The Southern India Chamber of Commerce and Industry (SICCI) has urged the Tamil Nadu government to form a high-level committee to look into various labour issues in the state. The chamber has also urged the government to immediately look into infrastructure bottlenecks and various issues including a special package for new units to attract investments to the state.
According to the Centre for Monitoring Indian Economy (CMIE) data as of March 31, 2009, Tamil Nadu has attracted an additional investment of Rs 1.68 lakh crore, an increase of 41 per cent increase over the previous year. In the last three years, the government has signed 22 MoUs, besides giving structured packages to eight industrial projects. These approvals have resulted in an investment of Rs 38,700 crore and employment generation of about 200,000.
SICCI said that the state can attract further investment if the government addresses issues including removing regulatory burden and improving infrastructure in the state.
Labour market restrictions on hiring and retrenching workers is one of the greatest challenges of doing business in any country. Rigid labour regulations have prevented Tamil Nadu from unleashing its full potential in labour productivity. The existing rigid labour regulations deter greater employment generation, SICCI said.
The chamber suggested that the government should form a high-level committee to look into the various labour laws and it is the right time to reform the laws to attract greater investment into the state.
Power is a major concern in the state, which has a generating capacity of 12,000 Mw. The demand is 35 per cent higher than supply. Hence, the state government should make proactive arrangements with private players for power supply and make the tariff more attractive for them for higher generation, the chamber added.
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The state also has a potential to develop export-oriented units for auto ancillary, textile, chemicals and petroleum, construction and agro processing sectors. These should be explored by providing a special package for new units and giving them a single-window clearance. “Overseas companies are keen to supply the critical components which will go into these main industries. They are often deemed ineligible for allotment of land in the special economic zones, owing to the stipulated criteria laid down by SIDCO and the Tamil Nadu Guidance Bureau,” it added
The chamber urged the Government to consider relaxation of provisions in the eligibility criteria for allotment to critical component industries, which can be determined on a case-by-case basis depending on the volume of imports and availability of those parts locally. This will not only ensure more investments but also enhance the economic scale of activities, it said.