State Policy

The Industrial Policy, 2001 aims to accelerate industrial growth by attracting a steady stream of investment in industry, infrastructure and core strength sectors by creating a congenial investment climate in the state. The industrial and services sectors are the two most promising sectors in the state.

The state is laying special emphasis on building world-class infrastructure, generating employment opportunities and tapping into the opportunities that IT/ITES and biotech sectors offer. The state wants to maintain its pre-eminence as a chosen tourist destination in the country. It is also keen to attract investment in traditional industries such as fishing, agro-processing and handlooms & handicrafts. The broad focus areas of the Industrial Policy are outlined below:

• Enhanced and sustained industrial growth rate and generation of employment in industry

• Creation and maintenance of an investment friendly climate and facilitation of measures to maximise global and local investment in industry. e-Governance measures to be adopted to make governance streamlined and transparent

• Maximisation of private investment in infrastructure development, with government investment only in areas/functions where private investment cannot be attracted

• Special development of sunrise sectors including IT, biotechnology, food & agro-processing, infrastructure and services, which have high growth potential

• Maximisation of value addition within the state in indigenous produce and minerals. Intensive growth of Kerala's products and services, particularly those for exports

The state policy has outlined a number of measures to facilitate modernisation and technology upgradation of industries, particularly traditional industries. The policy offers assistance to entrepreneurs and Public Sector Undertakings (PSUs) in obtaining patents and Intellectual Property Rights (IPRs). Measures to revamp the khadi, village & handloom industries and cooperatives have been proposed. The Government is encouraging private investment in its handloom and coir industries to enhance productivity and maintain a competitive edge. The policy also proposes to introduce powerlooms to promote state-of-the-art facilities of international standard.

The Kerala Institute of Entrepreneurship Development (KIED) has been established and the Government has announced exemptions and subsidies for entrepreneurs starting businesses in the state.

Emphasis on agro-processing

Incentives for investors in the state

e-Governance

Single Window Clearance Boards in the state & district levels and industrial areas have been set up to attract investment. There is a proposal to restructure the Directorate of Industries & Commerce to enable it to act as a promotion agency and play the role of a facilitator.

The Government has outlined a marketing campaign to promote the state as an ideal destination for investment. It has set up an Export Promotion Committee for export related infrastructure projects.

Labour policy initiatives are also aimed at promoting ideal employee-employer relationships and curbing undesirable labour practices through legislation and administrative intervention. The Government will attempt to reduce unnecessary proliferation of trade unions in establishments. The State Government plans to put in place a special monitoring system to ensure workplace security and healthy working conditions for women workers. The Government will also streamline procedures to expedite labour disputes.

IT Policy

The state's IT Policy outlines the following strategy to harness the business opportunities offered by Information Technology:

• Creating an appropriate pro-business, pro-enterprise, legal, regulatory and commercial framework to facilitate rapid growth of the IT industry

• Establishing Kerala as a global centre for excellence in human resources through the creation of multi-skilled and technically competent manpower

• Establishing an internationally competitive business infrastructure and environment for the IT industry, at par with the best facilities and practices worldwide

• A number of labour regulations related to working hours for the IT/ITES sectors have been relaxed, making it the first state to permit flexi-time, a three-shift operation and women working in night shifts. The state has also introduced a system of self-certification for these sectors

Biotech Policy

The broad focus areas of the Biotech Policy are as under:

• Act as a catalyst in the development and application of biotech keeping the state's resources in mind

• Promote a sustained build-up of both the knowledge cadre and knowledge base through the strengthening and creation of educational and R&D institutions

• Establish an infrastructure and put in place an administrative, regulatory, legal and financial framework conducive for investment and growth of biotech enterprises, which in turn will promote economic development and human welfare

• The Government has set up the Kerala Biotechnology Commission and the Kerala Biotechnology Board. The latter headed by the Chief Minister, will create a corpus of US$ 20.65 million to build infrastructure such as biotech parks. The board will liaise with national and international agencies and ensure appropriate and timely implementation of the policy

• The Kerala Biotechnology Commission will be responsible for the implementation of the Biotech Policy and related guidelines laid down by the board. The Commission aims at identifying focus areas of investment and prioritising projects for implementation

The biotech parks in the state are principally designed to have the following components:

• Bio-resource centre: A hub to provide infrastructure, equipment, facilities and services to assist the tenants and clients of the park

• Technology incubator: Develop and licence technologies with the help of R&D institutions for tenants and clients

• Training centres: Impart technology skill packages in biotech streams

Kerala Industrial Infrastructure Development Corporation (KINFRA) is the nodal agency for all infrastructure development activities in the state. The state policy proposes to set up a fund to undertake preliminary/feasibility studies for infrastructure and project development related activities under various departments. The Kerala Infrastructure Development Act clearly outlines the modes of involvement for private and public entities in construction of infrastructure.

A Single Window Clearance Board is notified for each Special Economic Zone (SEZ) to provide pre-laid guidelines and time frames for processing approvals. A self-certification regime is to be introduced in each SEZ. Developers of SEZs and other industrial estates are to be exempted from sales tax, purchase tax and entry tax. The SEZ developer, however, has to ensure of uninterrupted power supply at competitive rates.

The State Government has also outlined a renewable energy policy, the focus of which is to develop non-conventional energy sources, provision of single window technical assistance, sourcing of finances and project clearances.

The main aim of the state's Tourism Policy is to maximise its tourism potential and help the state realise its social and economic growth. This policy aims to increase the annual international tourist traffic from 0.1 million to 0.5 million and annual domestic tourist traffic from 1 million to 5 million in the next five years. The policy provides various concessions and incentives to entrepreneurs in tourism-related activities. The salient features of the policy are:

• Concentration on employment and income generation in the sector

• Redefining the role of government as a catalyst and facilitator in infrastructure development 

• Inter-governmental coordination 

• Rationalisation of taxes 

• Growth with sustainability 

• Providing safety to tourists

• Creating awareness among stakeholders in the sector

• Removing prejudices and misconceptions 

• Creating tourist friendly destinations

Content Source: www.ibef.org