Business

Political stability, law and order imperative for industry

Governments try their best to ensure peaceful industrial climate

— FILE PHOTO

THE MENACE: A view of the Coca Cola bottling plant in Guntur district in Andhra Pradesh, after the Maoist attack, a recurring problem in the State.

As the Bangalore angle to the Glasgow terror attack began to unravel, and three erstwhile citizens from India’s Garden City were detained in connection with the failed plot, the Karnataka Government has tried to maintain calm.

Without getting involved in the on-going investigations, Chief Minister H. D. Kumarasamy’s first major pronouncement was: “Bangalore’ s reputation is safe,” and its brand image was in tact. His government’s message was simple — just because three of the suspects hailed from Bangalore, it did not make the city or the State less attractive to investors and industries.

That point was significant. Indeed, most States confronted with a militancy or law and order problem make it a point to reaffirm to the investor community that all is safe with the region and there need be no fears about the law and order situation. At a time when States are unable to offer many incentives or concessions to industry, their most attractive parameters turn out to be the speed of processing of proposals, and a peaceful industrial climate. Infrastructure facilities, of course, make a huge difference.

Senior functionaries at the Confederation of Indian Industry and the Southern Indian Chamber of Commerce and Industry emphasise that law and order, along with a stable political environment, matters a lot to investors. They argue that aside from the labour situation, which also includes the attitude of trade unions, the general law and order situation in a State can be a major attraction to investors. “Investors and industries normally look for stable governments, dependable political leadership, and a tough law and order enforcement machinery,” reasons a former Southern regional chairman of the CII.

He says despite the recent developments in West Bengal — in Nandigram and Singur — trade and industry in the State were happy with the attitude and the tough stand adopted by the Left Front Government in Kolkata. “Of course there are problems that need to be resolved, but industry must not get involved in political divides or debates. We choose a location for various reasons — raw materials, connectivity, logistics and the like. Having taken a decision to invest there, nobody wants to pull out. So, the support of the administration in seeing through the crisis becomes critical,” he explains.

Looking at the southern region, he feels that each State suffers from a particular problem and none of them can possibly offer an “ideal environment.” In Andhra Pradesh, the Naxalite menace was constantly in the news and troubling many industries. Industry in Karnataka had problems with the change of governments and consequently of policies; and now there was the repeated unearthing of terrorist links. Kerala was always a ‘volatile region’ because of the heightened trade union activity and the frequency of bandhs or hartals.

As far as Tamil Nadu was concerned, the tendency to identify investors and industrialists with political leaders has led to several problems, and the cycle of changes in government has sparked crises for many individuals or groups. Many decisions of the previous regime are reversed by the successor.

That was one reason for many industry majors deciding not to put all their eggs in one basket. They now tend to go in for second units or expansion projects in the neighbouring State, and this was true of service industries too. Availability of skilled manpower was another issue that guides investment decisions, he says.

V. JAYANTH

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