Govt on sticky wicket as Centre mum on industrial package extension

The package,which has proved a boon for Himachal’s economy and industrial growth was proposed for 10 years,between 2003 to 2013,but was curtailed first up to 2007,but later extended till March 31,2010. The Congress has joined the state BJP government asking for restoring the package to its proposed duration of 2013.

“It’s a fact that Himachal Pradesh didn’t plan its industrial development in the initial years when the Congress was in power. However,now we have developed infrastructure,tied-up on several projects for mobility of processed goods,social infrastructure and pumped in huge money to meet the needs of industry. If the package is not extended,our entire effort will go waste and will be a huge national loss,” said Dhumal.

During the package period,the state government cleared Rs 29,234 crore investment in large and medium sectors. More than Rs 8,400 crore investment was approved in the small scale sector and Rs 2,181 crore for expansion of existing projects.

“In total,12,649 units were approved with employment avenues for 4.56 lakh people,” said a status note recently prepared by the Industries department. Himachal Pradesh has made it mandatory for industrialists and other investors to provide 70 per cent employment to Himachalis.

Some of the mega investment proposals cleared include a Rs 2,400 crore project of M/s Solaryan Private limited to manufacture solar panels in Solan district,M/s Indorama’s Rs 400 crore project,M/s Met Trade India’s Rs 500 cr project in Una.

Total employment generation in these units could be 3,500 persons,besides opportunities in projects of Steel Authority of India (Rs 105 cr),M/s ITC (Rs 396 cr) and Nestle India (Rs 250 cr). And,to facilitate the new investments,the Himachal Pradesh government has Rs 1000 crore plans underway to create infrastructure,including power supply and road constructions,in the industrial belts.

Till 2003,when the Centre announced tax holiday for Himachal Pradesh,the total investment in the state hasn’t exceeded Rs 3,500 crore. Thus,fears looming large over the state about adverse impact of the Centre’s refusal to extend the package are not really unfounded.

Tax incentives covered under the package include 100 per cent Central excise duty exemptions,income tax freeze and capital subsidy. “There is every possibility that some of the investors,who were lured by these incentives may wind-up shops after having availed the benefits,or those having committed new investments may back out,” a senior Industries department official said.

Neighbouring Punjab and Haryana are opposed to the package for Himachal and are lobbying hard that no further extension is granted. Union Minister for Commerce and Industry Anand Sharma is not averse to another extension of three years,however to only selective industries like IT,food processing and tourism.