Maruti Suzuki on Friday signed a pact with the government of Haryana to set up its third factory in the state, for an investment of Rs 18,000 crore. Haryana Chief Minister Manohar Lal Khattar said the facility is expected to generate 13,000 jobs, more than 10,000 of which will go to Haryana residents.
The Haryana State Industrial and Infrastructure Development Corporation (HSIIDC) has signed an agreement with Maruti Suzuki India Ltd (MSIL) for the allocation of 800 acres of land to set up a new car manufacturing unit, and another with Suzuki Motorcycle India Pvt Ltd (SMPIL) for 100-acre land to set up an integrated manufacturing plant for two-wheelers and their engines, at Industrial Model Township (IMT) in Kharkhoda, Sonipat.
Calling it “one of the biggest investments in the state,” Khattar said, “Today, if Gurgaon has become an iconic destination for investors, it is thanks to the base provided by Maruti, which has started production in Haryana four decades ago.We are heading into a new era of Haryana-Japan relationship.
“Kharkhoda is 65 km from the airport, 18 km from the railway station and the national highway and also has a link to KMP (Kundli-Manesar-Palwal highway). The investment of large companies like Maruti in this area has given a positive boost to the industrial environment. In the coming days, this area will become an industrial hub,” Khattar added.
He said an amount of around Rs 2,400 crore was donated to Haryana through HSIIDC, the largest deal for a plot of land in the state.
Maruti said it has completed the process of allocating an 800-acre site at IMT Kharkhoda with HSIIDC.
“The first plant with a manufacturing capacity of 2.50,000 vehicles per year should be commissioned by 2025 subject to administrative authorizations. In the first phase, the investment would be over Rs 11,000 crore. The site will have space for capacity expansion to include more manufacturing plants in the future,” he added.
Deputy Chief Minister of Haryana, Dushyant Chautala said, “With Maruti and several upcoming auxiliaries, Gurgaon has grown from a small rural area to a global city. We hope that the same development will occur in Kharkhoda.
“Our Kharkhoda plant, where the potential is to produce around one million cars per year, will be a major contributor to meet demand from India and abroad. Subject to favorable market conditions in India, we expect to reach our full capacity in Kharkhoda in about 8 years. Kharkhoda would become India’s largest automotive hub. Maruti’s success shows that there is no alternative but governments and industries in the sector to work together in mutual trust,” said Maruti Suzuki President RC Bhargava.
He added that the Kharkhoda plant will not produce electric vehicles and recruiting skilled labor from the state will not be a problem.
At 800 acres, it will be the largest manufacturing plant for MSIL. Since establishing its first automotive plant in Gurgaon in the 1980s, MSIL has expanded its manufacturing footprint in Haryana by establishing a production plant in Manesar and an R&D center in Rohtak.
Later, at a press conference, Khattar said, “Maruti Suzuki is Gurgaon and Gurgaon is Haryana. Maruti Suzuki is part of Haryana.
Chautala said initially there were reservations that the Local Candidates Employment Act in Haryana state – which reserves 75% of private sector jobs for those in the state – could harm the interests of the industry, but after consultations, certain exemptions were granted and now everyone agrees that the law will help the industry to develop.
On a question regarding the increase in the cost of production due to inflation, Khattar said that the whole process of production depends on demand and supply and market forces, which are not in the hands of of the government.
Responding to another question regarding unemployment in Haryana, the Chief Minister said that different types of figures are presented on unemployment.
“There is a magazine [think-tank CMIE], where people of a particular thought are present. In a survey conducted a few years ago, they estimated that unemployment was 2-3% in Haryana. Next year they said unemployment in the state was 28%. Then they said it was 34%… I joke sometimes they’ll say 100% unemployment. According to data from the Labor Department, the unemployment rate is 8-9%. We have collected data from a door-to-door survey conducted to identify the unemployed through Parivar Pehchan Patra which shows that unemployment is 6.5-7% in Haryana.