MEMORANDUM

21st August 2015

Hon’ble Sir, We congratulate you for giving the right direction in such a short tenure for the development of Vidarbha. We appreciate your initiative in setting up of various institutes like IIM, AIIMS, CIPET, NIPER and CPRI. We welcome the various industrial investments planned and initiated in the region like Revamping MIHAN, Defense and Textile Park in Amravati and Yavatmal which will boost the industrial scenario in the immediate future and will be path breaking for the future. We also appreciate the efforts in creating/revamping and boosting the infrastructure of the region through Metro Rail, London Street, Express Highway Connectivity from Nagpur to Mumbai and removal of bottlenecks in the form of Forest Clearances in Long Delayed and Much harrased National Highway Projects. We recognize the facts that these initiatives are meeting the immediate needs of the region, but some of them are going addressed towards the structural changes required to radically change the region for the better. To further improve the industrial environment and the investment sentiment in the region we highlight a few challenges faced by the region and the measures required to correct those anamolies; 1) DECENTRALISATION

1) MIDC

2) Fire Department

3) MPCB

4) Environment Clearances

5) Factory and Safety Departments

6) Labour Department

WAY OUT:

a. Reduce duplication of procedure. b. Decentralize Power at Local Levels. c. Follow Gujarat Model and “Self Certification” by entrepreneurs with respect to

compliance of rules and regulations. d. Discuss with Entrepreneurs, their difficulties and find user friendly solution. e. Reduce the need to go to Mumbai. f. Notified Area like MIDC be given the charge to implant the provision of the FIRE

ACT as was the case earlier. Fire Department should concentrate only on Fire Management and Trainings.

g. Implement Changes in the Labour Laws at the earliest : 1) Allowing female

employees to work in night shift in Maharashtra to improve their economic situation and also handle the shortage of labour situation 2) Recently new minimum wages have been declared for power loom sector which saw more than 200% rise in monetary benefit. Similarly, notification of new rates for minimum wages is on anvil for other textile sectors. 3) We request you to take a considerate view of the cost of doing business in Maharashtra and accordingly have a very reasonable hike in minimum wages amount.

h. Implement GST at the earliest without having cascading effect of 1% additional tax to

enable Vidarbha emerge as the ‘Logistic Hub’ of the Country

2) MARKETING VIDARBHA / ADVANTAGE VIDARBHA: There is a need for effective marketing of the region at various cities / investor destinations across the country. For this purpose, we propose that Road Shows be conducted in all metros and other investor destinations followed by “Advantage Vidarbha” at Nagpur. VIA has tied up the WTC, who are ready to conduct Road Shows across India, also stalls of “Advantage Vidarbha” should be placed at various Trade Fairs supported by Government of Maharashtra and Government of India.

We need to attract investment in following areas :-

a) Engineering / Automobile. b) Defense c) Pharmaceutical / Chemicals. d) Logistics – Warehouses / Cold Chains. e) Tourism f) IT / ITES

It is our suggestion that certain part of new Industrial Area in Butibori be earmarked for large industries which will lead to ancilliarisation of SME sector. However, any major investment done in the region to boost ancilliarisation, the economic activity and the employment generation in the region will fail because the development will happen in border areas in the neighbouring States to take advantage of the power tariff. Today, in majority of the business power has become major raw material and if the issue is not addressed the development of this region is impossible. 3) POWER TARIFF ISSUES OF LESS DEVELOPED REGIONS LIKE

VIDARBHA AND MARATHWADA: a) Costly Power tariff as compare to neighboring states - To provide relief, it is proposed

to implement “ ZERO CROSS SUBSIDY” to open access users in Vidarbha Region for a period of 5 years. This is already announced by Hon. Chief Minister in last Winter Assembly session.

b) Minimum quantum of open access users be brought down from 1 MW to 100 KW so that more & more units can advantage of this.

c) Restoration of Night rebate from Rs. 1.5 to Rs. 2.5 – it is quite well known that lot of

power gets wasted in night hours due to less industrial activity. MERC has very rightly understanding the need to propel night consumption, had given extra rebate for off peak hours. Even before manufacturing units in the region could shift their operation to night hours, it has been restored back to original amount. It is far better to provide cheaper power to industries of the region during night hours rather than selling excess power on exchanges for the benefit of outside state companies.

d) Powers to be delegated at Nagpur level – for several routine demands, industrialists of the region are required to go to Mumbai for getting their power related approvals. Inspite of repeated assurances in the past, no powers are delegated to regional centres like Nagpur. This is give lot of ease in doing business, if appropriate authority is given to regional centres.

e) MSEDCL should be asked to buy power through auctions so that the power purchase

cost can be brought down and the benefit can be passed onto consumers.

f) Sick units should be revived – there are number of private units which are currently shut down owing to less off-take of power and shortage of fuel as raw material. This is even though when these units are situated on the pit head of the coal mines / power plants. Hence in the national interest, it is imperative that these units be given fair chance to revive their operations.

g) Quick implementation of redressal forum orders which otherwise are kept pending for

long time

h) Strengthen Transmission Lines to ensure no over load and power flows into any districts in an emergency.

3) COAL: Quantity: As per NCDP FSA has to be signed on basis of normative quantity, which has not been done till date. At the time of signing of FSA, consumers were forced to sign FSA on the 75% of MPQ & balance 25% quantity was told to be procured through E-Auction mode. Our member units adjusted themselves with the situation and maintained their production accordingly. Further, FSA was signed in April-2008 for period of five (5) years valid till April-2013. As per CIL Board FSA was to be signed / renewed for further period of five (5) years. Although the other subsidiaries of CIL have signed for five (5) years, WCL is the only subsidiary which is signing FSA for the period of one (1) year.

With the above decisions taken by WCL our member units got affected resulting into loss of production. The industries of the region located near the pit head of mines are forced to buy coal from the open market by paying higher price at an average landed cost of coal around Rs 6,000 / mt without any GCV guarantee. For running the industry the main fuel is coal, which is not available as per the required quantity & quality. Therefore, it is mandatory for WCL to follow the provisions of NCDP as well as CIL guidelines by extending the FSA period for five years. Quality: The quality of coal being supplied is not as per the declared grade specification. It has been found that there is slippage of two / three grades. The coal consumers have been representing this at the mine level as well as the HQ level. But due to “MONOPOLISTIC APPROACH” of the coal company, consumers are forced to lift inferior quality of coal for operating their unit on continuous basis. Corrective steps need to be taken to improve the quality. For this purpose periodical joint sampling of coal with representatives of our Association be allowed. Based on these periodical sampling result corrective steps be initiated. In case quality of any mine is found to be inferior repeatedly the consumers drawing coal from that particular mine has to be reimbursed based on periodical sampling results.

ISSUANCE OF LINKAGES: The linkages have not been granted to erstwhile Non Core Sector Consumers from 1998 onwards. Many of the coal consuming, existing industries have enhanced their capacities by installing additional equipments & also many new industries have come up in the region. Further, some of the existing erstwhile Non Core Sector Consumers having FSA are getting their supplies as per MPQ, were earlier getting higher grade coal, whereas, the current supplies / mechanism per FSA (lower) grade coal, has resulted into reduced quantity & quality both. The existing erstwhile Non Core Sector Consumers & New industries procuring coal through E-Auction mode as alternative to linkage as per MOC / CIL, these industries to be granted coal linkages. The quantity procured by these industries through E-Auction mechanism speaks volumes regarding their addition requirement of coal. 4) MIDC POINTS:

a. Difference in Rates of Land of MIDC and Ready Reckoner : The ready reckoner rates must be same as MIDC rates otherwise it leads to lot of explanation in various other Central and State Departments. Please correct this discrepancy at the earliest.

b. It is really disheartening to note that MIDC Ex. Eng. Department Charges the Development Charges on Ready Reckoner Rate and not on the MIDC Land Rates. Even Labour Cess Charges is too high.

c. There should be decentralization of Power and the R.O. should be empowered more.

Even we request you to have a Separate Dy CEO and GM Legal for Vidarbha Region based at Nagpur, so that No. of Files moving to Mumbai will reduce and the decisions can be taken at better speed. Even looking forward to the changing scenario of Industrial Estates coming in Vidarbha, this will help in Investment coming to the Region at good pace.

d. Residential Plot Allotment Policy and Flats for Industrial Worker, needs to be revamped in consultation with the Association.

e. At present Water / Service / Fire Charges are very high. They need to be rationalized.

f. At Nagpur, Regional Office there is great Staff Crunch and the available Staff is also not up to the requisite quality standards. They need lot of training before being transferred on the Posts.

g. There should be a Fix Time Limit for the Allotment of Land demanded for the purpose of Expansion of Existing Units as this Creates more jobs and more revenue to the State Exchequer immediately.

SANCTIONING NORMS FOR DEVELOPMENT OF WAREHOUSING IN VIDARBHA: 1. The Government is focused on development of warehousing, in view of wastage of

huge quantum of Agricultural & Industrial produce, both; due to inadequate warehousing infrastructure.

2. The Union budget provides for adequate financial provision for warehousing

infrastructure, which requires intervention to turn same into reality.

Bottlenecks for development of warehousing

The NIT (Nagpur Improvement Trust) has NO specific norms of sanctioning warehouses. Following NIT bottlenecks are important : 1. NIT views “warehousing applications” under the category of “residential

layouts”. While residential layouts allow upto 75 % area plot able along with FSI of 1, whereas, warehousing allowed only 20 % area buildable !

2. NIT permits single warehouse shed on one site, irrespective of size of land whereas multiple sheds required to segregate produce stored & separation for control fire risks.

3. NIT charges “supervision fees” of Rs 3.77 lacs / acre land, for sanctioning

warehouses towards sewer connection, etc, whereas, no such infra required, thus saddles expenses.

The Collectors office requires 12 to 14 clearances (including NIT), to

convert land into “Non Agricultural (NA) use”, where as warehousing is actually a support activity for agriculture and industry both. NA conversion therefore NOT required for warehousing.

Locating warehouses along outer ring roads / highways is better way to avoid congestion and easy access to consumer to reduce logistic cost & help control inflation.

There is urgent need for intervention, for the “single window clearance” and “appropriate sanctioning guidelines for the State Government” for the development of warehousing infrastructure on priority for the success of “make in India dream for the overall development”.

We reiterate that though the initiatives taken are in the right earnest and direction, the entire efforts will be wasted if the problems of decentralizing the powers from Mumbai to Vidarbha, Power tariff and Coal rates rationalization, Self Certification, removal of non-modavatable 1% GST in the upcoming GST regime will go a long way in improving the industrial environment and investment sentiment in the region. Thanking you, Yours faithfully, Atul Pande President Enclosed : Detailed attachment on following tpics: 1. Plastics 2. Power 3. Pharma 4. Fertilizer 5. Textile