Explained: Kitex Group’s exit from Kerala; what state govt is planning to woo investors

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Kitex Garments, the second-largest manufacturer of kids’ garments in the world, recently decided to take a huge project out of its home state Kerala and moved it to Telangana.

Explained: Kitex Group’s exit from Kerala; what state govt is planning to woo investors
After Kitex Garments, the second-largest manufacturer of kids’ garments in the world, decided to take a huge project out of its home state Kerala and moved it to Telangana, the company blamed scrutiny by the state government for its move.
Kitex will invest Rs 1,000 crore in an apparel park at the Kakatiya Mega Textile Park in Telangana’s Warangal.
In January 2020, Kitex had indicated that it will set up three apparel parks in Kerala and had committed to invest Rs 3500 crore in Kochi, Thiruvananthapuram, and Palakkad. These three parks were to come along the proposed economic corridor expected to materialize by 2025.
Why did Sabu Jacob decide to move out of Kerala?
Kitex Garments’ Chairman and Managing Director Sabu M Jacob accused the Pinarayi Vijayan government of “hounding and harassing” the group. Jacob said that the company was subjected to 11 inspections in a month.
There were complaints by a Congress MP, a Congress MLA, besides a woman employee, The Print reported.
Jacob said the inspections were a way of “harassing” entrepreneurs like him. He alleged that the officials who came down to inspect the company behaved as if they were looking to nab thieves and robbers.
The Kitex Group, founded by late MC Jacob in the 1960s, employs over 10,000 people and is one of the large private sector employers in Kerala.
11 inspections in June
Kerala’s Industries Minister P Rajeev was quick to clarify that the government did not initiate any suo motu inspections on Kitex. The Health and Labour departments conducted the inspections, he said. The two departments had followed the orders of the Kerala High Court and the National Human Rights Commission that had received complaints. Issues were raised about the treatment meted out to Kitex workers and the discharge of effluents polluting a nearby river.
Is Kerala lagging behind other states?
According to Jacob, Kerala is still 50 years behind in upgrading its ecosystem and that it lacked a conducive climate for any business to grow.
Harsh Goenka, Chairman of the RPG Enterprises, which has a huge presence in the Rubber and Tea industry in Kerala, tweeted his support for the Kerala government. “We are the largest employers in Kerala. We find the local government very supportive”.
His tweet was in response to economist Shamika Ravi’s tweet which said, “If you have ever wondered why Kerala continues to have twice the unemployment rate as all-India, this should be an important case study to follow. #EaseOfDoingBusiness”
Kerala Chief Minister Pinarayi Vijayan defended the state’s business environment and claimed Jacob’s remarks were “motivated”. He pointed to the sustainable development index prepared by the Niti-Aayog in which Kerala was ranked first.
A political twist
The Kitex group’s CSR wing Twenty-20 is active in politics. The party was floated to make Kizhakkambalam panchayat the best in the country by 2020 and had even won the 2015 local body polls losing in only one ward.
In the 2020 poll, it retained power and secured seats in three other neighbouring panchayats. Though they contested Assembly elections too, the move was not appreciated by both the Congress and the Communist Party of India (Marxist) leadership.
The Kerala government is drafting a bill aimed at improving the ease of doing business for manufacturers. According to The Print, the bill proposes to do away with overlapping inspections by multiple departments and minimising disruptions to the production cycle.

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CompanyPriceChng%Chng
Hindalco418.45 18.40 4.60
Tata Steel1,330.00 32.05 2.47
SBI Life Insura1,102.15 25.50 2.37
Bajaj Finserv13,803.85 278.80 2.06
SBI430.40 7.10 1.68
CompanyPriceChng%Chng
Tata Steel1,331.50 33.40 2.57
Bajaj Finserv13,806.90 281.55 2.08
SBI430.30 7.00 1.65
Bajaj Finance6,232.85 70.70 1.15
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