Deliberate Attempts Made By Kitex Group To Sully Kerala’s Image: Industries Minister P Rajeev

The recent tussle between apparel major Kitex Group and the Kerala government grabbed headlines after Kitex, one of the oldest companies in the state exited from a Rs 3,500 crore project to invest in Telangana. In an interview with Outlook, Industries Minister of Kerala, P Rajeev, spoke about the controversy and the state government’s commitment to make Kerala an investment-friendly destination. Excerpts:

Q) Kitex group chairman Sabu Jacob says that he was forced to move out of the state after multiple inspections were conducted by various government departments at the company’s manufacturing units.

His allegations are far from reality. The inspections were carried out by instructions from the Kerala High Court and National Human Rights Commission based on complaints from MLAs, MPs, and individuals on issues concerning pollution and labour law violations. My ministry hasn’t initiated any inspections. It is a purposeful attempt to tarnish the image of the state. The group chairman did not raise any complaint with me or any officials regarding the inspections. When I came to know about it from other sources, I tried to get in touch with him but in vain. As a minister, I tried my best to resolve it. Our discontent is only about the manner in which they defamed the state. However, we are still open to discussing with the company, if they have any grievances.

Q) Isn’t it a huge loss for Kerala that Kitex has now decided to invest Rs 1,000 crore in a textile park in Telangana?

First of all, the group didn’t sign an MOU with the government on a Rs 3,500 crore investment project. In January 2020, when we conducted an investor’s meet, the Kitex chairman gave a letter of Intent (LOI) on this project. Though department officials consulted him later, MOU hasn’t been signed yet. In the last 50 years or more, the company has grown using the possibilities and resources of our state. It is not desirable to portray Kerala as non- investment-friendly to get more incentives from other states. That is against the interest of the state. Kerala has a high brand value all over the world.

We stand for responsible investment. Kerala would be the destination for responsible investment in the country. The world is changing. Globally, one-fourth of the investment in the last financial year was focused on Environmental, Social, and Corporate Governance (ESG).

Q) The group also alleges vendetta by the LDF government as Kitex’s political outfit ‘Twenty20’ has a significant presence in the local body in Kizhakkambalam, where the company is located.

They may have their own political interests. Why would CPM feel threatened by them? Apparel industries are facing serious crises all over the world due to environmental issues. They are moving from one state to another state, where a cheap workforce is available. It is a highly polluting industry and investors look for states, where they don’t have to deal with environmental concerns. It could have been the case with this company also.

Q) Do you think the dispute cast a shadow on investment prospects as the state is now trying to woo more companies? Kitex Chairman went public saying that it is not easy doing business in Kerala.

That is not true. Our focus is on promoting industries and creating an investor-friendly climate and our government has taken various measures in this regard. In the first Cabinet meeting itself, we have decided to introduce a bill for setting up a grievance redressal mechanism. The bill will be passed in the upcoming Assembly session. We will constitute a centralized inspection mechanism, which will be controlled by a software-based system. This will be implemented from August 1. We will also constitute a committee to look into the existing laws on industrial disputes and they will be decriminalized if need be. All these steps are taken to create an investment-friendly environment.

Q) Still Kerala ranks 28th in ease of doing business.

But nobody can explain how Lakshadweep got the 15th rank. We have fulfilled 85 percent of the targets in ease of doing business. We have issues with the criteria of fixing the ease of doing business. Except for Kitex, most of the industry bodies are happy with the government and have extended support to us. Business bodies such as FICCI and CII have made public statements lauding the investment environment in the state. The Kitex’s was a planned move.

Q) There is a perception that big investors are wary of the workers' unions and environmental groups as they don’t allow smooth functioning of any industry in the state.

All these are baseless allegations. How did the big textile industry in Maharashtra shut down? There were incidents of violence in factories in Karnataka and other states. Some industries might have closed down due to issues in Kerala. No major labour unrest has happened here. We don’t allow any industries or investors to flout laws and rules. One of our main priorities is to protect the environment.

Q) Kerala has a high unemployment rate. How is the government planning to generate jobs?

We have to generate more jobs and we are working to attract more investments in this regard. The state has favourable factors such as a highly-skilled workforce and a safe environment for any investment. We also have a good brand value due to our efficient handling of the pandemic and two subsequent floods. More than 70, 000 MSMEs have started functioning in the state in the last five years. With biggies like IBM and Tata Elxsi set to begin their operation in Kerala, more companies are evincing interest. However, the only challenge before us is land scarcity.