Maharashtra capacity to harbour industrial ecosystem coupled with visionary leaders and policymakers that successfully deploy resources in a strategic manner, makes the state a business destination like no other
Maharashtra is the economic and industrial powerhouse of India and is the largest economy in the country. The State’s GSDP is more than $400 billion, accounting for almost 15% of the country’s GDP. With a contribution of over 15% to the Industrial output of the country, the State records the highest value of exports, accounting for 21% of India’s total exports during 2019-20. In fact, Maharashtra was ranked 2nd on NITI Aayog’s Export Preparedness Index, 2020.The State has been a preferred investment destination for foreign investors since the 1991 reforms and has attracted more than $140 billion in FDI from 2000 to 2020, accounting for 30% of India’s share. Maharashtra also has the largest pool of trained manpower in the country and the highest employable rate in India.
What is it that makes Maharashtra one of the most preferred investment destinations in the country?
The State has been known for its dynamic leadership, an efficient administration, vibrant infrastructure, a progressive society and consistency in policies. To support and facilitate infrastructure- and investment-led growth, the Government of Maharashtra has consistently worked towards providing a strong policy framework comprising demand- and supply-led incentives and subsidies. In addition, the State offers the highest employable talent due to its constant focus on training, capacity building and upskilling of its manpower. Dedicated policies, including the Indus- trial Policy, 2019 and the Package Scheme of Incentives, 2019, have influenced the infrastructure-led development.
Acknowledging the development of infrastructure and logistics, the Government of Maharashtra has displayed high priority towards the development of transport and allied services. Over 30+ mega projects are currently under development and $40 billion is already allocated in developing transport infrastructure around key manufacturing and industrial zones. This has attracted investors across the State and is helping develop logistics equitably.
FIBRE TO FASHION: VALUE CREATION IN TEXTILES
A critical role is played by the textile industry towards the national economy, amounting to over 14% of India’s industrial production, 4% of its GDP and 13% of its total exports. A similar role is played by the textile industry to the State’s economy as it is the second largest, employment-generating sector after agriculture and has witnessed a sizeable increase in ginning, spinning and weaving. This is due to the State’s strong connectivity in road, rail, airports and ports and the availability of skilled manpower, electricity and resources. In addition, the climatic, geographic and demographic conditions of the State have consistently pushed the consumer and producer demand for this sector which has led to the sector’s consistent growth.
The Magnetic Maharashtra 2.0 programme was launched by the Hon’ble Chief Minister in June 2020 to target the restoration of Maharashtra’s economic activity and fight against the impacts of the COVID-19 pandemic
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The Textile Policy 2018-2023 is a revision to the State’s Textile Policy 2011-17, which realised the concept of Fibre to Fashion. The previous policy led to investments to the tune of Rs 20 crore and employed 3 lakh new people, which inspired the need to revise the policy. Mumbai and other textile clusters have been export hubs, and the increasing demand for silk, silk products, wool, cotton and non-conventional yarn has exploited the complete potential of this sector. The ongoing textile policy aims to generate 10 lakh new employment in the next 5 years and generate investments worth Rs 36 crore, an ambition far bigger and inclusive than the previous policy. To meet the essential infrastructural requirements and emergency funding, the policy also provisions the creation of a Textile Development Fund for strategic use.
Additional focus points like promoting textile-related Research & Development, establishing the entire textile value chain from farming to marketing, creating a Silk tourism corridor and creating an internationally competitive textile industry in the State by focusing on processing, knitting, hosiery and garmenting sectors are also covered in the policy which makes the entire textile strategy more comprehensive and inclusive.
REACHING THE SKIES WITH AEROSPACE AND DEFENCE MANUFACTURING
Maharashtra has a thriving Defence & Aerospace industrial manufacturing ecosystem and has recently facilitated cluster-wise development led by one or more anchor units. The Government of Maharashtra has prioritised to develop and promote Maharashtra as the Aerospace & Defence manufacturing and export hub for which, it released the Aerospace & Defence Manufacturing Policy, 2018. Maharashtra already has over 42% of India’s efforts in Aircraft, Spacecrafts and Parts, Ships, Boats and Floating Structures. As the policy specially focuses on developing MSMEs to be the supplier base to anchor units, the Government of Maharashtra has now created a corpus of Rs 1,000 crore to provide initial capital to these MSMEs.
The State has already prepared multiple defence manufacturing hubs in Pune, Nagpur, Ahmednagar, Nashik and Aurangabad, thus contributing substantially to the Centre’s target of reducing India’s dependence on defence and aerospace imports. Nashik is the biggest defence manufacturing hub with the presence of Hindustan Aeronautics Limited (HAL), and Nagpur is currently being promoted for the MRO facilities it offers.
The vision of Maharashtra is to establish the State as the most favoured destination for domestic Defence and Aerospace manufacturing and develop the MSME eco- system to facilitate the same. In addition, the State has already made efforts to actively promote Research and Development in this sector, with the policy already providing fiscal and non-fiscal incentives to investors set- ting up R&D centres. These incentives cover both new and existing R&D institutions, testing facilities, incubation and innovation centres. Parallel to R&D is skill development through vocational and technical training courses being provided to meet the needs of the skilled and semi- skilled manpower in the Aerospace and Defence sectors.
MIDC – FACILITATING INVESTMENTS
A critical role in bringing investments and ensuring infrastructure development in the State is played by the Maharashtra Industrial Developmental Corporation (MIDC) which is the Government and acts as an important link between investors and the government. Currently, MIDC administers the investment lifecycle in the State from out- reach to aftercare and is responsible for providing essential infrastructure to businesses like land, power, water and more. MIDC as an investment promotion agency is strongly supported by the State government’s pro-industry policies and incentive schemes.
Even during the COVID pandemic, MIDC has facilitated investment commitments worth Rs1,67,762 crore in one year since June 2020 till now, under the Magnetic Maharashtra 2.0 initiative. The Magnetic Maharashtra 2.0 programme was launched by the Hon’ble Chief Minister in June 2020 to target the restoration of the State’s economic activity and fight against the impacts of the COVID-19 pandemic. Besides these investment commitments, the State also attracted direct investments of Rs 22,142 crore from December 2020 till July 2021 and FDI investments of Rs 2,01,948 crore between October 2019 and June 2021. With these investments, the State has succeeded in mobilising industrial investments of over Rs 2,00,000 crore. Between June 2020 and October 2021, MIDC has signed 59 MoUs with large conglomerates, including those from countries such as the US, the UK, Spain, Japan, Singapore and South Korea.
These commitments underpin the fact that Maharashtra continues to be the powerhouse of industrial development in India. It has been growing rapidly and is on the path to becoming the nation’s first trillion- dollar economy.