Today’s Business Standard reports that all future MOUs signed by the Orissa government will have more conditions related to value addition, employment infrastructure and ancillary development. Following are some excerpts from that article.

The Orissa government has decided to incorporate new conditions in all MoUs to be signed henceforth with investors proposing to set up projects in the state, to compel them deliver more on value addition, employment, infrastructure and ancillary development front.

At a meeting today, L&T officials made a presentation regarding plans on investment in Orissa and the benefits to flow to the state. According to sources, the company has agreed to upgrade the existing plant of L&T plant located at Kanspal near Rourkela in Sundergarh districts where high end engineering products will be manufactured.
Similarly, it has been asked to set up a technical institution closer to the refinery site and develop a greenfield plant. The company will also be involved in the infrastructure development.

For this, the company has been asked to participate in the Special Purpose Vehicle (SPV) for Therubali-Gunupur Rail Link. Further, in order to promote employment in the state the company will be asked to develop downstream industries, he added. It may be noted, the details of the MOU conditions will be worked out within next 2-3
days before formal signing of the MOU.
…
This changed attitude of the government to extract certain commitments from the industry in MoUs to safeguard the state’s interest is likely to be reflected in the signing of the Memorandum of Understanding (MOU) for the L&T-Dubal project, a joint venture between L & T of India and Dubal Aluminium of Dubai.

This is a good first step; especially the part regarding establishment of “technical institute.” However, it is not clear what kind of technical institute is referred to: an ITI, a polytechnic, or a degree engineering college. The government should insist on all three. As a reference point Jharkhand has convinced Central Coalfields to set up an engineering college in Jharkhand, and Bokaro Steel Plant to set up an engineering college and a medical college in Jharkhand.

Orissa must follow Jharkhand’s example. It should not only require a medical college and an engineering institution (with degree college, polytechnic and many ITIs as part of it) from the new companies but also require it from existing companies; both public and private ones. The existing companies which do not agree to this should be blacklisted and not given any preferred treatment for various things such as permissions, renewals, expansions etc. To discourage them from delaying, an escalation formula should be worked out so that the more the company delays the more it has to put in later.