The latest report on the competitiveness of Indian cities, released by the World Economic Forum, classifies Chennai as a city that is not “easy to do business in”. Ahmadabad is now ranked the best location to set up an enterprise. That may reflect the current political situation, but there is no denying that our city, which was holding second position four years ago, has slipped several rungs.
The reasons are not far to seek. The continuing power shortage is considered to be the biggest and most visible issue, but there are several others. One of these is the inordinately high price of land in the city and its environs. The second is the failure in providing infrastructure in most locations. The last and, perhaps, the most important is the inaccessibility of decision-makers in the Government.
That Chennai has been unable to provide land at reasonable rates for the setting up of industries may come as a surprise to many. After all, this was where the concept of industrial estates first came up, with the Tiru Vi Ka Estate in Guindy having been set up in 1958. Since then, several others have come up in and around the city, but all of them have long lost their original character. Most have turned IT Parks, vehicle servicing centres, and newspaper offices. As for the feasibility of new estates, forget it. The Government has long stopped creating land banks for such purposes and can now do so only by expensive acquisitions. A solution for this can be the encouraging of industries to move to Tier II towns in the State. But the lack of infrastructure in such places is daunting, to say the least.
Not that the infrastructure is any better in the city. Expatriates have, by and large, expressed their disappointment at what is available. When the IT Expressway was first planned, it was touted as a model of what civic services ought to be. But when it was developed it delivered hardly anything of what was promised. Six lanes yes, but nothing more. And as for the surrounding ‘colonies’ that came up, despite most of them being set up newly and, therefore, not having any of the problems that are traditionally faced by older neighbourhoods, they followed the same patterns of development. Narrow roads, infrastructure FOLLOWING land development and not the other way round, and a plethora of violations, all together put further stress on the environment.
The last and, perhaps, the most serious issue is the inaccessibility of those in power to industrialists. It is reported that with decision making being strongly centralised, very few Ministers and Secretaries are interested in meeting entrepreneurs and businessmen and sorting out the problems they face. As a consequence, Tamil Nadu and Chennai are faced with a very piquant situation – in the last two months, Chief Ministers from States up north have begun coming here to make presentations on their respective territories and the helpful concessions they are prepared to offer companies setting up plants in them. It is, of course, well known that at least three major organisations that have manufacturing facilities around Chennai have already announced that their second phase of development will be in States in the northern part of India. One of them has rather pointedly stated that they would prefer to be where they are “closer to decision-makers.”
The State Government has been promising a Global Investors Meet for long. The latest we have heard is that this has now been postponed to March 2015. The timing could not be worse – March is the financial year-end for majority of companies and most of them will be scrambling to close what has been a tough year. All this does not bode well for a city that was once touted as the best location to do business in. We hope the administration wakes up and reads the signs.