“On behalf of the Government of Telangana, I extend a warm welcome to Rajah SC. I am delighted that he is in Hyderabad in person with us. His contribution to elevate the Arbitration Centre in Singapore as the best in the world is quite well known. I hope that we can benefit from his advice and guidance for making the International Arbitration and Mediation Centre in Hyderabad as the premier centre in our country for alternative dispute resolution. For this act of benevolence, we will forever remain indebted to him,” said IT minister K Tarakarama Rao at IAMC fireside chat in Hyderabad.
In the last 8 1/2 years, Telangana has emerged as one of the best performing states in our country. 8 1/2 years ago when the new state was created, our Chief Minister took upon himself as his first priority to carry out reforms in the industrial sector. He conducted a detailed meeting with leading industrialists from our state and obtained feedback from them about the issues and challenges that confront them. Speaker after speaker had told about the difficulties in obtaining approvals and permissions, dealing with red-tapism and the huge cost and time burden the whole process would impose on them. While on paper there existed a single window system, everyone told that behind the single window are multiple other windows, and opening them would involve a huge amount of struggle. At the same time, Chief Minister also wished to study a global best practice that we can emulate in Telangana. We took him to Singapore, where he spent 4 days studying the Singapore Economic Development Board EDB and interacting with senior government and business leaders.
I am happy to share that based on the feedback that we received first hand, Telangana Government was able to bring out a very progressive and reform-oriented new industrial policy that is called TS-I pass. Incidentally, this was also the very first law that was passed by the new state of Telangana in December 2014. Instead of a red tape, the policy has ushered an era of red carpet for the investors.
The experience of industrial growth and development of the last 8 1/2 years after the passing of the TS-iPass law has been extremely heartening. Telangana has been able to attract some of the leading industries and IT companies from across the world. Some of the top most investors of the world have praised the support and facilitation they have received from the Telangana Government. Our industrial policy has been recognised as one of the best in the world, and many governments have studied its features and have replicated it in their own states.
The most fundamental logic behind the TS-IPass policy is that the government trusts the investors who are making a lifelong decision to invest in our state. We consider them as partners in our progress. Based on this trust, we introduced a system of allowing the companies to commence their civil construction of their factories without the requirement of any prior approval or permission, through a mechanism of self certification. Many critics doubted initially that such a system without tight controls would lead to rampant violations and misuse. But I am very happy to share with you that our experience is completely to the contrary. Very rarely have become across any violation of any existing law by the companies, and even in those rare cases, the deviations are of an extremely minor nature. On the other hand, trusting the companies and helping them in all ways to finish their construction fast and commence their commercial production very rapidly, thereby helping them reduce their costs and save time, we earn tremendous goodwill of the companies, which is repaid back to us in the form of repeat investments. Telangana is a state that shows the highest extent of repeat investments, indicating that our existing investors are highly satisfied with the industrial facilitation and the industrial climate that is available in the state, which makes them bring more and more new projects to our state, thereby creating more jobs and adding to the economic growth of the state.
While we occupy one of the topmost ranks in ease of doing business, we have now started focusing on improving the quality of doing business and reducing the cost of doing business. I have seen countless examples of companies getting into a dispute and litigation which reduces both the quality as well as increases the cost. I am personally aware of many cases of Hyderabad-based industries whose endless battle with prolonged litigation in different courts have taken away not only substantial profits from their balance sheet, but also have wasted precious time and effort of their resources. An institution like the IAMCH can be extremely beneficial in helping the companies get their disputes resolved in an easy manner.
I am happy that IAMCH has made a good beginning and is functioning well. My request to the Registrar and other staff of the Centre would be to create more awareness sessions for industry representatives, particularly their General Counsels, about the benefits of this centre. We will also ensure that whenever the government provides any facilitation to a new industry or IT company which is setting up its unit in our state, we will guide them on how to make use of this facility. I also appeal to all the industry bodies like CII, FICCI, FTCCI, Nasscom and HYSEA to popularise the Centre amongst its members. Having a facility right in our backyard will give much more confidence to the industries and IT companies to successfully carry out their businesses in our state. We should also go beyond our state boundaries and popularise the Centre in the entire country through your national set ups.
As the Minister for industries, I am also aware that many of our MSMEs face difficulties related to disputes and cases of delayed payments. There is a provision in the national MSME Act to set up facilitation Councils to help the MSMEs, and I am happy to share that in our state, besides having one Facilitation Council at Hyderabad, we have also created decentralised councils at places like Warangal, Karimnagar and Nizamabad. However, I come across frequent instances of litigation getting prolonged even in these Facilitation Councils. I will make efforts to align the functioning of these Councils along with the International Arbitration and Mediation Centre and ensure that an alternate dispute resolution mechanism is tried out in all such cases too.