Pondicherry: The southern state of Pondicherry is in the midst of an aggressive campaign to accelerate the pace of industrialisation. State industries secretary G Narendra Kumar, who is spearheading the movement, is actively promoting a strategy with an initial emphasis on the hardware sector.

Kumar, 35, who has a doctorate in inorganic biochemistry, is aggressively wooing investors to the state, which has assumed the stature of the hardware capital of the country. All major players in the hardware segment - HCL Infosystems, Acer India, Wipro, Samtel India, IBM, Hewlett Packard, Nexus Computers and Proview Infotech, apart from 60 small-scale assemblers - have set shop in the state. The total annual hardware production from the state is pegged at around Rs 2,810 crore.

But other segments are not being ignored. Companies like Asian Paints (proposed investment Rs 139 crore), Sundaram Fasteners (Rs 34.5 crore), Dr Reddys Laboratories (Rs 13.5 crore), Regma Ceramics (Rs 40 crore), Whirpool (Rs 200 crore), DSQ Industries (Rs 158 crore), Boss Profiles (Rs 21 crore), Regency Clay Products (Rs 22 crore) are also set to play a major role in the states industrial agenda.

Rs 722-crore worth of investment is under various stages of implementation. The National Thermal Power Corporation is planning to set up a 1, 000-mw coal-based power project in Karaikal.

A university rank holder in MSc (Osmania University) and an MTech in biochemical engineering and biotechnology (IIT-Delhi), Kumar has unravelled his vision to boost investments in the state, in the backdrop of the proposed introduction of uniform sales tax and VAT, in an exclusive chat with domain-B. Excerpts:

Pondicherrys USP all these years has been sales tax concessions and IT holidays. But this is going to change with the introduction of uniform sales tax and VAT. What is your strategy to main the current levels of investments?
It is true that investors, due to its sales-tax incentives, viewed the state favourably. But it is not the sole reason for our success. The industrial climate is peaceful. We have mature labour unions. The administration is also responsive than other states. In addition, Pondicherry is strategically located to feed the southern markets.
Having said that, because of uniform sales tax, we plan to reintroduce the investment subsidy scheme for thrust industries (IT, biotechnology and other non-polluting industries). The subsidy will be only for small industries and not for large units. We are also devising an incentive package - financial as well as non-financial - lure investors.

Given that land is a constraint and that some areas, which fall under the jurisdiction of the state, are not geographically inside it - Mahe, Yanam and Karaikal are located in Kerala, Andhra Pradesh and Tamil Nadu respectively - investors favour only Pondicherry, and not the other places?
Look at Singapore. It is a small country in terms of size. But it is now an economic powerhouse. Effective planning will do the magic. Moreover, our focus is mainly on attracting knowledge-based industries like IT and biotech. And these industries dont need vast areas of land for operations. We are progressing on the right direction.

What is the administrations industralisation philosophy?
The general strategy is to focus on luring eco-friendly industries. Investments that came into the state in early 90s consumed more water and power. Low-tech industries will generate employment here. While looking at knowledge industries, we found IT as an area with great potential. Taking into account Pondicherrys drawbacks like lack of telecom connectivity and entertainment avenues in attracting software companies, we decided to focus on hardware units first as one can get into software anytime.

But hardware manufacturing in India is just assembling of imported components?
True. Our aim is now to develop micro-hitech industries. We want hardware companies to get into manufacture of components. Some companies have agreed to this. This will create a good hardware-manufacturing base here. To get the software units here, we are building a 1 lakh sq f. technology park at an outlay of Rs 11 crore. To address the connectivity issues the Software Technology Park of India is setting up an earth station here.

With regard to biotech, we are planning to build a biotech park. Our model is different from the one that is being planned in Chennai. We are structuring the park in such a way that each biotech unit will actively interact with our educational institutions. Other states focus on just one sector, say agriculture. Biotech is a fledgling sector in India. Whether one park will be able to attract that many units to make it a success is a big question, but the park will be a broad-based one.