Deliberate attempts by the Kitex group in the image of Sully Kerala: Minister of Industry P Rajeev
The recent feud between major clothing group Kitex and the Kerala government grabbed headlines after Kitex, one of the state’s oldest companies, withdrew from a Rs 3,500 crore project to invest in Telangana. In an interview with Outlook, Kerala Minister of Industry P Rajeev spoke about the controversy and the state government’s commitment to making Kerala a good investment destination. Extracts:
Q) Kitex Group Chairman Sabu Jacob said he was forced to leave the state after multiple inspections by various government departments at the company’s manufacturing units.
His allegations are far from the truth. The inspections were carried out on instructions from the High Court of Kerala and the National Human Rights Commission on the basis of complaints from Members of Parliament, Members of Parliament and individuals regarding pollution issues and violations of labor law. My department has not launched any inspections. It is a deliberate attempt to tarnish the image of the state. The chairman of the group did not raise any complaints with me or the officials about the inspections. When I learned about it from other sources, I tried to contact him but to no avail. As Minister, I have done my best to resolve it. Our dissatisfaction is only with the way they defamed the state. However, we are always open to discussing with the company if they have any grievances.
Q) Isn’t it a huge loss for Kerala that Kitex has now decided to invest Rs 1,000 crore in a textile park in Telangana?
First, the group did not sign a memorandum of understanding with the government on a Rs 3,500 crore investment project. In January 2020, when we held an investor meeting, the chairman of Kitex has submitted a Letter of Intent (LOI) on this project. Although ministry officials later consulted with him, the memorandum of understanding has yet to be signed. Over the past 50 years or more, the business has grown using the possibilities and resources of our state. It is undesirable to portray Kerala as non-investment friendly to get more incentives from other states. It is against the interest of the state. Kerala has great branding value around the world.
We defend responsible investment. Kerala would be the destination for responsible investment in the country. The world changes. Globally, a quarter of investment in the last fiscal year has been focused on environmental, social and corporate governance (ESG).
Q) The group is also alleging a vendetta by the LDF government, as the Kitex ‘Twenty20’ political team has a significant presence in the local body in Kizhakkambalam, where the company is located.
They can have their own political interests. Why would CPM feel threatened by them? The clothing industries are facing serious crises around the world due to environmental issues. They move from state to state where cheap labor is available. It’s a very polluting industry and investors are looking for states where they don’t have to deal with environmental concerns. It could have been the case with this company too.
Q) Do you think the dispute has cast a shadow over investment prospects as the state now tries to entice more companies? The chairman of Kitex has publicly stated that doing business in Kerala is not easy.
This is not true. We are focused on promoting industries and creating a favorable climate for investors and our government has taken various measures in this regard. During the first Council of Ministers itself, we decided to present a bill for the establishment of a grievance mechanism. The bill will be adopted at the next session of the Assembly. We will establish a centralized inspection mechanism, which will be controlled by a software-based system. This will be implemented from August 1. We will also set up a commission to review existing laws on labor disputes and they will be decriminalized if necessary. All of these measures are taken to create an environment conducive to investment.
Q) Kerala still ranks 28th for ease of doing business.
But no one can explain how Lakshadweep got the 15th rank. We achieved 85% of the ease of doing business goals. We have problems with the criteria for setting the ease of doing business. With the exception of Kitex, most industry organizations are happy with the government and have given us their support. Business bodies such as FICCI and CII have made public statements praising the investment environment in the state. The Kitex was a planned movement.
Q) There is a perception that big investors are suspicious of labor unions and environmental groups because they do not allow any industry to run smoothly in the state.
All of these allegations are unfounded. How Did Maharashtra’s Big Textile Industry End? There have been incidents of violence in factories in Karnataka and other states. Some industries may have closed due to issues in Kerala. No major labor unrest has taken place here. We do not allow any industry or investor to flout the laws and rules. One of our main priorities is to protect the environment.
Q) Kerala has a high unemployment rate. How does the government plan to create jobs?
We need to generate more jobs and we are working to attract more investment in this regard. The state has favorable factors such as a highly skilled workforce and a secure environment for any investment. We also have good brand value due to our effective handling of the pandemic and the two floods that followed. Over 70,000 MSMEs have started operating in the state in the past five years. With big companies like IBM and Tata Elxsi about to start operations in Kerala, more and more companies are showing their interest. However, the only challenge we face is the scarcity of land.
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