Business Portal of India : Investment Opportunities and Incentives : State Level Investment : Kerla : Investment Policies and Incentives

The Government of Kerala has designed a package of policy measures and incentives, which seeks to make Kerala one of the most attractive investment destinations in the country. These policy documents provide numerous opportunities for the investors by creating a favourable business climate in the State. They broadly aim to fully utilise the available resources; create the gainful employment; improve the quality of life of the people and thus promote the overall development of the State. However, the initiatives of making such policy announcements vary from one sector of the economy to the another.

The major being, the Industrial Policy, which aims to accelerate the industrial growth in the State by attracting a steady stream of investment into the industry, infrastructure and core strength sectors. The policy also aims to implement a number of constructive changes to increase the efficiency of the thrust sectors; small scale industrial units; medium and large scale industries and the traditional industries. The objectives of the policy are to:-

Enhance and sustain the industrial growth rate as well as generate higher employment in the industry;

Create an investment friendly climate and facilitate measures for maximising global and local investment into the industry;

Maximise private investment in infrastructure development;

Eliminate all restrictive labour practices, ensuring cordial industrial relations and establishment of a new work culture, with productivity orientation and productivity-linked wages;

Enable a more liberalized environment within notified industrial zones, parks and estates through special legal dispensation;

Nurture the scarce entrepreneurial talent for the sustainable creation of industrial wealth with special emphasis on technically qualified persons, those from the business community, women and disadvantaged sections;

Coordinate industry with the educational system in order to produce and update the particular knowledge and skills required by industry form time to time;

Re-engineer the Government’s delivery mechanism (departments and agencies as well as systems and procedures) to make them responsive, result-oriented and transparent;

Promote special development of sunrise sectors including information technology, biotechnology, food and agro processing, infrastructure and service with high growth potential;

Maximise value addition within the State for indigenous produce and minerals as well as intensive growth (particularly export-oriented) of Kerala’s products and services;

Promote industrial development in a manner compatible with energy conservation and environmental concerns;

Ensure cost effectiveness and accountability by restructuring public enterprises;

Provide a social safety net for those adversely affected by industrial restructuring;

Reduce Government involvement in commercial activities and industrial production gradually; and

Empower the traditional sector to face upto the global challenges by appropriate technology, productivity improvement, design/development and marketing.

Another important policy is the Biotechnology (BT) policy, which has been framed to catalyse the development and application of BT, taking advantage of the State’s resources and emphasizing its specific needs while meeting global requirements. The policy aims to ensure the rapid exploitation of pipeline technologies and opportunities available in the State to products and processes as well as to promote the sustained build-up of an elite knowledge base through the strengthening and creation of educational and R&D institutions; establishing infrastructure; and putting in place administrative, regulatory, legal and financial framework conducive for investment and growth of BT enterprises. The objectives of the policy are to:-

Enhance the value with adequate assurance of quality in the State’s export-oriented resources such as spices and related plantation crops, sea foods and marine resources;

Upgrade productivity and evolve new application in rubber, coconut, tuber crops and develop novel internationally competitive products;

Ensure the sustainable and eco-friendly exploitation of the State’s forest, animal and marine wealth;

Boost the State’s renowned health care practices of Ayurvedha by synergising traditional knowledge with the scientific validation;

Evolve means to conserve and substantially use one of world’s most-valued biodiversity treasures located in the State;

Promote traditional tribal and ethnic knowledge in medicine and other areas of human welfare by scientific validation and facilitating intellectual property rights;

Develop recombinant DNA and other modern technologies to combat the major health hazards of the State such as cancer, diabetes and cardio-vascular and other physiological disorders;

Protect the State’s agriculture, spice, plantation and forest crops, from biotic and abiotic stresses.

Enhance the quality of the environment and promote sustainable development;

Create, coordinate and disseminate a data base encompassing the above cited areas;

Provide an ambience with a package of guidelines for financial support and incentives, legal and labour reforms as well as institutional autonomies needed for the healthy, efficient and competitive growth of biotechnology knowledge base and industry.

Besides, the State Government has also formulated an Information Technology (IT) Policy in order to create an appropriate pro-business, pro-enterprise, legal, regulatory and commercial framework to facilitate the rapid growth of the IT industry in the State. The policy aims to establish Kerala as a global center for excellence in human resources, through the creation of a large pool of diverse, multi-skilled technically competent manpower in the State. It thus aims aims at creating an internationally competitive business infrastructure and environment for the IT industry in the State, on par with the best facilities and practices worldwide. The immediate objectives of the policy are to:-

Establish Kerala as a leading IT destination in the country within the next five years;

Provide a nurturing and enabling environment conducive to the vigorous growth of the local IT industry in the State;

Create direct and indirect employment in the IT sector;

Attain a minimum growth level of 100% every year in IT;

Accelerate the levels of investment inflows including foreign capital into the hardware, software and ITES sectors;

Promote the State as the destination of choice for emerging IT business opportunities including IT enabled services, new media products and e-services.

Develop Kochi as an international media and ICT hub; and

Consolidate and expand the Technopark, Trivandrum as a leading software and HR centre in the region.

Also, there is an Energy policy, which is directed towards placing a greater thrust on overall development and promotion of renewable energy technologies and applications. The policy aims to facilitate excellent opportunities for increased investment into this sector, technology upgradation, induction of new technology market development and export promotion. The objectives of the policy are to:-

Develop and promote the non-conventional energy sources;

Exploit natural resources to avail cheaper power;

Accelerate identification, development and implementation of new projects with the long-term objective of substituting all non-renewable sources;

Develop eco-friendly projects;

Provide a 'single window' service for technical consultation, sources of finance and project clearance;

Reduce expenditure on transmission lines, transmission and distribution losses;

Create self-sufficiency in power in the near future;

Create suitable environment for private participation in power generation sectors;

Promote publicity of renewable energy through various media.

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