From The Times of India: India is developing a land pool nearly double the size of Luxembourg to lure businesses moving out of China, according to people with the knowledge of the matter. A total area of 461,589 hectares has been identified across the country for the purpose, the people said, asking not to be identified because they aren't authorized to speak to the media. That includes 115,131 hectares of existing industrial land in states such as Gujarat, Maharashtra, Tamil Nadu and Andhra Pradesh, they said. Luxembourg is spread across 243,000 hectares, according to the World Bank.
Land has been one of the biggest impediments for companies looking to invest in India, with the plans of Saudi Aramco to Posco frustrated by delays in acquisition. Prime Minister Narendra Modi's administration is working with state governments to change that as investors seek to reduce reliance on China as a manufacturing base in the aftermath of the coronavirus outbreak and the resultant supply disruption.
[..]The government has hand-picked 10 sectors -- electrical, pharmaceuticals, medical devices, electronics, heavy engineering, solar equipment, food processing, chemicals and textiles -- as focus areas for promoting manufacturing. It has asked embassies abroad to identify companies scouting for options. Invest India, the government's investment agency, has received inquiries mainly from Japan, the US, South Korea and China, expressing interest in relocating to the Asia's third-largest economy, the people said.
Labor shortages to hit industrial sector in India
After the massive reverse migration during the lockdown, restarting factories might be a challenge in urban and peri-urban areas due to shortage of workers. Migrant workers are being offered goods welfare package back in their own states to deal with the hardship caused by the COVID-19 pandemic and lockdowns. Attracting them back to workplaces might require offering higher incentives, which many MSMEs may not be able to afford. Here are a few implications outlined in an article in The Economic Times.
After the massive reverse migration during the lockdown, restarting factories might be a challenge in urban and peri-urban areas due to shortage of workers. Migrant workers are being offered goods welfare package back in their own states to deal with the hardship caused by the COVID-19 pandemic and lockdowns. Attracting them back to workplaces might require offering higher incentives, which many MSMEs may not be able to afford. Here are a few implications outlined in an article in The Economic Times.
- Insufficient labor could severely impact construction operations even if supply of materials normalizes in the next few weeks
- There will be stress on logistics and local distribution.
- The India Cellular & Electronics Association expects 30% normalcy by the end of May. Foxconn has got approval to resume production with 10% workforce, but getting labour is turning out to be a big challenge
- MSMEs could resume with just 20-25% capacity
- Food processing would be affected severely due to the shortage of workers and difficulty in getting working capital loans at low interest rates. Retailers usually have stock for just 3-4 weeks.
- Export shipments are being hit due to shortage of workers. In two days, around 10,000 workers engaged at Kandla had registered to return to native states.
- Most workers are unlikely to return for the next three months once they reach home. Local leaders in Uttar Pradesh, Bihar and Rajasthan need to appeal to the workers to stay put in their places of work
Here is chart from Mint showing the sectors badly hit by shortage of workers:
