired. The matter was also taken to the high court, which has reserved its orders on pleas against the major infrastructure project.

The project, proposed under the Centre's 'Bharatmala Pariyojana', would stimulate growth like the Mumbai-Pune and Delhi-AGra expressway projects, Palaniswami said in the state assembly.

The country's fireworks hub in Sivakasi in southern Tamil Nadu, employing lakhs of people, is on an indefinite closure since November protesting the Supreme Court's order restricting bursting of crackers on Diwali day and allowing only green crackers.

Though the apex court declined to impose a blanket ban on firecrackers, much to the relief of the industry, its stress on low emission green crackers has not gone down well with the manufacturers.

General secretary of the firework manufacturers' association K Mariappan while welcoming the court's refusal to ban crackers expressed

"We need to explain to the (Supreme) Court that we cannot produce such firecrackers (green crackers)". We may reduce the chemicals used in them, but that would take time," he told PTI.

The association has also decided to file a review petition.

Sivakasi, where fireworks making is a cottage industry, meets a major portion of the domestic demand for the crackers.

The industry employs eight lakh people in and around Sivakasi and its turnover has fallen from Rs 6,000 crore to Rs 4,000 crore over the years due to various factors, according to the manufacturers.

The state government's proposed ban on single use plastic from January 1, 2019, has expectedly drawn opposition from manufacturers who contend that the move was "discriminatory."

Coinciding with the World Environment Day in June, Palaniswami had announced in the assembly that manufacture, sale, storage and usage of items such as plastic paper, cups, water sachets, straws and carry bags would be banned with effect from January 1, 2019.

However, polythene sachets used for packaging milk, curd, oil and medical equipment would be exempted from the ban.

The Tamil Nadu Plastic Manufacturers' Association alleged that the government order was "discriminatory" in nature as it allows the use of plastics in many government and large scale private sectors, while the same was banned from public and small-scale private sectors.