American Chamber of Commerce in India
Apex Chamber of US Industry in India

Meeting with Industries Secretary, Government of Tamil Nadu – 8th November 2016

An AmCham team led by Mr. R. Ramkumar, Chairman – Tamil Nadu Chapter, AmCham, Mr. A. Viswanathan, Vice Chairman – Tamil Nadu Chapter, AmCham and Aubrey Daniels, Regional Director – Tamil Nadu Chapter, AmCham, met with Mr. Vikram Kapur, Principal Secretary to Government of Tamil Nadu, Industries Department on Tuesday, 8th November at the TN Govt. Secretariat, Fort St. George, Chennai.

The meeting was to engage with the state government and to apprise the Secretary on some of the key issues that required intervention and closure. Some of the key issues discussed were:

1) Renewal of consent to operate establish to be granted by the Pollution Control Board

Our member companies on the manufacturing side have been filing applications for renewal of consent to operate on an annual basis. Some members have raised concerns that even though they have complied with all the conditions and have filed the applications on time, the renewal of the consent to operate is still pending – in some cases, even more than two years. For multinational companies, non-receipt of such statutory approvals on time is considered a serious issue and it is very difficult for the Indian subsidiaries to explain to their global headquarters why the approval is pending for such a long time.

Recently, the state government has announced that renewal of the consent to operate can be applied at one time for a period of five to fourteen years (depending on the category of the industry) which is a welcome move. To further enhance the ease of doing business, we suggest that when an application is filed for renewal of consent to operate, there should be a time limit fixed for grant of the renewal of the consent to operate if all conditions are complied with, so that the companies do not have to wait endlessly for the renewal and there is no uncertainty.
2) Industrial incentive for mega/large scale industries – capital subsidy

As per the state government’s industrial policy, companies investing above a specified limit in a new plant, are eligible for capital subsidy from the state government. Our member companies have filed applications with SIPCOT and have been following up for a long time, but this remains a long pending issue with SIPCOT.
3) Setting up a food court in SIPCOT Industrial Estates

In many of the SIPCOT Industrial Estates, there are several workers in small units that do not have a cafeteria/canteen. In addition, there are visitors, truck drivers and other logistics providers who look for a common canteen facility. It will be helpful if a food court can be set up in SIPCOT Industrial Estate and this can be tendered out to some contractors.

4) Reimbursement of VAT under MoUs with MNCs

Some of our members have set up their plants in the state in line with MOUs they have signed with the state government under which they have been granted VAT incentives. They would like to know how the state government proposes to transition these VAT incentives into the GST regime.

5) Proposed cap on the total number of non-permanent workmen (apprentices plus contract)

In some of the engineering industries, especially automotive sector and capital goods sector, the nature of the business requires flexibility in the number of workmen to address fluctuations in demand on account of market volatility as well as seasonal requirements. To address this, companies have been employing a mix of permanent workmen, apprentices and contract workmen (especially in some non-core areas) to cater to fluctuations in demand without being burdened by excess labor force.

Recently, there was an amendment proposed by the state government to the Industrial Employment Standing Orders Act, whereby a ceiling is sought to be specified on the total number of non-permanent workmen as a percentage of the total permanent workmen in the factory. Our members feel this would adversely impact their flexibility to meet the ever changing market requirements and hamper the ease of doing business. Considering that such a proposal could affect the state’s ability to attract and retain industries, our members are requesting that the state government reconsider this proposal.

Mr. Ramkumar invited Mr. Vikram Kapur to address AmCham members at the December breakfast meeting to whih the Secretary agreed.


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