Industries move out of NCR

The survey also highlights that industry owners do not look at Uttar Pradesh as a viable alternative for setting up units.

According to D S Rawat,ASSOCHAM Secretary General,the NCR can no longer be seen as a viable option for either setting up small industries or expanding existing infrastructure.

Nearly 500 small and medium-sized industrial units were part of the sample for the study,among which nearly 75 per cent owners said tax holiday schemes offered for seven to 10 years and lower state taxes are the main reasons why a majority of industrial units shifted to other states in 2007 and 2008. Even the law and order situation has not been conducive for industrial growth in the last few years.

The industries that have shifted away either for capacity expansion and or for even re-starting their operations are industries that deal in auto components,engineering,plastics,pharmaceuticals,IT and telecommunication,including BPO/KPO.

Other industries included in the Fast Moving Consumer Goods (FMCG) sector are biscuit and bread manufacturers,confectionaries and detergents. And most importantly,real estate and construction.

According to the ASSOCHAM survey,2,000 small-scale industrial (SSI) units have shut their offices as a result of expensive power and lack of tax benefits. SSIs have been hit the worst due to a lack of amenities,added with the effects of the global meltdown.

Companies like Lancer Foods,Priya Gold,Haldiram and a number of paper and cardboard industries have already moved away from Noida.

In Gurgaon,over 70 buildings are lying vacant in Udyog Vihar and various other industrial locations. While owners of these buildings search for customers or tenants,IT and BPO industries in Gurgaon are looking for low-cost zones to shift to in view of the current meltdown.

Erratic power supply and water shortage along with increasing number of crime incidents have made matters worse.

The survey mentions nearly 47 per cent of the respondents believe that Ghaziabad and Faridabad,where a large number of engineering,automobile and industrial units were functioning,are in a worse situation due to a lack of infrastructure and connectivity.