Kerala made history by securing the top position in India for fostering a business-friendly environment, a first for the state. This achievement was announced by Union Minister of Commerce and Industry Piyush Goyal during a conference of state industry ministers.
Published Oct 13, 2024 | 8:11 PM ⚊ Updated Oct 13, 2024 | 8:11 PM
Kerala's Industries and Law Minister P. Rajeev highlighted the remarkable transformation of the state
At the third edition of South First’s annual thought conclave, Dakshin Dialogues-2024, Kerala’s Industries and Law Minister P. Rajeev highlighted the remarkable transformation of the state, which has evolved from being labeled as a hotbed of militant trade unionism to emerging as the top state in India for ease of doing business.
This achievement is even more significant considering Kerala’s unique geographical constraints, such as the Western Ghats and Coastal Regulation Zone (CRZ) limitations, as well as a high forest-to-population ratio.
Rajeev’s insights showcased how Kerala overcame these challenges through policy reforms, innovative governance, and a focus on sustainable development, setting a new benchmark for industrial growth in the state.
Kerala has made history by securing the top position in India for fostering a business-friendly environment, a first for the state. This achievement was announced by Union Minister of Commerce and Industry Piyush Goyal during a conference of state industry ministers held in Delhi in the first week of September. Kerala’s Minister for Industries, P. Rajeev, accepted the award from Goyal.
The rankings were determined based on various reforms and initiatives implemented by states to enhance their business climates. Kerala excelled in nine key sectors, earning over 95 percent of the total marks and topping the ‘Top Performer’ list.
Following Kerala were Andhra Pradesh and Gujarat, which ranked second and third, respectively, with Andhra Pradesh leading in five sectors and Gujarat in three.
Rajeev stated to South First that Kerala’s impressive performance was evaluated across 30 sectors, achieving the highest ranking in nine areas, such as single-window clearance systems, utility permits, revenue certificate efficiency, transportation facilities, employment exchange services, and tax system efficiency.
He emphasised that in the Ease of Doing Business rankings released by the Ministry of Commerce and Industry, Kerala ranked 28th in 2020. The following year, the state made significant progress, climbing 13 spots to secure the 15th position. In the 2022-23 rankings, Kerala achieved an impressive milestone by jumping 14 positions in just one leap, underscoring the state’s ongoing efforts to foster a more business-friendly environment.
A top official from the Kerala Industries and Commerce Department told South First that, the steadfastness of the LDF government has transformed Kerala from a state with minimal presence in India’s industrial landscape to a leader in industrial development.
During this period, Kerala has achieved what was once deemed unattainable. Significant progress includes the approval for the Kochi-Bengaluru industrial corridor and the announcement of a comprehensive logistics policy.
The state has made remarkable advancements in industrial-friendly rankings, with over twenty public sector enterprises now operating profitably. Kerala has taken over public sector companies put up for sale by the central government and has launched new industrial ventures. Notably, for the first time, private industrial parks and campus industrial parks have been initiated, with approvals granted for more than twenty-five private industrial parks.
Moreover, global companies, including IBM, have established a foothold in Kerala, and the Vizhinjam port is poised to become a critical gateway for national development.
The Entrepreneur Year initiative, which aims to kickstart 275,000 projects within two years, has gained national recognition as a best practice, generating investments totalling Rs.16,000 crores and creating 550,000 job opportunities.
Additionally, Kerala has attracted Rs.11,000 crores in investments through the Meet the Investor programme. The Mega Food Park, which expects an investment of Rs.1,000 crores and the creation of 3,000 jobs, has commenced operations. Construction has also begun on a spices park, and a Rs.1,200-crore petrochemical park is set to become a reality.
The Entrepreneur Support Scheme (ESS) plays a crucial role in achieving this goal. ESS operated by the Directorate of Industries and Commerce, provides financial assistance to Micro, Small, and Medium Enterprises (MSMEs) in Kerala’s manufacturing sector.
Subsidies range from 15 percent to 45 percent of the fixed capital investment, covering costs for land, buildings, machinery, electrification, office equipment, and pollution control devices.
Key features:
Priority sectors in the ESS include rubber-based industries, agro and food processing, renewable energy equipment manufacturing, biotechnology, export-oriented units, biodegradable plastics, recycling, bio fertilisers, and pharmaceuticals.
Excluded sectors include service enterprises, breweries, sawmills, granite crushers, power-intensive units, and others.
As Minister P. Rajeev noted, Kerala has made significant strides in business-centric reforms, particularly in facilitating utility permits and streamlining tax payments. These improvements come alongside a series of citizen-centric initiatives, such as the online single-window system, certificate issuance by urban local bodies and the revenue department, as well as enhancements in public distribution, transport, and employment exchange services.
Despite Kerala’s commendable achievements over the last two decades in human development indicators—such as high life expectancy, low death rates, a balanced gender ratio, high literacy rates, and low poverty levels—the state has struggled with the perception of being business-unfriendly.
This image has hindered its ability to attract investment, primarily due to delays in clearances at the local self-government level, which can be particularly frustrating for small and medium enterprises. In contrast, larger investors often benefit from quicker access to decision-makers, highlighting the concerning lack of a level playing field in the business environment.
The LDF government has emphasised its commitment to attracting businesses to generate job opportunities for the youth, who are becoming increasingly restless due to limited employment prospects.
Although Kerala still faces substantial challenges in fostering an environment conducive to business growth, it is evident that the state has made a promising beginning. It is essential for the government to sustain this momentum and continue advancing efforts to make Kerala a more business-friendly state, stated Rajeev.
(Edited by Ananya Rao)
