Maharashtra is losing its consolidated position in chemical, automobile and metal engineering sectors to states like Andhra Pradesh, Karnataka and Gujarat.
Maharashtra is losing its consolidated position in chemical, automobile and metal engineering sectors to states like Andhra Pradesh, Karnataka and Gujarat.
According to a study conducted by Knight Frank India Pvt Ltd, the chemical industry is one of the important sectors where Maharashtra has seen a downfall. The relative performance over the last decade has been disappointing with the sector achieving an annual average growth of mere 8% in comparison to states like Andhra Pradesh and Karnataka, which recorded 17% and 18% growth, respectively.
The share of this industry in the state’s manufacturing pie has declined from 22% to 13% between 1999 and 2009. Labelled as a “retreat” industry, the state has lost employment potential offered by the industry.
Dr Samantak Das, National Head-Research of Knight Frank India, said that during the last decade the state did not add any meaningful employment in chemical sector.
“While annual employment growth in Andhra Pradesh, Karnataka and Gujarat was 7.2%, 2.3% and 1%, respectively, it was a mere 0.2% for Maharashtra. Now that Maharashtra has lost on petroleum, chemicals and petrochemicals investment region (PCPIR) policy benefits, an enormous opportunity to boost manufacturing, exports and employment is lost to other states,” he said.
Similarly, the Indian automobile industry has been growing by leaps and bounds over the last decade. But the industry in Maharashtra is growing at a lower rate in comparison to Karnataka and Tamil Nadu. And now, Maharashtra is losing out to Gujarat.
When Tata Motors moved out of Singur in West Bengal, it chose Gujarat over Maharashtra. For its second plant, Ford Motor has signed a deal of special incentives with Gujarat instead of Maharashtra.
While India is making its mark as a global automobile manufacturing hub, Maharashtra is losing the battle to states like Gujarat and Andhra Pradesh.
Indecision and delays on giving out the promised tax incentives to existing players in the state has already infuriated players like Bajaj Auto. Other automobile majors like Volkswagen and Mahindra & Mahindra have also complained about similar problems. Bajaj Auto, which has a facility in Pune, has also complained about the labour problems.
According to the study, at least 43,623 acres of land was required till 2016 to sustain a projected manufacturing growth rate of 20% per annum. However, the state government has struggled to provide large land tracts for mega projects.
Automobile sector will have strong backward linkage with the metal and engineering industries. So ignoring automobile sector can have a cascading effect on these sectors as well. In the manufacturing sector report, the metal industry of Gujarat and Tamil Nadu was placed in the “rising star” category whereas Maharashtra was in “retreat” category.
In the engineering sector, Gujarat is branded as “rising star”, while Tamil Nadu “out performer”. Maharashtra was under the “lost opportunity” category.
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