Kerala Model: One of largest industrial groups Kitex axes Rs 3,500-cr investment plan in State, to shift base to Tamil Nadu

Upset over hostile attitude of the Kerala government and approach of Left politicians and corrupt bureaucracy, one of the largest industrial groups, Kitex, has announced its plan to cancel its proposed Rs 3,500 crore investment in the state. It is leant that the company might shift its base to neighbouring Tamil Nadu, which is doing everything to lure the disgruntled businessman. 

The flight of Kitex, which employs more than 10,000 employees directly and thousands indirectly is a major setback for industrial climate in the state. A dejected Kitex Chairman, Sabu Jacob, told a media outlet that only two businesses that are flourishing in Kerala are gold smuggling and ‘quotation business’ (supari killing). The CPI(M) cadres are thick into these businesses and the party allegedly gets a share from this illegal trade (according to one of the accused). 

Jacob on June 29 announced that the company wants to pull out certain projects from Kerala, he has received calls from 6 states. Tamil Nadu Industries Department’s nodal investment promotion agency called Guidance Tamil Nadu has sent a letter to Kitex on behalf of the state Industries Department. The Associate Vice President of Guidance, Gaurav Daga says in the letter that Sabu Jacob had discussions with Tamil Nadu Industries Minister and the letter was being written after that.

According to Jacob, the Tamil Nadu government offered a 40 per cent subsidy, land at half the market value, 100 per cent relaxation on stamp duty, 5 per cent tax reduction for 6 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. 

The Marxists had earlier targeted the Muthoot Group. Violent trade unionism and extortion by CPI(M) had turned Kerala into a ‘graveyard of industry’.