On June 29, the largest private-sector employer in Kerala, Kitex Group, announced the withdrawal of an Rs.3,500 crore investment project from the state. The company alleged that the state authorities are running a witch-hunt against them. Notably, Kitex Garments is the second-largest kids’ apparel manufacturer in the world. The group has now announced that they have got informal invites from over ten states, including Gujarat and formal invites from the state of Tamil Nadu, to shift their investments. Tamil Nadu has offered an array of subsidies, discounts and freebies if Kitex decides to shift its projects while stating how it is the most business-friendly state/
MD of Kitex group Sabu M Jacob has said, “After I disclosed the plan to drop proposed investment in Kerala, I have got queries from other states. Governments of Tamil Nadu, Odisha, and Gujarat have invited me to invest in their states.” He called Tamil Nadu a “very important, attractive investment destination.” Jacob said that principal secretaries and ministers from states across the country have been calling him up to discuss taking his Rs 3500 crore investment there from Kerala, but he has not yet taken a decision on it.
Meanwhile, a PTI quoted a senior Tamil Nadu official saying, “Proposal has been extended to the Kitex group, which is keen on investing Rs 3,500 crore in the textile sector.”
Guidance Tamil Nadu, the state’s Industries Department’s nodal investment promotion agency, sent a letter to Kitex inviting them to invest in the state. Gaurav Daga, Associate Vice President of Guidance, mentioned in the letter that it was being sent after a discussion between Tamil Nadu Industries Minister and Sabu Jacob.
According to Sabu Jacob, the state has offered him 40 per cent subsidy, land at half the market value, 100 per cent relaxation on stamp duty, 5 per cent tax reduction for six years, 25 per cent subsidy for environmental protection infrastructure, 50 per cent subsidy for intellectual property, Rs 4,000 per month for the training of each employee for six months, electricity subsidy, and several other freebies.
Sabu said, “The offer given by the Tamil Nadu government is irresistible, and I came to know that many facilities are being provided by our neighbouring state. However, a decision to shift from Kerala has to be taken after a lot of consultations with our team, our management… it will not happen in a day, but we are seriously contemplating it.” The state also assured to provide anything over and above the offers mentioned in the letter. Notably, the group has not decided yet where it would like to move its project.
Why Kitex wants to move out of the state?
According to Sabu M Jacob, there have been repeated instances of harassment by the government at the existing garment processing plant in Kizhakkambalam panchayat of district Ernakulam. Just before the announcement of withdrawal was made, Sabu said 11 teams of officers from various departments raided the company in the last month, including teams from the Department of labour, factories and boilers, and even a team led by the district collector.
He had said, “The Kitex factory has been functioning here for the past 26 years, and we have 11,000 employees. They arrive with a huge team violating Covid protocols and bring camera teams of online media. While our neighbouring states give a red carpet welcome to investors, the Kerala government treats them as traitors. They are branded as bourgeoisie, exploiters, encroachers, capitalists and criminals and humiliated in public. Whoever invests in Kerala will lose peace of mind and will be driven to suicide.”
“There are states that provide the PF and ESI share of the employees. Some states even offer Rs 5,000 salary for the employees for five years. We don’t demand any benefits from the government. At least they can stop harassing us. If the situation continues, Kerala will turn into a graveyard of industries,” he had added.
The 3,500 crore project for which Kitex Group signed a memorandum with the Kerala Government was announced at the “Ascend Global Investors Meet” in Kochi in January 2020. As decided, the Kitex Group was supposed to open an apparel park in Kochi and establish industrial parks in Kochi, Thiruvananthapuram and Palakkad.
No initial communication from the government
Sabu had alleged that even after disclosing that Kitex was planning to drop the proposed investment in Kerala, no one from the Kerala government contacted him. He added, “When I cannot run the existing units, why should I make fresh investment? Who can give guarantee for the new investment, which is envisaged to give jobs to 35,000 people? Despite the Covid-related crisis, we have been going ahead with the project and land has been acquired in Palakkad and Thiruvananthapuram for the apparel project.”
Industry Minister assured support
However, Industries Minister and CPI(M) leader P Rajeev said on July 3 that the government had taken serious note of the issue raised by Kitex. He said, “The government wants KITEX to revive the project which they had proposed here.”
Rajeev said that the Industrial Department had contacted the MD of the Kitex group. He further added that the Department is not in favour of surprise checks on the industrial units in the state. Urging the investors to contact the state authorities to take up their concerns, he said, “Everyone should keep away from making statements that impair the state’s image.” He assured that “positive steps” would be taken to resolve the issue with Kitex Group. He said the company should have talked to the government before taking up the issue on social media.
The minister further said that the incident with Kitex Group was a “one-off incident”. A meeting has been called by Chief Minister Pinarayi Vijayan on July 5 to discuss the issue and to ensure the industrial entrepreneurs get the facilities required by the concerned departments to run the businesses smoothly.
Later, Sabu Jacob confirmed to media persons that Industrial department officials had approached him, and he had given them a report on the issue. He also urged the government to prove the allegations of pollution against his company, and if the government does not have any proof, they should suspend the officers who raided his industrial units.
BJP alleged political vendetta
As per reports, Kerala BJP President K Surendran has alleged that the action against the Kitex group is a part of the political vendetta of the ruling CPI(M) party. Notably, Kitex had got into politics a few years ago and founded a party named “Twenty 20”. It tried its hands in the Kizhakkambalam panchayat and also in recent assembly elections on six seats but failed to win any.