The lack of power, water and even security in the National Capital Region (NCR) is forcing industrial units to move away or expand their base to other states like Himachal Pradesh and Uttarakhand.

According to a survey conducted by the Associated Chambers of Commerce and Industry of India (ASSOCHAM), a lack of basic facilities and incentives in the NCR is forcing industrial units to consider shifting base to other states.

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.

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