A few days ago, Shinzo Abe led Japanese government announced financial package for Japanese companies which are planning to shift their base out of China. Out of a stimulus package worth whopping 108.2 trillion yen (US$993 billion) – equal to 20 percent of Japan’s economic output –it has earmarked US $2.2 billion to help its manufacturers shift production out of China.
220 billion yen ($2 billion) is pledged for Japanese companies shifting production back to Japan and the remaining 23.5 billion yen for those seeking to move production to other countries.
Japan is not the only country which wants its companies to move their manufacturing base out of China. Many developed nations in Europe and America, which have manufacturing plants in China, are also planning for the same United States is mulling over to incentivize the companies planning to shift production base out of China to their own country, or some other country with cheap labor and strong government like India, Bangladesh, Vietnam.
The Yogi government in Uttar Pradesh is planning to capitalize on this opportunity with both hands. CM Yogi Adityanath has directed the bureaucrats to prepare a special package which could be offered to these companies, in addition to thebexisting benefits.
“The chief minister has directed the industrial development and MSME department to formulate a package for these companies, which could be offered in the second round of our investment garnering exercise,” UP additional chief secretary Awanish Kumar Awasthi told the media.
The Yogi government has organized various investor summits and expos in the last few years to attract private investment. And these events have been quite successful, with promise of investment worth 4.68 lakh crore rupees in UP Investor summit and more than 70,000 crore rupees in the defense expo organized a few months ago.
UP has the existing capacity to replace China as ‘factory of the world’ with a population of 22 crore and a young demography. But the state has not had an investment friendly government in the last few years.
The Akhilesh Yadav government projected itself as investment friendly and tried to attract investment but the first thing the companies seek to start and project in a particular region is rule of law. In the Akhilesh Yadav government, the state has registered huge increase in crime against industrialists and rich people. The leaders of Samajwadi Party used to extort money from industrialists in the name protection and party fund, and many were killed in daylight because they refused to contribute.
But after Yogi government came to power, the first thing to get fixed was policing system. The government made good investment in policing and increased the budget by double digits. With the investment in policing and political backing, many encounters of the criminals were carried out and the corrupt leaders who extorted money from industrialists were put behind bars.
Now UP is one of the most efficiently administered parts of the country and ‘rule of law’ prevails in the state. Therefore, the industrialists have no qualms over investing in the state, which is not just being governed efficiently but the government is also providing various incentives for investment.
The Yogi government has been pro-active in dealing with Coronavirus and has already set up committees to assess the financial and social impact of lockdown on 11 sectors- industry, construction, revenue, labour, education, agriculture, social welfare, rural development, urban affairs, water and handicapped welfare. The Yogi must be applauded for transforming the state from nightmare for industrialists to heaven for law abiding companies.