‘Investors are confident the economy will revive soon’
“Without correcting our complex labour laws, we can’t expect industrial growth”
Himachal Pradesh recently hosted Rising Himachal 2019, a global investors’ meet in Dharamsala, to attract private sector investment. The state is now planning to make a push towards labour reforms in the forthcoming winter session of the assembly. This will be one of the toughest challenges for Chief Minister JAI RAM THAKUR, who says as much in a candid interview with Anilesh S. Mahajan. Thakur was expansive on the many changes he believes are necessary to encourage private sector investments in the state. Excerpts:
QInvestor summits have been around for more than two decades, but Himachal Pradesh is only now getting in on the act—in the middle of an economic slowdown. How are you presenting the state to the investors?
We were open to all sorts of investments instead of focusing on just a few sectors. This made room for investment proposals from small, medium and large players at the summit and helped us understand the emerging trends from these participants. We know that most MoUs do not translate into investments, but the handholding of investors and addressing their concerns begins here. It sets up real investments. We are ushering in changes in governance and policies to fulfil these commitments.
For the past few years, private investments in the country have been dipping. According to the RBI’s reports, private sector players are only using 7080 per cent of their current inventories, which makes it unlikely that they will invest in new capacity anytime soon. How are you convincing them to invest in your state?
I agree with your assessment, but we can foresee changes. There is a stable government at the Centre and in the state. The investors are confident that the economy will revive soon. Most of our projects require less investment. Plus, some are a blend of private and public sector investments. In the case of hydroelectric projects, for example, we have sought investments from central government PSUs like SJVN, NHPC and NTPC. These, though they may take some time, are assured investments and will create job opportunities. Private players are also interested in creating supply chains for existing products. For example, they are interested in the food processing industry to set up marketing chains for horticulture.
The World Bank has pointed out that our government does not adhere to the sanctity of contracts, that there is a need for better payment mechanisms and changes in our labour laws. For this, you will have to build a consensus not only with the people outside the party, but also with the affiliates of the RSS. How are you assuring investors on these issues?
We have notified five to six big policy changes in the recent past, making processes simpler, but the system needs more improvement to preserve the sanctity of contracts and develop timely payment mechanisms. Similarly, without correcting our labour laws, we can’t expect industrial growth. I understand that labour reforms are difficult to execute in Himachal, but our government will try. We are planning to bring the amendments in the forthcoming winter session of the state assembly.
The industry wants flexibility in ‘hire and fire’ rules. There have been regimes, in Rajasthan and Madhya Pradesh, where this has backfired. The biggest protests came from RSS affiliates led by the Bharatiya Mazdoor Sangh.
That is why we have formed a group of officials to study these reforms. Apart from comparative analysis of the work done in other states, they will also predict the ramifications and benefits of these reforms. We will consult all the labour unions in the state besides seeking feedback from other Sangh organisations active in these sectors. Apart from changes in labour laws, Himachal will have to work with the youth to reskill them for a changing work environment. Our government is committed to bringing in change and creating more jobs.