Reimagining Kerala’s Industrial Landscape

One year on, LDF government has taken Kerala back onto the road of growth and development. A reimagined vision to achieve accelerated growth is underway and a change in the way business is conducted is conspicuous. With the government’s initiatives to revitalise core sectors of the economy already showing progress, the State is on the verge of an industrial boom period.

Kerala’s model for growth is not built upon a race to the bottom on pay, working condition and environmental consideration. Instead it involves an approach to development that focuses on innovation, inclusiveness and ‘greenness’. Quality education and healthcare available for all its inhabitants makes Kerala an unbeatable leader in human development in the country. Additionally, the State has constantly strived to foster talent among its workforce and the professionals from the State are globally valued. All this makes the Kerala an ideal place for industries to thrive.

Globalisation adversely impacted the industries in the State causing shutdowns and job loss. The State needs to transform its industrial sector to unleash its true potential. The guiding principles for this industrial transformation of the State were laid out in the LDF manifesto; revival of public sector, protection of traditional industries, creation of value added industries, development of electronic hardware industry, promoting entrepreneurship, encouraging startups and improving industrial infrastructure in the State formed the core of LDF policy.

Reviving Public Sector

The Public sector plays an important role in the State and the ebbs and flows of the sector has reflected on the State’s fortune. It has contributed immensely to the industrial growth in the State and also provides steady employment for a sizeable workforce. Reviving this sector is instrumental to the State’s industrial development. LDF government in its first year has performed outstandingly in the role of a reviver of public sector. The budget of 2017 allocated Rs. 2.8 billion for working capital and plan funds. In one year of time, it has successfully turned around many loss making enterprises to the path of profit. Under the watch of this Government Travancore Titanium Products Ltd, Travancore Cochin Chemicals Ltd, Transformers And Electricals Kerala Limited, Traco cables, Steel & Industrial Forgings Limited and The Kerala Minerals & Metals Ltd. became profitable. These enterprises worked their way into profit by increasing production, good governance, expansion and diversification. The net loss made by the public sector industries in the State in 2015–16 was Rs. 1.32 billion. In one year’s time, LDF government successfully brought down the net loss by half to Rs. 0.71 billion. The net profit of the Kerala Minerals & Metals Ltd. in Chavara crossed by Rs. 400 million. The Travancore Cochin Chemicals Ltd. peaked its production to a two decade high of 61000 metric tonnes. Both the units of Traco cables increased their production and in turn became profitable. The process has started to acquire 5000 acres of land for the proposed industrial corridor. The Cement and Allied Materials Handling Project near Cochin Port Trust is in development. Works are in progress for mining rare-earths from our shores and producing value added products like Uranium in environment friendly ways. Government intends to keep the mining works in public sector and has assigned the Centre for Management Development (CMD) to conduct a study and submit a report on this.

Protecting Traditional Sectors

Traditional sector employs some of our most skillful workers, but their old ways of production proved difficult to adapt to modern conditions. Modernising this sector will help the workers in this sector to remain relevant and earn a livelihood. Government’s effort in this direction helped to bring back into business some of the mills which were in crisis earlier. 2017 Kerala budget allocated Rs. 750 million for the revival of textile mills in the State, and the capacity of these mills was increased from 11.6% to 30.0%. A sum of Rs. 355.6 million was granted to the cooperative mills under TEXFED (The Kerala State Cooperative Textile Federation Limited). Another Rs. 243 million was given to the four mills under Kerala State Textile Corporation. Rs. 150 million was also provided for acquiring raw materials for these mills.

Government is also promoting the use of handloom among public through various channels. From this year the free uniforms provided to schoolchildren will be made of handloom. A monthly pension scheme for artisans and sculptors in traditional sectors is being implemented. An e-portal designed to find customers for their products is also in the works. Wages were revised for Khadi workers, with benefits of Rs. 130 million was provided to 12003 workers in this industry. Industry & Commerce Kerala is fast emerging as a hub for entrepreneurs. Determined to foster economic growth and entrepreneurship, Government has initiated a series of changes to improve the business environment in the State. It is improving the ease of doing business by leveraging IT to make laws simpler and the process of starting a business more transparent. The main web interface of the ministry (http://industry.kerala.gov.in/) providing information about the various aspects related to owning business was revamped. Vyavasaya Jalakam, a geo-portal for gathering data about MSME (Micro, Small & Medium Enterprises) ventures in the state and for generating a GPS-enabled industrial map of the State was brought in place. A sum of Rs. 470 million was given as entrepreneur support scheme for startup support, investment Support and technology support. An e-Office was implemented for entrepreneurs to conduct office procedures electronically and paperless. 13052 micro and medium ventures started operations in the State. A single window clearance system was implemented for entrepreneurs to procure necessary clearances and licences. A land management system to provide information about the land available under the ministry was implemented.

Promoting entrepreneurship & startups

Kerala Startup Mission and the United Nations’ Office of Information and Communications Technology (OICT) entered into a partnership to set up country’s first UN Innovation Lab in the State. This is a great recognition for the Startup ecosystem in the state, Along with the OICT, the Kerala Startup Mission will spearhead the centre will work on global challenges focusing on innovations for UN’s Sustainable Development Goals. The Kerala innovation centre will focus innovations in Water, Sanitation, Mobility& Agriculture technologies.

Kerala Startup Mission signed an MoU for a startup incubator in Kochi, focussing on energy and energy related areas, with Bharat Petroleum Corporation Limited. Government has established 257 entrepreneurship development clubs (ED Clubs) in schools and colleges of the State to inculcate Entrepreneurial Culture amongst youth and equip them with the skills, techniques and confidence.

Way Forward
KIIFB, Kerala Infrastructure Investment Fund Board, the Special Purpose Vehicle (SPV) for mobilising and channelling the funds is paving way for a major infrastructure overhaul in the State. KIIFB is powering many initiatives in the industrial sector. Building of an Rs. 18.66 billion project petrochemical complex in the 600 acres of land taken on lease from FACT is underway. An incubation centre of size 350,000 sq. ft. in the Life Science park in Thiruvananthapuram, and a techno-industrial park of size of 110,000 sq. ft. in Malappuram is being planned. An international hub scheme for helping industrial initiatives. Efforts are in progress to transform KELTRON into a major electronic hardware centre, the Rs. 1 billion project will become completely operational in two years.