While Madhya Pradesh government has earmarked 20,000 hectares for industrial allocation ahead of Global Investors' Summit, most of the land bank is in remote areas where SMEs (small and medium enterprises) are reluctant to set up units. Experts say the government needs to develop extensive social infrastructure if it wants SMEs to move to new industrial hubs.
The state has three industrial corridors — Bhopal-Indore, Jabalpur-Singrauli and Morena-Guna — where there is maximum land bank for industrial allocation. The industrial hubs in and around the cities are already saturated and land is available in locations away from the city limits.
While large industrial houses capable of building their own campus are agreeable to the idea of setting up units away from the city, the small industries are reluctant to do so.
"The small industries will agree to move to new industrial hubs only if there is a social infrastructure in place. The SMEs will need housing for labourers, schools, clinics among other things and also industrial infrastructure such as warehousing," Pithampur Audyogik Sangathan president Gautam Kothari told HT. "We need smart industrial hubs on the lines of smart cities," he added.
Not surprisingly, the state government's record in implementing the memoranda of understanding (MoUs) signed during previous investor summits remains poor. In rupee terms, only 17% of the investment committed during the investor summits by MSME sector has translated to actual production in the five- year period between 2007 and 2012.
Experts put the blame on lack of land availability near the city apart from bureaucratic delays in clearing files.
Echoing the view, Guild of Industries, Services and Trade (GIST) president Ashok Badjatiya said, "SMEs want land near the city and are not willing to move to remote locations where government is setting up new industrial hubs."
The industry associations have suggested to the government that SMEs should get land at concessional rates to encourage investment in the state. "We have asked the government to give land at 25% of its cost instead of having two separates rates for large and small industry," Kothari said.
When contacted, an industry department official said, "The state government has invited suggestions from industry associations for making changes in the land allocation policy. The government is working on tweaking the land allocation policy ahead of the investors' summit."