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CEAT sops spark hope of big-ticket investments in Tamil Nadu

The sops for the tyre maker have raised expectations of revised deals for the state’s existing manufacturers, but industrialists say that a one size-fits-all approach may not work.

Jun 30, 2018, 11.07 AM IST
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Agencies
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The investment by CEAT is estimated at Rs 4,000 crore.
CHENNAI: Prospects of big-ticket investments in Tamil Nadu may have brightened after the state Cabinet cleared an incentives package for tyre maker CEAT, but industrialists in the state are cautiously optimistic.

The sops for the tyre maker - part of the state government’s effort to overhaul its industrial policy and fire up growth — have raised expectations of revised deals for the state’s existing manufacturers, but industrialists say that a one size-fits-all approach may not work.

A senior official with the state’s industries department told ET the cabinet had cleared an incentive plan that will refund 60% of the state goods and services tax (GST) in a revised incentive from the erstwhile value-added tax system. The investment by CEAT is estimated at Rs 4,000 crore.

Industry heads are of the view that the government should formulate a policy that is specific to various sectors, like automobiles, electronics and information technology, among others, rather than a common state GST incentive policy.

“The policy tweaking is a welcome change. But it should not be same for every industry because there will be some industries which are capital-intensive, some capital-light, while some may have more sales within Tamil Nadu, some less,” said Eisenhower Ike Swaminathan, director of operations at Saint Gobain Glass India.

ET had reported in February that Tamil Nadu was revising its industrial policy after four years to suit the GST system. “We have completed discussions with large industrial units like Hyundai, Ford and Yamaha on the new policy, which should be unveiled very shortly,” the official said.

CEAT responded to ET's query regarding its plan to invest in Tamil Nadu with a “no comments to offer”. However, officials in the industries department of Andhra Pradesh confirmed that the project, which was to have come up in the state, is now headed to Tamil Nadu. They added that a unit of Apollo Tyres, which has a facility in Tamil Nadu, will come up in Chittoor (Andhra Pradesh) with an investment of Rs 2,000 crore.

Another official with the state industries department said on condition of anonymity that proceedings reached the level of a cabinet decision only after “assurances” from CEAT that it will invest in the state.

In Tamil Nadu, manufacturers are keen on the state's proposed revision of the incentives structure. “Since the state has so many industries, infrastructure and talent, I'm sure the investments will start flowing in again, provided the government continues to make policy changes as it is doing now,” said Swaminathan.

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