In January 2020, Sabu Jacob, chairman of Kitex Garments group, had signed to invest in projects in Kerala at the ‘Ascend Global Investors Meet‘. The Kerala government organised the event in Kochi. However, alleging harassment from the state authorities, this industrial group decided to withdraw its investment project worth INR 3,500 crores. The Kitex controversy brought to light the red-tapism and difficulties in conducting large-scale operations in Kerala. Ever since this, many well-known businesspersons came forward to highlight how Kerala isn’t an investor-friendly state.
What happened in the Kitex Controversy
The projects included an apparel park and three industrial parks at Kochi, Thiruvananthapuram and Palakkad. It projected the employability of 35,000 people. Kitex Garments acquired land to kickstart the apparel park. The aim was to finish the completion of the project by 2025. However, Kitex Garments faced a lot of difficulties in continuing their operations smoothly.
There were 11 surprise inspections by officials in a month. “Forty to fifty officials come down in ten or fifteen vehicles and storm into each floor of the buildings and question the women, and take down their name, address and phone numbers. Each time, they spend three or four hours to question three hundred to four hundred people, but they haven’t told us yet why they are conducting the inspection or what they have found out.”, shared Sabu Jacob.
Kitex has been under the Government’s radar ever since Jacob kickstarted the corporate social responsibility (CSR) wing of the Anna-Kitex group, known as Twenty 20. It turned into a political party and is well-known for its welfare programmes in the Kizhakkambalam panchayat. The party contested six seats in Assembly elections this year but did not win any. However, the Congress and the Communist Party of India (Marxist) in Kerala sees them as tough competition.
Jacob has gone on record to say that he doesn’t want to leave his home state but the Pinarayi Vijayan-led Left Democratic Front government has hounded him. He disappointingly shared, “The whole world has changed, but in Kerala, it’s still 50-years behind. We have been doing business in Kerala for the past 53 years. I feel really worried about our young generation as there are no jobs for them. Just look around 6.1 million Keralites are working outside the state and abroad. Gone are the days when men from Tamil Nadu used to come to Kerala for jobs. I wish no Kerala businessman faces the situation that I have been facing for a while.”
“The only thing that an investor seeks is peace of mind and that’s what I have not got in my home state, which I love the most. I am not going out from here on my own, instead, I am being driven out. I did not get a single telephone call from anyone here ever since I raised my apprehensions, while I got a call from the Chief Ministers, Ministers and others from nine other states in the country,” he further added.
P Rajeev, Kerala’s Industries Minister said that the Government wasn’t responsible for the inspections. Upon receiving complaints, it was the National Human Rights Commission (NHRC), Kerala High Court that initiated the inspections.
When the news of Kitex Gramets investment withdrawal was announced, Telangana’s minister for industries, K Taraka Rama Rao approached Jacob. He wanted Jacob to consider investment in their state. He even arranged a chartered jet to meet Jacob directly. According to news sources, Taraka talked about the incentives of investing in Telangana. The state offers some of the finest kinds of cotton in the world. After a three-hour-long meeting with KT Rama Rao, Jacob was flown to Warangal’s Kakatiya Textiles Mega Park. He made his final announcement after receiving a good impression of the proposal.
On July 9th, Sabu M Jacob announced that Kitex Garments will make a phase-I ‘Textile Apparel’ investment of Rs 1,000 crore in Telangana. It would be conducted over a span of two years in the Kakatiya Mega Textile Park in Warangal. This project would create 4000 jobs in Telangana.
The whole Kitex controversy has led to a huge loss of investment and loss of employment opportunities for the people of Kerala. Unwanted bureaucratic control and political influence seem to have led to a major fallout. Sources state that the Kerala government is ready to talk it out with Jacob, but are yet to get a response from him.