The growth of an industry heavily depends on new players, whether big or small, entering the manufacturing space. For a new player, setting foot print in a territory could be a strategic decision as well. He has to keep in mind several factors, the most promi¬nent being "which regions are pro¬manufacturing compared to others?"

"Location cannot be decided just on the strength of incentives but it includes assessment of complex factors of manufacturing processes involved, land required, raw materi¬als/ components required, access to market, manpower, capital require¬ment, city infrastructure, etc. Also the available incentives vary from state to state, location to location. Every state has its positive points and negative points. Having said that, by and large, Bangalore and Hyderabad are. preferred for electronics and Tamil Nadu is preferred for hardware manufacturing. Of late, Gujarat and hill states are also coming up nicely," says GOy. N. Ramakrishnan, president and CEO, Mandate Chips & Circuits, considers union territory areas (like Puducherry, Goa, Daman and Diu) and Uttaranchal to be the most friendly to electronics players, especially for manufacturing.

There have been several attempts by the government to iron out bot¬tlenecks in the interstate business. In order to achieve the same, the central government has reduced central sales tax (CST) - a levy on inter-state sale of goods - from 3 per cent to 2 per cent with effect from June 2008.

As mentioned on the ELCINA website, "Goods an,d services tax (GST) is going to be the mother of all goods taxes. States may have to opt for subsuming all taxes on goods, like pur¬chase tax, under unified GST regime. The government has clearly signalled its commitment to bring in a GST at the centre and states by 2010."