In today's rapidly changing business scenario, there is intense competition between States/ Union Territories (UTs) for attracting investments into their respective economies. Investors generally choose the State/UT that offers best combination of industrial and social infrastructure; technology savvy work force; and presence of business-friendly environment. Accordingly, several policy initiatives and measures are being undertaken by the Governments of various States/ UTs.Over the past few years, more and more Indian States/ UTs are roping in their own NRIs and other Overseas Indians. They are taking continuous steps to encourage NRIs to unleash the existing potentialities of thrust areas in the respective economies as well as to make greater investments accordingly. Overseas Indians are being considered as an important source of foreign direct investment (FDI) into the States/ UTs. The prominent sectors holding huge investment opportunities include: agro-based industries, drugs and pharmaceuticals, IT and ITES, leather products, chemicals, automobiles, electricals, infrastructure, etc.
There are Department of Industries and/or Industrial Development Corporation in each State/ UT to provide attractive investment avenues for industrial development. They undertake several activities for promotion of investment by overseas Indians. Within these departments, there are separate NRI cell or related agencies, like, that of Gujarat, Uttar Pradesh, Karnataka, etc. While, some of other States/ UTs have facilitation centres for NRIs such as Odisha, Madhya Pradesh, etc.Besides, within the existing as well as upcoming industrial policies and Acts of the States/UTs, there are special provisions for facilitating and encouraging investments by NRIs and other overseas Indians, along with industrial development in the State/UT.
Policies and Legislations
The Government of almost all States/ Union Territories (UTs) are making all possible efforts for creating ideal conditions for investments in every sector of their respective economies. They are also working in coordination with Central Government to sustain the pace of development in the country. Accordingly, they have been framing a well structured framework of policies for attracting significant investments into the various States/ UTs. Some of such policy initiatives are:-1. Under the Kerala's Industrial policy, the aim of the Government is to achieve high and sustainable economic growth through rapid industrialization and big leap in commercial activities, without affecting ecology and environment. The policy seeks to create large-scale employment opportunities for the people of Kerala and convert Kerala into an investment friendly destination. That is, it aims to convert Kerala into a favoured destination for manufacturing, agro processing, health services, knowledge based industries and services. It seeks to formulate schemes to attract foreign direct investments (FDIs), including Non-Resident Indians (NRIs) and Non-Residents Keralites (NRKs) to channalise their investible surpluses to the State and, thus, enabling them to harness their expertise in the key areas of manufacturing and services. It also includes setting up of exclusive Industrial Parks for NRI investors.
2. The Industrial Policy of Andhra Pradesh has announced to promote Andhra Pradesh as an attractive destination for industrial investments and foreign investments. FDI is considered as an important way of transmitting skills, knowledge and technology to the State and it is an important driver of industrial performance. Thus, investors are given highest priorities in implementing the projects in the State. The policy further seeks to improve infrastructure in the State by facilitating investment in industrial infrastructure in private sector. In line with such objectives, an autonomous body 'AP Invest' is created for needs assessment and road mapping of FDIs as well as to give special care in providing timely clearances and assistance for setting up of industrial units.
3. In the State of Uttar Pradesh (U.P.), the Industrial and Service Sector Investment Policy 2004 has been announced to achieve all round development of the State by accelerating the pace of growth in the fields of industry, trade, commerce and services. This include strategies like: promotion of private partnership in industrial development; balanced development of tiny, small and heavy sector; promotion of exports; promotion of NRI and FDI investments; assurance for security of life and property; recognition of the role of service sector; etc. The policy recognised that there is an immense potential for attracting investment in the State from NRIs. Also, entrepreneurial skills and capabilities of NRIs belong to U.P. have earned worldwide recognition. The policy thus aims to create attractive environment for investments by NRIs in the State; to make the procedure of investment by NRIs simpler by introducing adequate changes in rules and procedures; to conduct a dedicated survey of NRIs to provide them required facilities; as well as to encourage and persuade NRIs belonging to the State to make greater investments in varied fields like land development, infrastructure, mining, service sector; etc. All these efforts aim to give highest priority to the proposals of Overseas Indians.
4. With a view to promoting investment and trade, the Government of Karnataka formulates and implements the policies of the State with respect to industrial development. It is making all efforts to attract foreign direct investment to the State through its progressive policies and strategies. The federal policy guidelines of the Government of India are also applicable to projects set up in the State. The FDI proposals approved for the State are to be monitored at the highest level to facilitate their speedy implementation.
There is the New Industrial policy 2006-2011 of the State which aims to promote sustained and growth oriented industrialization, with employment, for overall socio-economic development of the State. The other objectives of the policy are to:-
promote diversified industrial base with strength in both old economy and new economy fields.
facilitate reduction of regional imbalance in the matter of economic opportunities, employment and growth.
promote sustained industrial growth by facilitating accelerated flow of investments, etc.
5. Earlier Industrial Policy of Madhya Pradesh aimed at accelerating and strengthening industrial development in the State by attracting more capital investment. The objectives of the policy were to:-
place Madhya Pradesh among the ranks of the industrially developed States.
ensure balanced regional development by giving additional facilities in "No Industry" Development Blocks.
accelerate the pace of industrial development in the State through greater utilisation of the State's human and natural resources.
create more direct and indirect employment opportunities.
create special opportunities for the accelerated development of rural industries.
create new opportunities for the development of the small scale sector.
create opportunities to attract new investments in the large and medium sector.
facilitate synergistic linkages between small scale units and large and medium enterprises.
encourage hi-technology based industries.
encourage investment by Non-Resident Indians.
encourage private sector participation in infrastructure development, etc.
While, the new policy called the Industrial Promotion Policy 2004 envisages on creating an industry-friendly administration, maximizing employment opportunities, tackling industrial sickness, as well as bolstering private sector participation. The main thrust of the policy is:-
establishment of a Madhya Pradesh Trade and Investment Facilitation Corporation.
enacting an Industrial Facilitation Act and to change rules of business with a view to make single window system decisive and result oriented.
developing infrastructure for enhancing identified industrial clusters.
reviving closed down/sick industrial units by granting special packages.
6. In the State of Gujarat, there is an Industrial Policy which has been formulated to promote sustainable industrial development in the State. The policy aims to achieve global competitiveness for industries in Gujarat and make it one of the most competitive destination for investment. The objectives of the policy are to:-
create a conducive environment for the investors.
equip new entrepreneurs as well as existing enterprises with the latest information in relevant fields.
develop the best of infrastructure facilities by infusing private sector investment.
empower the industrial estates to undertake developmental responsibilities.
enhance the quality of life in the State.
strengthen the mature manufacturing segments in the State.
promote industries which are labour-intensive in nature so as to create large-scale employment opportunities in the State.
provide assistance to small-scale industries for healthy growth.
strengthen existing industrial clusters and promote new clusters.
assist small and medium industries in getting bank finance.
equip the industries in Gujarat to meet with the challenges of WTO regime.
establish Gujarat as second to none in terms of "quality" and "brand image"; of products, on international platform;etc.
The State realizes the importance of attracting investments from non-resident Indians (NRIs) as well as multinational companies. This would help the State in improving the technological standards in the industry through technology transfer, enhancing exports, introduction of latest manufacturing practices, development of infrastructure and generation of employment opportunities. At the same time, the Government of Gujarat also appreciates the problems and concerns of the NRIs when they invest in the State. For providing them additional comfort, it is also exploring various options that would meet the aspirations of the NRIs and the needs of the State. In order to bridge the gap between the self-actualisation needs of NRIs and the development requirements of the State, it is considering to set up an Non-Resident Investment Trust Bank after obtaining necessary approvals from Government of India and Reserve Bank of India.
7. Industrial Policies of other States incorporating several features for investment in the States:-
Industrial Policy of Odisha
Industrial Policy of Maharashtra
Industrial Policy of Punjab
Industrial Policy of Goa, etc.
Legislative Framework
The Government of various States and UTs are enacting several legislations for promotion of investment opportunities in their industrial set up. The most important law being, the enactment of Industries Facilitation Act in respective States/ UTs which aims to promote industrial development and facilitate new investments by simplifying the regulatory framework and by reducing the procedural requirements. This Act mainly aims to provide for the measures for speedy implementation of industrial projects and to ensure smooth functioning of the existing industries in the State by providing single point clearances to the entrepreneurs. It seeks to create a conducive environment for business in the economy so as to attract investors the world over, including investments by overseas Indians. Some of these Acts are:-
Odisha Industries (Facilitation) Act, 2004
Karnataka Industries (Facilitation) Act, 2002
Punjab Industrial Facilitation Act, 2005, etc.