INDIAN STATE : KERALA

Cashew Industry

The total export of cashew kernels from India during 2004-05 was 126667 MT, valued at Rs. 2709.24 crores by showing an increase of 25.63 per cent in quantity and 50.14 per cent in value. The export of this item from Kerala during 2004-05 was 79950 MT worth Rs. 1715.94 crores. It shows that the share of Kerala is at 63 per cent in terms of quantity and value. More than one crore additional man-days of employment generation in rural area were made possible
during 2004-05 due to the creditable efforts of the cashew exporters.

The unit export price of cashew kernels went up during 2004-05 and the average unit export price realized was Rs. 213.89 per Kg compared to Rs.178.96 per Kg during the previous year, recording an increase of 19.52 per cent. The unit price of cashew nut shell was Rs.10.58 per kg during 2004-05.

Mining

Kerala is rich in deposits such as heavy mineral sand, china clay, iron ore, graphite etc. Heavy mineral sand and china clay contribute a higher share of the total value of mineral production in the State. Department of Mining & Geology has undertaken exploratory drilling for china clay at the following areas

1. Erikulam and Paivalike area in Kasaragod District
2. Kadayattu near Mulavana, Kollam District

Major incentives taken for mining industry

• Environmental appraisal at various tile clay mining sites in Thrissur to ascertain the availability of sand below the clay horizon
• Investigation to map the landslide prone areas in Nadapuram, Kozhikode district
• Field study to ascertain the environmental impacts due to sand mining at Kattikunnu area of Kottayam district, Neyyar in Thiruvananthapuram district and Chavara in Kollam District
• Geotechnical studies at the proposed site for Medical College in Vattiyoorkavu Panchayat
• Impact study due to dredging activities for limeshell in Vembanadu Lake

Tourism

Success of any tourism sector depends on its scenic grandeur, moderate weather, fresh environment, hospitable and peaceable people with high tolerance for cultural diversity and the potential for creating unique 'tourism products'. Kerala is one destination that holds all these qualities and is increasingly rated as one of the must-visited destinations by foreign tourists as well as domestic tourists. In 2004, 345546 foreign tourists visited Kerala as against 294621 in 2003, showing an increase of 17.28%, which constitute 10.26% of total foreign tourists, visited India. Kerala also boasts of becoming a tourism brand listed among the 101 strongest brands in India by super brands India Pvt. Ltd and has been accorded the highly popular "Super Brand Status"-internationally known as the 'Oscars in the world of branding'. Kerala Tourism enjoys the privilege of being the only tourism destination in the listing that is being done for the first time in the country.

Trends in the last few years show an increase in the arrival of foreign touristsin Kerala, in 2004, it recorded 17.28% growth over the last year. The total revenue generated from tourism to the State in the year 2004 is worked out at about Rs. 6829 crores.

According to World Travel and Tourism Council (WTTC)

• Tourism demand of Kerala to grow by 11.6% per annum over the next decade (This is the highest recorded growth in the world, surpassing Turkey's 10.2% as well as India's 9.7%)
• A record growth of 23.5% is also predicted in terms of external account earnings from travel and tourism over the next 10 years (India's estimates for this period are 14.3% while the world average is only 6.5%)
• Tourism employment to be 2 million by 2012.

Major Tourism Destinations some of the major tourist destinations of Kerala are

Triruvananthapuram City, Kovalam, Poovar, Ponmudi, Varkala, Palaruvi, Paravoor,Alappuzha, Kuttanadu, Erumeli, Thekkady, Munnar, Vagamon, Kumarakom, Kochi City, Aluva, Kalady, Cherai Beach, Maradu, Guruvayoor, Chalakudy, Athirappalli,Parambikulam, Nelliyampathi, Malampuzha, Nilambur, Kozhikode City, Kappad,Wayanad, Kadalundinagaram, Muzhupilangad and Bekal

Major initiatives

Department of Tourism has taken various innovative initiatives in tourism sector

• Overall Strategy for marketing
  
• Initiatives in Promotion
  
• Kerala Travel Mart (KTM)
  
• India International Boat Show (IIBS)
  
• Mystiques of Malabar - Exclusive Biennial Travel MART Unveiled North Kerala
  
• Nishagandhi Dance & Music Festival
  
• Kerala's Initiative in Promoting South India
  
• International Television Campaign Extended to New Channels
  
• New Advertisement Film for Kerala Tourism
  
• Kerala becomes theme State in Dubai Shopping Festival 2004
  
• Participation in International and National Tourism Marts

Projects under implementation

Tourism department has initiated various projects for the development of basic
infrastructure at tourist destinations, improvement of tourism attractions at the destinations, creation of new tourism products and creation of en-route facilities.
The projects that are under implementation are

• Constructions of houseboat terminals are being taken up at major backwater nodes such as Alappuzha, Kumarakom, Thanneermukkom, Chettuva, Vadikkal and Neeleswaram. The construction of the terminal at Kumarakom is completed and other are in progress.
• Tourism infrastructure and basic amenities are being developed along the Pamba-Kuttanad backwater cruise routes after detailed studies through NATPAC. Tourist resorts at Pallathuruthy, Nedumudi, Kotharathode and Vattakkayal are being developed.
• Houseboats have been deployed at Neeleswaram, Parassinikkadavu, Kozhikode and Chettuva as part of extending backwater based activities to the Malabar area.Valliyaparamba is already developed as a major backwater centre. At Iringal, Azhhkal,Kotti & Ayittikadavu boat jetty complexes are being developed.

Information Technology

Kerala has all the major infrastructural requirements that are required for the proliferation of growth in the IT sector. Also, no other major State in the country has such an extensive fibre optic network, as does Kerala. Kochi in Kerala is one of India's 2nd tier cosmopolitan cities and is fast emerging as a unique IT destination, It was ranked number two in a report by NASSCOM on the country's Super ITES destinations and number three in a study of cities ideal to do business. Kochi is directly connected by two submarine cables and satellite gateways, which in fact are used to support cities including Bangalore. This clear telecom infrastructural benefit leads to better consistency and reduced tariffs. The year 2004-05 has been a period where Kerala's position in the IT sector was promising and now this is on a steady growth path.

The Government of Kerala has already taken several bold and imaginative policy initiatives that are a pre-condition for exploiting the emerging possibilities

• Techno park - Thiruvananthapuram India's first world-class, world -scale IT campus
• IT Park of KINFRA at Cochin
• Akshaya programme of Kerala IT Mission
• E-governance initiatives of the State Government like Fast Reliable Instant Efficient Network for Disbursement Services (FRIENDS)

Key Considerations

Key considerations to promote IT sector in Kerala

• The ICT policy needs to distinguish between ICT as a production sector and ICT as an enabler of socio - economic development.
• The service sector and, within it, e-governance offers the immediate and largest growth opportunity. Stimulating this market should be the first action point in the State's IT strategy.
• For successful e-Governance implementation the preconditions to be fulfilled include creation of applications and content; availability of adequate access to Internet by the population; having minimal IT literacy; and, above all, ensuring Government's commitment to the success of the programme.
• The strategy for promoting ICT as a production sector- comprising ITS, ITES and Hardware sectors - involves creating infrastructure, human capacity and urban amenities, including life style options.
• The opportunity for training people for ITES businesses, especially call centres has attracted many training companies into the market. Schemes may be formalized for certification of personnel at agent - level as well as at the supervisory - level so that skilled manpower is available to the industry. These certification schemes need to be extended to other ITES areas also like GIS, HR, data entry/data conversion etc.
• The kinds of skills, mostly behavioural, to be developed are communication, team building, leadership, personality development etc. The Government has only to play the role of a facilitator for private initiatives to enter this field.

Achievements under IT

• Malappuram - India's first e-literate district
• Chamravattom India's first e-literate village
• Vellanad and Talikkulam: India's first and second fully computerized Grama Panchayaths
• Akshaya wireless network in Malappuram -World's biggest IP based network
• Palakkad - India's first fully computerized District Collectorate
• State with 99% of its high schools have modern Computer Labs
• First state to use 'Edusat' for on-line learning solutions
• Information Kerala Mission - Single largest computerisation programme for local Bodies and deployment of software developed in an Indian language in the country
• First state to have Citizen's Call Centre on Government related details
• First Technology Park in India to achieve CMMI level 4

Investment Incentives

The Industrial Policy focuses on capitalizing Kerala's unique strengths to accelerate economic development facilitating rapid industrial progress thereby improving the quality of human life.

Under this policy the prevailing rates for State Investment Subsidy would continue.

• Thrust Areas Units under the thrust areas and 100 per cent export oriented units shall be eligible for a State Investment subsidy of 15 per cent of the Fixed Capital investment subject to a maximum of Rs 15 Lakhs.
• Non Priority Sectors These sectors will avail a subsidy of 10 per cent.
• Units in Backward Areas
  • Priority Sectors / Thrust Areas: Units set up in the backward districts (Industrial Centres and parks) will enjoy an enhanced rate of 25 per cent subject to a maximum of US$ 54,201.03 for priority sectors.
  • Non-Priority Sectors: The Non priority sector units will enjoy a subsidy of 10 per cent to a maximum of US$ 21,708.40.
• Pollution Control Devices: Investment in these devices shall be eligible for a 15 per cent subsidy, subject to a separate ceiling of US$ 108,386.66 .
• Existing Units: Existing units undertaking expansion, diversification and modernisation shall also be eligible for subsidy at the above rates.
• Special Package of incentives: These incentives are offered to projects with a capital investment exceeding US$ 10.8330 million (on a case - case basis).
• Infrastructure Projects: Special package of incentives will be offered for large infrastructure projects.
• Units located in Large Industrial Parks: These units will enjoy
  • Exemption from Electricity Duty and Enhanced Tariff for a period of 5 years applicable to new units.
    
  • Waiver of Stamp Duty and Registration Fees.

Scheme / Incentives for the Revival of sick Small Scale Industrial Units

The following incentives are offered to small-scale units that can be revived owing to their viable potential.

• Waiver of penal interest of damages from accounting year of the unit in which it started incurring cash losses continuously.
• Reduction in Rate of interest: Existing rate of interest for term loan to be reduced by not more than 3% in case of tiny/decentralized sector and not more than 2% for other SSIs below documented rate.
• Cash Losses Funding: Cash losses likely to be incurred in the initial stages of rehabilitation programme till unit reaches, break-even point can be financed.
• Promoter's contribution towards rehabilitation package: Minimum 10% of additional long-term requirements in the case of tiny sector and 20% of other units.

Incentives in the Biotechnology Sector

• Approve Biotech interventions and regulatory requirements through an exclusive and effective single window system.
  
• Biotech units will be permitted to acquire agricultural land in excess ofcurrent ceiling limits.
  
• Government lands offered to biotech enterprises at concessional rates.
  
• Industrial power tariff is to be made applicable to Biotech industries.
  
• Key Biotech companies will be awarded power at agricultural rates.
  
• Exemption from statutory power cuts and electricity duty.

Incentives in the Information Technology Sector

The Information Technology Policy (2001-2005) was formulated with a view to ensure the growth the development of the IT growth. The policy also endeavours to delineate a strategy for harnessing the opportunities and resources for the overall economic and social development of the state.

The main incentives offered to IT firms are

• Standard Investment Subsidy of 20 per cent of the Fixed Capital Investment, subject to upper limits
  
• Incentives on slab basis for providing a pre-determined number of employment opportunities
  
• A single time payment of US$ 10852.54 for quality certifications like CMM Level 5, for units with registered office in Kerala.