Highlights of the Budget for 2010-11

Small Scale and Traditional Sector

Rs. 246 crore is set apart for small scale and traditional industries.  In 2005-06, it was only Rs.77.18 crore.

Handloom

The average allocation for handloom industry for the last four years is Rs. 46 crore.  In this budget, this is enhanced to Rs. 57 crore.  The revival package of Hantex and Hanveev will be implemented this year. Rs.10 crore is provided as share capital contribution to these organisations. 

The cumulative loss of mills under TEXFED and Textile Corporation will be around Rs.  100 crore.  But now these mills have reached the break even point.  Apart from the modernisation of mills, the most important step taken in this sector is the establishment of Common Raw Material Bank.  Through this measure, the cost of production has been brought down by at least 10%. Rs. 50 lakh is earmarked for the Institute for Handloom and Textile Technology. 

Other Industries

Rs. 2.3 crore for the Handicrafts sector and Rs. 8.8 crore for Khadi industry. The special retirement plan announced last year for Dinesh Beedi Employees has already been implemented.  Rs. 50 lakh is set apart for KELPAM.

Small Industries

Usually the share for small industries in the budget had been nominal.  Even in 2007-08, it was only Rs. 6 crore.  In this budget, Rs. 40 crore is earmarked for this sector. Out of this, Rs. 6 crore is for the seed capital loan for small scale entrepreneurs. Rs.8 crore is to be given as investment subsidy.

Rs.5 crore is provided for maintenance of the roads of industrial estates under the District   Industries Centres and SIDCO. Rs. 15 crore is earmarked for building a multi-storeyed industrial estate at Thrissur. Under this system, KINFRA will formulate a scheme to start 50 Industrial centres having an average area of 60,000 sq.ft.  The scheme will be made operational by utilising land of industrial estates and Industries Department.  Special preference will be given to those areas where land is provided free of cost.  The outlay of this scheme is Rs. 250 crore.  It is intended to give special incentive to fruits and vegetable processing units. Tax exemption is not possible. Hence, subsidy will be 5% of the annual turnover of products viz., pickles, jam, Juice, squash and jelly sold in Kerala.

Large Scale Industries

The average actual plan expenditure which was Rs. 208 crore for large scale industries, Tourism and IT sectors during the period from 2001-02 to 2005-06, has been increased to an average of Rs.338 crore in the past 4 years. The outlay for these sectors is Rs.412 crore in 2010-11.

If five more institutions are also made profitable, then Kerala will secure the rare distinction of having all the public sector industrial institutions running on profit.  This will be achieved this year itself.  The public sector, which was making a loss of Rs.70 crore in 2005-06, is expected to make a profit of more than Rs.200 crore in 2009-10. It is decided to develop the existing public sector undertakings and to establish new ones. For this, I declare a basic change in the investment policy of Surplus funds of public sector enterprises.

1.  Those public sector institutions having cash surplus even after giving dividend to Government can utilise upto 20% of the share capital from their surplus fund for modernization and expansion without the prior approval of government.

2.  Public sector industrial institutions are permitted to invest their surplus fund for starting new institutions mentioned in the following paragraph as share or loan for the expansion of the existing ones. 

New PSUs

This year, eight public sector undertakings will be newly started with an investment of Rs.125 crore.  It is decided to commission some of these within one year.  This achievement will stand out as the most lustrous golden feather on the cap of the Industries Department.  

i. Komalapuram Hi-Tech spinning and weaving mill (36 crore)

ii. Kannur High Tech Weaving Factory (20 crore)

iii.   New textile Mill Kasaragod (16 crore)

iv.   Traco Cable, Kannur Unit (12 crore)

v. Tool room of SIDCO at Kozhikode (12 crore)

vi. Keltron Unit at Kuttipuram (12 crore) 

vii. New Forging unit at Shornur (12 crore)

viii.  Meter factory of United Electricals at Palakkad (5 crore)

Now the  garment industry  is in centralised parks. Regional parks are more suitable for Kerala. KINFRA will invest Rs.25 crore for this purpose.  Government will  provide subsidy  @ Rs.5000/- per person  towards  training  expenses of labourers recruited to these new parks. Rs.5 crore is earmarked for it.

Modernisation

Rs. 55 crore is provided for public sector industrial enterprises. The expected investment for expansion of existing public sector institutions is Rs.275 crore.

i.  Modernization of KMML (100 crore)

ii.  Steel casting line in Autokast (10 crore)

iii.   Total renovation and new production line of KSDP (34 crore)

iv.   New Production Unit at Kerala Soaps and Oils (5 crore)

v.  Doubling the capacity of Thiruvananthapuram Spinning Mills ( 5 crore)

vi.  Modernisation of Travancore Titanium Products ( 25 crore)

vii.  Modernisation of Travancore Cochin Chemicals (51 crore)

viii.  Doubling the capacity of Malabar Spinning and Weaving Mills (15 crore)

ix.   Modernisation of KEL (30 crore)

KSIDC is  the  prime agency of  government for industrial development. Emphasis will  be  given to expand the industrial loan scheme of KSIDC in the current year.   For  the mega projects undertaken,  including Life Science  Park-Kazhakuttam,  Titanium Complex-Kollam, Thermal Plant-Cheemeni, Footware Park-Kinaloor, City  Gas  Distribution  Project and International Expo Centre in FACT campus, Rs. 55 crore is provided.

Government holds 26% share in INKEL, a joint venture established to attract investments for industrial sector from non-resident Keralites. But due to various reasons the progress has not been as expected. In the current year the shortcomings will be rectified and the implementation of some of the  ventures will be  begin. About 15  Detailed  Project  Reports are being prepared. Rs.3 crore is set apart for the purpose.

Commerce

In order to ensure planned development of commercial sector, Kerala Trade Mission will be  formed.   Employees have to be found out through redeployment from  the  Industries Department.  An institute named "Kerala Institute for Retail Management", first of its kind in India, will be set up for  training in entrepreneurship and management studies. This will be with the participation of industrial and commercial organizations.  An amount of Rs. 1  crore is provided for this.  Out of the Rs. 25 crore earmarked for Grand Kerala Shopping Festival, Rs. 10 crore will be utilised for the following; 

i.  Planning new commercial centres

ii.  Protection of existing  streets and Heritage Centres.

iii.   Campaign for Kerala Retail Brand

A one day State Level Conference on Resurgence of State Owned Enterprise, The Kerala Experience was held in Trivandrum on February 19, 2010. This event was a follow up of a similar event held earlier at New Delhi. This was an occasion to highlight the strides made by Public Sector Enterprises under the Department of Industries and Commerce, Kerala. The conference was inaugurated by the State Minister for Food & Civil Supplies Shri C Divakaran at a session presided over by the Minister for Industries and Commerce, Shri Elamaram Kareem. The Minister for Water Resources Shri N K Premachandran and Dr. K N Harilal, Member, State Planning Board, delivered special addresses. The conference was attended by senior Political / Trade Union leaders, State Planning Board members, senior Government officials and officials from PSUs.

 T Balakrishnan IAS, Additional Chief Secretary, Department of Industries and Commerce, gave a presentation on 'SLPE Restructuring in Kerala'. The conference started off with the screening of a documentary on PSUs. Several prominent TU Leaders and Planning Board members participated in the discussion.

Tex Fair Kerala 2010 will be held in Kannur from January 14 - 20, 2010. The National level fair is being organised by the Department of Industries and Commerce and the Kerala Bureau of Industrial Promotion (K-BIP) is organising the event.

The fair is divided into three sessions - Exhibition of textile products from January 14 - 20, Business Meet from January 18 - 20 and Exhibition by Support Service Providers in Textile sector from January 18 - 20. The prime focus of the fair would be on building linkages between the beneficiaries in the sector and genuine buying houses as well as technical and other support service providers.

The ‘Kerala Sandal’ soap is back in the market. The Honourable Chief Minister Shri V S Achuthanandan launched the revived Kerala Soaps on January 01, 2010. Minister for Forest and Wildlife Shri Binoy Vishwam did the honours of first sale of the soaps by handing over a carton of soaps to Mr. Kammad Kutty, Regional Manager, Civil Supplies, at the venue. Samples of the new Kerala Sandal soap was distributed free of cost to all those who were present there. The other popular brand names like Vep, Thrill and Kairali would also be soon relaunched. Minister for Industries and Commerce Shri Elamaram Kareem presided over the inaugural function. 

In the first phase, the soap factory will manufacture about 6,000 metric tonnes of soap annually. A total investment of Rs.7.5 crore had gone into the revival of the soap unit and the factory work and the procurement of machinery was completed in four months. The soaps would be marketed through Kerala State Civil Supplies Corporation (Supplyco) outlets as also through the hotels operated by the Kerala Tourism Development Corporation. The capacity utilisation will be around 60 per cent in the first year, which will go up to 80 per cent in the third year. The financial break-even level is put at 51 per cent.

It was on January 03, 2009 that the Industries Minister laid the foundation stone for a factory of the new public sector enterprise, Kerala Soaps at Vellayil, near Kozhikode. KSL is a 100 per cent subsidiary unit of the Kerala State Industrial Enterprises (KSIE) and replaces the closed down Kerala Soaps and Oils Limited (KSOL).  Kerala Soaps is utilising the two acre land and factory of KSOL at Vellayil. The new entity estimated to cost Rs.9.7 crores will provide direct jobs to 100 persons and indirect jobs to nearly 300 persons.

The 6th Edition of Kerala Bamboo Fest 2009 was held in Kochi from December 10 - 13, 2009 at the Town Hall in Kochi. The fest was inaugurated by the State Industries Minister Shri Elamaram Kareem. Inaugurating the fest, the Industries Minister said, the State government has approved plans to set up a floor tile factory using bamboo at Kozhikode, using Chinese technology.

The highlight of the fest was the musical start with the release of a compact disc of music from bamboo instruments, including flute and a bamboo xylophone. The inaugural function opened with a prayer on the flute. The Bamboo Exhibition, an event that creates a platform for the Bamboo sector to showcase their skills, products and create linkages with trade, research bodies and industry from all over India was a great attraction with 99 stalls. Seminars on various technologies that can be implemented in the Bamboo sector for better yields and better products were also be held during the fest.

Dr. Gorakh Singh, Horticulture Commissioner, GoI and Shri Kamesh Salam, Director, Cane & Bamboo Technology Centre attended the inaugural session along with senior officials from the Ministry and the Department of Industries and Commerce. The fest is conducted by the Department of Industries and Commerce in association with Kerala State Bamboo Mission and National Bamboo Mission, New Delhi. The Kerala Bureau of Industrial Promotion (K-BIP) organised the event.

The state government formally took over the Kerala Spinners at Alappuzha on Monday, which was shut down in 2003 after it ran into losses. Finance Minister Shri T M Thomas Isaac handed over the keys of the company to Mr. P Nandakumar, Chairman, Kerala State Textile Corporation (KSTC) and Mr. M Ganesh, MD. KSTC is all set to run the company. Dr. Isaac said the event marked a new start as private-run institutions are seldom taken over by the State after being in red. Industries Minister Shri Elamaram Kareem who presided over the function, said new equipment would be purchased for the spinning mill and the existing ones repaired. An initial estimate suggested that Rs.11.9 crores would be required for reopening and running the company. Public Sector Undertakings (PSUs) were being turned into profit-making units by the Left Democratic Front government, he said. Announcing that the government would open a new public sector mill on the premises, Dr. Isaac said the government was also preparing to file a case against the management of the firm, which had deserted the employees and refused to open the mill despite several efforts by the government. Their assets on the factory premises had already been frozen.

Established in 1964 at Alappuzha, Kerala Spinners has been making profits in its early years. But in later years, the company’s profits eroded and ultimately its operations came to a standstill in March 2003. The company was established with a paid-up capital of Rs 51 lakh, out of which the Kerala State Industrial Development Corporation (KSIDC) and the Kerala Financial Corporation (KFC) has an equity stake of 24.86 per cent and 3.92 per cent respectively.