'Biggest Problem Industrialists Face Is From Politicians'

'If you don't fulfil whatever they ask, you are in trouble.'

It is rare to see an industrialist being successful in Kerala which is known for its unfriendly business environment.

Kitex Garments employs thousands of people, but despite this, Kitex MD Sabu Jacob says he is hounded by politicians.

Fed up of all the troubles he faced in Kerala, Jacob decided to move to Telangana in 2021.

He has already invested around Rs 3,600 crore (Rs 36 billion) in two units -- one near Hyderabad and another in Warangal which will soon employ 50,000 people.

Andhra Pradesh's textile minister recently visited the group's facility in Kerala and invited him to set up a unit in AP.

This resulted in a war of words between Jacob and Kerala's Industries minister P Rajeev.

"Tamil Nadu, Telangana, Andhra offer a lot of facilities like free land or cheap land, water and electricity at concessional rates. In addition, they offer incentives like capital subsidy, electricity subsidy and labour subsidy. We get nothing in Kerala. The only thing we get in Kerala is harassment," Sabu Jacob tells Rediff's Shobha Warrier.

The two industrialists who are successful but very critical of the business atmosphere in Kerala -- especially the role of the Communists -- are yourself and Kochouseph Chittilapally of V-Guard. How tough has been your journey as an industrialist in Kerala?

Kerala is a consumer state which is good for malls and retain outlets. Other than that, there is not much of employment generation here. It is a totally different set up.

For an investor in manufacturing or any other sector, I don't think Kerala is the right place.

Till the 1990s, it was labour issues that bogged down an industrialist. We had trade unions and lots of strikes.

During that period, when I travelled from Coimbatore to Kochi, I could see people sitting and striking in front of the factories till the Kerala border.

But today, you will not see a single flag or a single strike.

The attitude or the mentality of the workers has changed. They realised that they had been fooled by political parties.

The fact is, it was the politicians who used workers to make money. People who strike suffer and the industries suffer. The state also suffers. Rather the state loses money, but political leaders and political parties make money.

When this attitudinal change came about among the workers, political parties, politicians and the bureaucratic set up started looting the industrialists.

Today, the biggest problem an industrialist faces is from politicians. If you don't fulfil whatever they ask, you are in trouble.

Harassment is not only from those at the top, it starts right from local party members. It is there at every level.

Other than the harassment by politicians, there are bureaucratic issues. When the political system is corrupt and weak, naturally the bureaucrats will take advantage of that. They also start making money out of the corrupt system.

You mean irrespective of the political party they belong to?

In Kerala, you have only two major parties, the Congress and the Communists.

I can say that the Congress is better, but they are lazy and not disciplined. There is lack of leadership in the party. That's the problem with them. And bureaucrats take advantage of this aspect.

But as far as the Communist party is concerned, right from the local leader, they have only one mentality. They are against people like us, the industrialists.

If there is support, Kerala is the best place to do business.

Unfortunately, it is impossible to do honest and straight forward business here.

But if you feed them (the politicians), you can do any business here.

Would you say the Communists have made Kerala a business unfriendly state?

They have been ruling the state for 9 years now, and they are looting and destroying the state.

Congress MP Shashi Tharoor complimented the Pinarayi Vijayan government for being investor-friendly...

Sometimes people comment without thinking, or without understanding the real situation. He is not aware of the real situation in Kerala as he lives in Delhi. But we are living here and experiencing everything every day. I think he corrected himself later on.

You said industrialists in Kerala don't get peace of mind. What kind of harassment do industrialists face in the state?

Harassment comes not from just one angle. There is harassment from every angle.

First, the state of Kerala does not give any incentive or support. If an investor comes to Kerala, whatever we require -- right from land, water, electricity, human resources -- we have to find on our own. There will not be any financial support.

The government of Kerala gives nothing to investors while states like Tamil Nadu, Telangana, Andhra offer a lot of facilities like free land or cheap land, water and electricity at concessional rates.

Human resources are also available in plenty.

In addition to all these, they offer a lot of incentives like capital subsidy, electricity subsidy and labour subsidy.

On the other hand, we get nothing in Kerala.

The only thing we get in Kerala is harassment. Wherever there is bureaucracy, we are harassed.

The harassment starts with registration of the land.

Then comes clearances from the pollution board, factories and progress, panchayat, environment clearance, and the list goes on.

As it takes years to get all these clearances, you waste such a lot of time. Then at every level, you have to go, sit there and feed the officers.

After completing all the procedures comes the building approval. Even to construct a villa, it takes one-and-a-half to two years to get approval.

Every industrialist, every farmer is struggling here. That's why everyone is leaving the state.

Was it out of frustration that you decided to move to Telangana in 2021?

I will not say, frustration. I felt, why I should waste my money, time and energy.

There are many wealthy people in Kerala who can invest crores of rupees in the state, but they are not doing it. Why?

All of us want peace of mind. That's not there in Kerala. That's the problem.

I will find land, water, electricity. Everything on my own. I am only asking for peace of mind but if I can't get even that, why should I continue here?

When you are treated like this in Kerala, it was reported that you were flown to Telangana in a chartered aircraft by the then KCR government as they wanted you to invest there...

It is true. The government chartered a private jet to have initial discussions.

Then they gave me a lot of facilities and subsidies -- right from land to subsidised water to subsidised electricity.

That's why we invested in Telangana.

I would describe the difference between the treatment I received from Telangana and Kerala as not 'day and night' but 'day and year'!

They treated me like a state guest. They agreed to whatever I asked for.

How much have you invested there?

We have invested Rs 3,600 crores and we employ around 50,000 people, 80% of them are women employees.

Telangana does not have many textile industries, but they produce a lot of cotton which they have to sell to other states. Naturally farmers are not getting a good price. Now, we are going to consume 15% of the state's cotton production, and thousands of farmers are going to benefit from this.

We have two units in Telangana. One is in Warangal and the other in Seetharampur which is just 15 km from Hyderabad.

We started production in the Warangal unit in April 2025 while, production will start in December 2026 in the second unit.

After the change of government in Telangana, do you see any difference? Is that why you are planning to invest in Andhra?

The BRS ruled the state for 10 years. Now, it is the Congress.

Of course, when a new government and new ministers come, there will be some lagging in the initial few months.

After that, it is back to normal, and we have no issues with the new Congress government. We are getting the same support from this government.

That's the difference between Kerala and other states in India. In Kerala, we depend upon the party that rules the state. We may be comfortable with a government but when the next ministry comes, the approach to industry is totally different.

But in Tamil Nadu or Andhra or Telangana, the approach to industry and investors is the same.

For example, it was Jayalalitha who initiated the industrial revolution in Tamil Nadu. And look at Stalin, the present chief minister from the DMK. He is more aggressive, and a lot of investment and industries are coming there.

Except for Kerala, all the other states follow the same industrial policy irrespective of the party that rules the state.

The textile minister from Andhra was in Kerala to invite you to the state. Are you planning to have units in Andhra?

Yes, she came to Kochi to invite me to Andhra. We will definitely go there, explore all the facilities available. We have to see the place, what benefits they are offering, etc.

So, you are open to the idea of investing in Andhra?

Yes..yes.. What does any businessman, not just me, look for? If you get better facilities and better atmosphere to start an industry, you will move to that place.

But it doesn't mean we are moving from Telangana.

We will decide about investing in Andhra depending upon what they offer to us.

Does that mean you will move from Kerala completely?

It was my father who started this business in 1968. Every businessman starts a business to make money and profit. But my father started this business not to make money or profit. He wanted to give employment to the local people, and save the youth.

When many industries diversified to other profitable and less risky ventures, we still concentrate on the most labour-intensive garment industry. Globally also, the textiles sector is the highly labour oriented industry.

We want to give more employment to the people of Kerala, and that's why we continue to focus on garments.

We are still in Kerala because of the ideology our father followed. But that doesn't mean it will be a permanent decision.

If I close the Kerala unit and move to Tamil Nadu or Telangana or Andhra, I can make an additional Rs 400 crore (Rs 4 billion) profit in addition to the Rs 1450 crores profit we made this year.

But I am here because of ideological reasons, and respect for what our father believed in.

In my unit in Kerala, we employ 11,000 people, and in my brother's unit, 6,000 people work. Altogether, Kitex employs 17,000 people.

We are the largest employer in Kerala in the manufacturing sector.

Feature Presentation: Ashish Narsale/Rediff