Coimbatore: Coming Of Age

For years, a Communist administration and militant labour force deterred investment in Kerala. But now, one city breaks free.

It may be god's own country, but it has the devil's own people,'' says a senior executive with Empee Distillery, Kerala's biggest liquor-maker. Even until a few years ago, that would have been an acerbic comment, coming from a harried corporate. Today, that's said half in jest-an indication that one of Communism's last bastions in India may be falling. Ever since the state of Travancore-Cochin was formed in 1949 as a precursor to the united Kerala of today, the state had been in a continual state of political turmoil. The lack of a stable government and the state's reputation for a belligerent labour force kept industry out.

Apparently, things have been changing over the recent years. According to the Centre for Monitoring the Indian Economy, between August 1991 and May 2001, Kerala received 436 industrial entrepreneurs memoranda (or investment) worth Rs 7,777 crore, which is higher than the figures for Delhi and Pondicherry. The per capita income has increased from Rs 7,578 in 1994-95 to Rs 11,986. Kerala is the only state to have two landing points for submarine cables, and Thiruvananthapuram will be one of the three cities in the state to have a 2-mbps connectivity. No wonder, while the city's perceptual rank is 13, its factual rank is a high at two.

When BT visited the city, the state government was in the process of finalising separate policies for it, labour, and industry. The most significant change in the labour front will be declaring labour militancy illegal in industrial estates. Also, industries will be free to engage whoever they want for whatever purpose. Says N. Sasidharan Nair, Managing Director, Kinfra International Apparel Parks: ''This is an important change that will build business confidence in the state.'' Nair himself has successfully negotiated a deal with labourers in his park for daily wages that are productivity-linked and valid for five years.

On the IT front, the state has set up a special 'Mission Group it', which is aggressively wooing investments. TCS, for example, is one of the 50 companies to have set up its facility in the city's Technopark. Nearly 5,000 professionals work in the park, which runs its own power generating plant, and is supposedly the greenest it park in India. Says Sunil Gupta of IVL India: ''Initially I had some reservations. But the Technopark gave its facilities at a cost that was difficult to match elsewhere in the country. Besides, there were educated raw hands available for training.''

There are plans afoot in non-it areas too. The state recently cleared a proposal for a Rs 7,000-crore petrochemical project in Kasargod, and a Rs 6,000-crore special economic zone in Ernakulam. Petronet-cck's Rs 535-crore LNG Pipeline project, again at Kasargod got the nod too, as did five more projects ranging from radial tyre manufacturing to road building. In addition to these, Kinfra has spent Rs 37 crore till date on three parks: one for film and video, another for apparels, and the third for small industries. All these parks talk of a single-window clearance in 30 days.

The state reckons that the Video Park alone will bring in investments of Rs 200 crore and employ 1,000 people. The same holds good for the Apparel Park, which is more labour-intensive. ''We already have a skilled labour force of 1,000, so industries need not worry about availability of manpower for the Apparel Park,'' says Nair.

A robust tourism industry has made Kerala popular with foreigners. The state must now makeover its industrial policy to appeal to investors within the country.

Jobs@thiruvananthapuram

Ajit Issac, CEO, People-One Consulting
"Kerala has always been a quiet achiever."

Thiruvananthapuram is rapidly emerging as one of the top business destinations in the country. Investors are increasingly recognising the potential of the state. Why has this happened? For one, Kerala has always been a quiet achiever: it has 100 per cent literacy, the highest telephone density (35 lines/square kilometre), and two landing points for submarine cables. Its Mission Group it is aggressively selling the state to infotech majors.

Till some time back, labour in Kerala had a bad reputation. But with the communist movement waning worldwide, labour relations have shown a steady improvement. Nearly 64 per cent of the cases of disputes handled last year have been settled, and the number of fresh disputes have fallen. Although many man-days were lost due to strikes, the number of workers affected by strikes has declined from 75,183 in 1997-98 to 12,070 in 1998-99. These are encouraging signs, and will only propel the state towards its eight per cent overall growth target.