A favorable industrial policy and the availability of a large talent pool have made Maharashtra the country’s manufacturing hub. Moreover, the State has a large consumer base and ranks high in the purchasing power index.
Also, despite being home to most of the top large corporates, the state’s industrial policy also favors small and medium enterprises (SMEs).
The Maharashtra government has launched a Make in Maharashtra campaign to attract foreign and domestic investment in manufacturing. The policy and concessions offered under the campaign have created great business opportunities for manufacturing majors, for start-ups and technology companies that provide support services.
Notwithstanding the demonetization impact, the state government signed MoUs worth Rs. 3.65 lakh crore for industrial projects, mainly in manufacturing. The state has a vibrant industrial corridor in Nashik, Pune, Konkan, Nagpur, Aurangabad and Amravati.
Rishabh Agarwal, Managing Director, Responsive Industries, said Maharashtra is one of the most industry-friendly states with the least labor strife. The state government has fixed the minimum wage for each industrial area, said Agarwal, who heads the vinyl flooring and synthetic-leather manufacturer’s operations at Boisar, on the outskirts of Mumbai.
Manufacturing industries in Maharashtra and Gujarat have an edge over others in terms of resource availability within reasonable distance. Moreover, Agarwal said, transportation costs come down substantially if goods are moved through the sea port. “The western region’s largest port, the JNPT, is just 150 km from our plant. We are able to export our products to 70 countries,” said Agarwal.
Saving on costs
The state provides a wide range of industrial infrastructure facilities, which cuts down costs on transportation, communication, water, electricity, waste management and labor.
Vijay Mansukani, Managing Director of Mirc Electronics, said the company recently began manufacturing TV panels for captive consumption at its plant in Wada, near Mumbai. “We also plan to manufacture TV panels and finished TVs for third-party international brands,” he said.
Mirc sells TVs, washing machines and air conditioners under the Onida brand. Its TV manufacturing plant at Wada is spread over 60 acres. The company has been manufacturing in Maharashtra for 30 years. It has generated employment for over 1000.
“Since we import a lot of components used in TV manufacture, we have set up the plant close to JNPT. The roads, railways, airports and ports in Maharashtra are well-connected, facilitating seamless movement of goods from Maharashtra to other parts of the country,” he added. In the erstwhile era of Value Added Tax (VAT), Mirc would maintain multiple godowns across states to comply with local laws. However, with the implementation of the Goods and Services Tax, all duty incentives from the Central and State governments have been abolished, providing a level playing field, he said.
The Maharashtra government has come up with incentives for upgradation of technologies and investment in R&D. This encourages companies to expand their manufacturing capacities in the state.
Ranking Maharashtra at the top in ease of doing business, Rajesh Bhatwal, Managing Director, Nitiraj Engineers, said the business environment is very conducive and industrial units can get approvals easily to set up any kind of manufacturing facility. The availability of growth capital for expansion and people are other major positives in the state, he said.
Nitiraj Engineers makes weighing scales, auto meters and cash-counting machines. The company is in the process of expanding its weighing-scale production capacity to 5 lakh from the current 1 lakh, and generating employment for 100 more people at Dhule, said Bhatwal.
Leap India, which started manufacturing pallets for the storage and transport of goods in warehouses 5 years ago in Maharashtra, has been registering 100 percent growth for the past five years. It has almost all the leading FMCG, beverages, pharma and logistic companies as its clients.
Sunu Mathew, Managing Director, Leap India, said the Maharashtra government’s policies for SMEs and large corporates are progressive, with single-window clearance facilities. The two large ports in Maharashtra and Gujarat are an added advantage, as the company imports almost all the raw materials. The other advantage is human resources, since people from various states live in Maharashtra. Mumbai being the financial capital, access to funding is not an issue. Leap India recently raised Rs 120 crore in equity in the first phase of growth capital. – Hindu Business Line