The tryst with the Chief Minister of Kerala, Oommen Chandy, was as expected, worth every moment. Watching him handle and resolve a wide array of political and administrative issues not only kept us occupied, but also helped us delve into the mind of the seasoned politician and administrator who is into his second tenure as Kerala’s Chief Minister. The Dollar Business’ take on him: CM Chandy is a warm, strong-willed man on a mission with a clear vision – to make Kerala the leading export hub in the country

Interview by Satyapal Menon | The Dollar Business

TDB: Kerala is a land with immense resources. How do you plan to capitalise on this innate wealth of the state?

Oommen Chandy (OC): We have huge potential for developing a network of water transport facilities. The government is planning to create an inland transport system for the movement of commodities. Kerala is, in fact, the first state to introduce subsidies of Re.1/MT/km on transport of commodities. This first-of-its kind initiative got widespread appreciation during a meeting related to water transport, with many describing it as a role model that other states should follow. We are also focusing on inland navigation from south to north and planning to develop three corridors on this route, i.e., Kollam to Kottapuram, Kollam to Manjeswaram and Kovalam to Kollam. Of these, Kollam to Kottapuram is slated to be commissioned within a month.

TDB: Kerala is one of the top export hubs in the country. What strategies, policies and incentives is the state government extending to provide further impetus to exports?

OC: We have a traditional edge in the export of spice commodities and are still the leading state in the country. This is the case when it comes to coir products as well. Tea and coffee are two other major export commodities from the state, though we have been facing a slight slump in production in recent years. I hope this improves in the near future. We have also improved our share in marine and seafood categories by meeting international standards.

TDB: Kerala attracts a large number of tourists, both domestic and foreign, every year. What is its USP?

OC: The number one aspect is the physical diversity that Kerala offers. Kerala has hills, rivers, beaches, forests and backwaters that are all accessible in minimum time. This diversity is backed by the state’s unique culture and traditions that offer unique experiences to the visitors. The state delivers a world-class, yet local visitor experience and is positioned as a visible global brand in tourism. The state has a physical quality of life that is at par with that of developed countries. Our traditional healthcare system of Ayurveda is yet another area that evokes great interest among tourists.

TDB: What are your plans to further consolidate your strength in the tourism sector?

OC: We are going ahead with some mega projects that include the Muziris Heritage Project and the Spice Route Project in association with UNESCO. These projects have the potential to transform Kerala into a destination for cultural tourism. We are also aggressively sprucing up our tourism infrastructure throughout the length and breadth of the state. We are also making special efforts to promote ‘Responsible Tourism’ initiatives. We already have successful pilot projects in destinations like Kovalam, Kumarakom, Thekkady and Wayanad. On the marketing front, we are currently focusing on USA, Scandinavia, Russia, China, South Africa and the Middle East, which we reckon are emerging markets for Kerala. We are also making the maximum use of social marketing tools for effective promotion of Kerala Tourism. And the Kerala Institute of Travel and Tourism is now capable of catering to the human resource requirements of the industry.

TDB: Ayurveda seems to be attracting a majority of foreign tourists to Kerala, isn’t it?

OC: True. Kerala is reaping the benefits of Ayurveda, with many foreign tourists converging into the state for treatment and therapy. The popularity of this form of medicine has motivated us to promote and take Ayurveda to foreign countries.

TDB: What about policies to improve the ‘ease of doing business’ in Kerala?

OC: Kerala offers matchless investment potential with excellent law and order situation, unparalleled infrastructure, well-trained human resource pool and rich natural resources. Kerala needs to connect with the rest of the country to attract investment, tourists, shoppers, professionals, healthcare tourists and students. The government will encourage investment in environment friendly, employment generating and growth oriented sectors. We have the biennial mega investor meet – Emerging Kerala – to brand Kerala as investors’ own destination. Single window clearance system has further simplified procedures pertaining to investment. Although Kerala is not suitable for heavy industries due to paucity of land, we do have a credible presence of micro, small & medium enterprises (MSMEs).

TDB: Export zones, industrial corridors and smart cities are the buzz words in the country. How is your government positioned to give traction to such endeavours?

OC: The government will encourage setting up industrial units in dedicated industrial parks, where necessary infrastructure like power, water, roads, effluent treatment plants etc. are readily available. We will encourage special purpose vehicles (SPV)/ joint ventures (JV) between Kerala State Industrial Development Corporation (KSIDC)/Kerala Industrial Infrastructure Development Corporation (KINFRA) and private partners to develop the required industrial infrastructure. Our objective is to develop an appropriate mechanism to facilitate quick supply of water, power and other utilities in industrial parks and growth centres. Multi-storied industrial estates will also come up in all districts with priority allotment to SMEs. Industrial corridors and investment regions will be set up with the support of Government of India.

TDB: The state has not been able to live up to its potential and expectations when it comes to cashew exports. Has the state government taken any initiative to bring more area under cashew cultivation so as to meet the export demand?

OC: The cashew industry contributes significantly towards foreign exchange earnings and sustaining employment for women workers in certain geographical areas. The government has also exempted cashew plantations from the restrictions of land holding. We will support the industry and will strive for full employment and reasonable wages to these workers. Such measures will obviously have a positive bearing on the export front.

TDB: Labour-intensive, export-oriented industries related to cashew and other commodities are being impacted by labour crunch in the state. Isn’t it ironical that a state which has considerable unemployment problems is facing this problem?

OC: In Kerala, since most of them are educated, it is difficult to find human resources for hard labour. Their quest is for government or IT related jobs. This is the reason why our industries are dependent on labourers from outside the state. More than 10 lakh workers from outside Kerala are employed in various labour intensive industries here.

TDB: What initiatives have you taken to develop IT hubs in the state?

OC: We will leverage on the recent trends of IT firms to move towards tier II and tier III cities by providing appropriate incentives and concessions. The government will ensure that IT parks established in the state are equipped with green, eco-friendly, energy efficient layouts and interiors to provide world-class, cost-effective work spaces to small, mid-sized and large Indian and multi-national IT/ITeS companies. Considering the growing demand for space, the government will facilitate and encourage private initiatives to set up IT parks. We will support developing IT parks as townships. Technopark in Thiruvananthapuram, Infopark in Kochi, and Cyberpark in Kozhikode are the three IT parks promoted by the Government of Kerala. All these parks operate in hub & spoke model and we will continue to construct more built-up space as determined by respective boards and allot land through a transparent process. Kerala State IT Infrastructure Ltd. (KSITIL) is the apex company formed by Government of Kerala for pioneering the development of IT/ITES special economic zones (SEZs), IT townships and IT parks in the state. KSITIL will create basic infrastructure, including road access, water, and electricity for each project. KSITIL shall then allot land to private developers/IT companies for the development of IT parks/SEZs townships.

TDB: Can you elucidate various areas where Kerala has the potential to attract foreign direct investments (FDI)?

OC: The government will promote private investment, including FDI, for world-class infrastructure development in the state. We are looking forward to investment in food and agro processing, IT, biotechnology, manufacturing, education and knowledge-based industries, green energy, rubber and agro-based, healthcare, infrastructure development and hospitality services. As far as the advantages in the state are concerned, rental/real estate cost in Kerala is less than other major IT locations in the country. Power and water tariffs are also one of the lowest in the country. With regard to quality of life, Kerala ranks very high among Indian states in social indices be it health, education, housing, environment, law and order or low cost of living. We are currently focused on creation and improvement of civil infrastructure, connectivity among IT hubs and ancillary facilities.

TDB: There are many complaints related to Kerala’s port infrastructure. There also issues related to pricing and delays at local ports. Given this, what is the status of the proposed Vizhinjam International Deepwater Multipurpose Seaport, which is considered as another first by a state government in the country?

OC: Ports are crucial to economic development. We are on course to address the existing concerns of our exporters. Adding value to our existing major seaport at Kochi, will be the Vizhinjam international seaport. Similarly, although Vallarpadum Terminal is facing a lot of preliminary problems, it may prove be a success over the years, since it is located near the international sea route. Vizhinjam project has been in the pipeline for a long time now. When I was the Chief Minister in 2004, the plan for starting the port on public-private partnership (PPP) mode had reached final stages. We were about to award the contract to the lowest bidder. Since the bidder was of Chinese origin, we failed to get security clearances. Later, after LDF (Left Democratic Front) came to power, the project was shelved. When I became the CM again, we reactivated the process and shortlisted five companies for implementing the project. But, unfortunately, none of these companies turned up for the final bid. Now we have extended the time limit and have called for tenders again. We are moving ahead by fine-tuning the tendering process and I am highly optimistic that work on the Vizhinjam project will start this year itself.