Key Government Initiatives towards Make in Maharashtra

Part 3

'Make in India- Promoting entrepreneurship & Innovation'

Key Government Initiatives towards Make in Maharashtra

In the last year or so, the state government has taken a slew of initiatives to make the ‘Make in Maharashtra’ campaign successful. The impact of these measures can be seen with the rise in investments in the state. Since November 1, 2014, the state has registered a seven -fold increase in assured industrial investments and employment generation. During this period, the state has received investment assurances of INR 72,325 crore with a promised creation of 75,904 jobs in 42 projects. Typically, it takes two to three years for these assurances to translate into reality, taking into account clearances, construction of units and recruitments.

INTRODUCTION

Key Government Initiatives towards Make in Maharashtra

The surge in investments in the state can largely be attributed to the several initiatives of the state government including time -bound single -window approvals with the total number of permissions reduced to 25 from 76, and taking the entire industrial approval process online by forming a Maha e -Biz platform. Besides, there are incentives like reimbursement of cost of water and energy audit, subsidy on capital equipment for conserving water, exemption in stamp and other duties and special investor after -care cell.

Key Government Initiatives towards Make in Maharashtra

The state government has also introduced labour reforms like relaxing the restriction on night duty for women in factories, increasing overtime limit for employees from 50 hours a quarter to 100 hours, reducing the number of days an employee needs to work to qualify for benefits like paid leave to 90 from 240. Further, small companies (10 to 40 employees) which are exempt from filing returns have been allowed to hire more people.

Key Government Initiatives towards Make in Maharashtra

Other factors which have contributed to win investments in the state include eased regulatory control, easy access to markets, reliable power supply, quality infrastructure in industrial areas, land availability and good connectivity to ports and airports.

Policy reforms to ensure ‘Ease of doing business’

The initiatives taken by the state government under the ‘Make in Maharashtra’ programme have been detailed below – 1. Policy reforms to ensure ‘Ease of doing business’ – Rigid and inconsistent policies impede industrial growth. Simplified /

Transparent procedures/ policies, along with faster decision making enable faster industrial development. Though Maharashtra has always been a preferred destination for investors, it faced some issues in the absence of ease of doing business due to its inconsistent policies, bureaucratic delays and corruption. However, in the last one year, the state government has attracted investment by changing several norms to ensure ease of doing business in the State.

‘Policy reforms to ensure ‘Ease of doing business’

Some of them have been detailed below –a. Reduction in mandatory approvals/ permissions and inspections – i. The State government has simplified the process of setting up business in

the state by reducing the number of regulatory approvals required. The government has reduced the number of permissions required to start a new business to 32 from the previous number of 76. The aim is to bring it down to 25 eventually. More than 10 departments, including labour, industries, revenue, Maharashtra Industrial Development Corporation (MIDC), environment, and energy, are involved in the exercise to reduce permissions and consents

The investor facilitation cell will provide assistance to the foreign investors from the time of their arrival in the country to the time of their departure, with focus on green and advanced manufacturing and helping these companies to become an important part of the global value chain. Key imperatives that have been undertaken to make business process efficient include --

Policy reforms to ensure ‘Ease of doing business’

ii. In a recent move, the state government announced that once a potential unit has the 15 mandatory clearances, the administration will have to clear the project within 7 days. Under the new rule, once the approvals are in place on 15 critical aspects related to land, environmental clearance, clarity of finances, conformity with state labour laws, etc. the projects will not be kept on hold and will be deemed to be approved.

Policy reforms to ensure ‘Ease of doing business’

iii. Maharashtra Industrial Development Corporation (MIDC) has reduced the number of permissions required from the corporation to set up industry within its estates to 5 from 14. Apart from this, the state cabinet recently amended the MIDC Act to ensure that the manufacturing units in the MIDC areas do not require separate permissions from the local civic bodies once they have secured an approval from MIDC. Under the earlier rules, the industries had to seek approvals from Municipal Corporations apart from MIDC, which led to delays and financial outgo. Furthermore, MIDC has simplified procedure for Building plan approval, water supply connection, approval to internal drainage plan, approval to drainage connection plan, provision of fire NOC, CETP membership, power supply NOC etc.

Policy reforms to ensure ‘Ease of doing business’

iv. Time taken for new electricity connection has been reduced from 67 days to 15 days and number of procedures reduced from 7 to 3. The permissions needed from municipal bodies to start industries have been reduced to 11 from 27, and the time taken to secure construction permits has come down to just 50 days from the earlier 162. v. Municipal Corporation of Greater Mumbai (MCGM) has introduced Single Window Clearance for construction permit with Building proposal department as the Nodal Agency. Building Completion and occupancy certificate are issued within 7 days from date of application. Construction permit can be obtained in 60 days and number of procedures reduced to 11

Policy reforms to ensure ‘Ease of doing business’

vi. In order to further ease of doing business in the state, the government abolished the system of periodic inspections of industries by Maharashtra Pollution Control Board (MPCB), that is, the government has removed the powers of random inspection from inspectors of MPCB. In a major relief to the industrial sector, the new rules provide, that only senior officials can make a call on whether an industry needs to be inspected without notice or not.

Policy reforms to ensure ‘Ease of doing business’

b. Labor reforms – i. Self-Certification scheme was introduced to reduce inspections by labor department - In order to promote the ease of doing business, the Maharashtra government announced this scheme, which permits factories and shops to undertake self -certification pertaining to 16 labour laws. This new scheme is expected to benefit nearly 35,000 factories and over 27 lakh shops across the state, since it will drastically cut down on inspections by the labour department. As per this scheme, labour inspections will be conducted only once every five years.

Policy reforms to ensure ‘Ease of doing business’

ii. The state government ha s made significant amendments to labor laws to facilitate ease of doing business in the state. The state has done away with the mandatory clearances required for manufacturing units to make laborers work night shifts. Also, it has allowed women laborers to work night shifts. In addition to this, the Factories Act has been amended to bring 14,300 small units, employing about 1.90 lakh workers, outside the purview of the Factories Act. The legislation has been relaxed and mandatory clearances for units to allow workers to work overtime have been amended. Further, the government is also working on a process to bring licensing and compliances on the online platform

Policy reforms to ensure ‘Ease of doing business’

c. Ease in land acquisition for industrial use – i. The state government has eased the procedure for the conversion of agricultural land to bona -fide industrial use. In this regard, the government has set up facilitation committee that will certify that the land in question is free of encumbrances. The state government has amended the Maharashtra Land Revenue Code 1966 several times since 1994 to simplify the conversion process. The amendments allowed bona fide industries to come up on agricultural land and also on land within the industrial zone of a development plan without seeking prior clearances for zone conversion. The district collector merely had to be informed about the change of land use within 30 days. However, the developer had to provide a "self -assessment" that the land was free of encumbrances.

Policy reforms to ensure ‘Ease of doing business’

This includes certifying that the land would not come under acquisition, road and irrigation projects or even face obstructions from high tension wires of power projects. Based on the self-assessment submitted to the state, he would get a "sanad" or certification from the government, a document which eased the process of raising finances for the project. It was witnessed, that it was very difficult for any developer to have knowledge of such government -related encumbrances on land. In order to address this issue, the Industrial Non -agricultural Use Facilitation committee has been formed which will certify that the land faces no encumbrances

Policy reforms to ensure ‘Ease of doing business’

The committee will be headed by the additional collector and will have members from the departments including urban development, environment, public works and irrigation. Once the committee clears the certification, the project has to be given a ‘sanad’ or certification stating it is free of encumbrances, within 60 days. Prior to this amendment, it would take a long time for the government to grant this crucial clearance. Consequently, the industries used to suffer as Banks were reluctant to sanction loans to them without this document.

Policy reforms to ensure ‘Ease of doing business’

ii. With a focus on creating a manufacturing hub in the state, the state has allowed re -allotment of unused plots by MIDC to worthy entrepreneurs. Recently, the MIDC took possession of 1,700 plots where no industries have come up in the last 2 -5 years despite several extensions. These plots have been re -allotted to the more deserving entrepreneurs in the MIDC’s waiting list. MIDC has also defined a procedure for Land Allotment, with applicant waiting list being published online

iii. The state government promotes partnerships between the domestic firms and the foreign investors in the manufacturing sector. To facilitate this, the state government allocates land to foreign manufacturers who invest in the State in partnership with Indian companies.

Policy reforms to ensure ‘Ease of doing business’

d. Favorable construction norms i. The state government has eased construction norms for industries by allowing horizontal expansion for areas under Maharashtra Industrial Development Corporation (MIDC). As per the new norms, there is a relaxation on the Ground Coverage Ratio (GCR) beyond the existing number of 0.5 for industries. In addition to this, the state government has also enabled industries on MIDC land to get additional Floor Space Index (FSI), which refers to the permissible built -up area on a given plot of land. Apart from this, the government has also decided to increase the Floor Space Index (FSI) from 0.2 to 1 for industries that are outside MIDC (Maharashtra Industrial Development Corporation) areas. Furthermore, the state government has also eased legislations so as to give more room for industries to acquire land in non - Maharashtra Industrial Development Corporation (MIDC) areas

Policy reforms to ensure ‘Ease of doing business’

ii. In addition to relaxed FSI norms for industries, the state has also bestowed more powers to the district collectors to sanction the additional FSI at their level. The district collector has been allowed to sanction an additional FSI from 0.1 to 0.9 so as to expedite the entire process of setting up industries in the state.

Policy reforms to ensure ‘Ease of doing business’

e. Reduction in power tariff i. The government realizes that electricity charges play an important role in the competitiveness of an industry. In a recent move, the state government slashed power tariff for industries by 14%. In absolute terms, the tariff for the industry has been reduced to INR 7.21 per unit from INR 8.41 per unit. This step will make power more affordable and will attract fresh investments to the State.

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