Madhya Pradesh is a landlocked state and this is the main reason that in comparison to coastal states such as West Bengal, Tamil Nadu, Odisha and Gujarat it gets lesser investment in industrial sector. Industrialists have to spend a sizeable amount in exporting their products from the state.
Identifying the problem, the state government has come out with export subsidy scheme. The export unit shall be eligible for reimbursement of 50pc of transportation costs incurred for moving finished goods from factory premises to seaport or to air cargo facility. This subsidy is available for a period of five years up to Rs 40 lakh per unit per year, maximum up to Rs 2 crore.
Rajiv Agrawal, President of Association of All Industries Mandideep, said that the state government’s decision to provide 50pc reimbursement on export is a welcome step. But this subsidy needs to be enhanced to attract substantial investment in the state. ‘Haryana is a smaller state in comparison to Madhya Pradesh and it is also a landlocked state. But its export is five times more than our state. It has made slabs to provide subsidy on export and its export subsidy extends up to 75pc,’ he said.
Currently, Madhya Pradesh’s contribution in total export of the country is 2.8pc. It has potential to increase export contribution to 4.5pc. Even the officers of Madhya Pradesh Industrial Development Corporation (MPIDC) agree that Multinational Companies (MNCs) do less investment in state in comparison to coastal states as it is a costly affair for them to export their finished goods from the state.
When contacted, Executive Director of Madhya Pradesh Industrial Development Corporation , Vishal Singh Chouhan said that to boost industrial investment, the government has come up with a plan to provide subsidy on exports. Talking about implications of landlocked state, he however argued that the state is a good destination for industries which want to supply their goods across the country as the state is a central point of the nation.
‘Atmosphere must be there to attract MNCs’
Dinesh Patidar, Chairman of Shakti Pump India limited said that if the government wants to attract Multinational Companies (MNCs), then it has to create an atmosphere akin to Hyderabad or Bengaluru where MNCs are abound.