: The special tax holiday for Himachal Pradesh — sanctioned by the Centre in 2003 to boost investments in the industrially backward state — will end by 2010. The concession was originally granted till 2013, but bigger states, including neighbours Punjab and Haryana, didn’t want Himachal to get special benefits that would put them at an economic disadvantage. Hence, the UPA Government decided to curtail these benefits, first up to 2007, but later to 2010 after protests from the state”s Congress leadership. Now, getting the industrial package extended up to 2013 is a challenging task for Chief Minister Prem Kumar Dhumal, who had convinced former prime minister Atal Bihari Vajpayee and Union minister for disinvestment Arun Shourie to grant a 10-year tax holiday to Himachal.
Last month, Dhumal got a unanimous resolution passed by the state Assembly, asking the Centre to restore the package till 2013. Armed with facts and figures on the losses the state will suffer if the benefits are terminated early, Dhumal met Prime Minister Manmohan Singh and Finance Minister P Chidambaram. He not only pleaded Himachal’s case but also tried to counter claims of the neighbouring states about migration of industries to the hill state. He handed over a letter to the PM mentioning statistics from the Secretariat for Industrial Approvals (SIA) detailing year-wise investment intentions in states — these figures did not indicate any such industrial migration. According to the SIA, in 2007-2008, while Haryana received investment proposals to the tune of Rs 6,350 crore and Punjab Rs 10,737, Himachal was standing at Rs 3,596 crore.
No established industrial group from the two states moved to Himachal and most investment proposals, received by the state were from industrial houses that had little presence in the north.
After the package was announced, the state has already received investment proposals of about Rs 31,000 crore. This is a record for Himachal, which earlier depended on its tourism and fruit sectors. If even half of this intended investment materialises,the state’s economic scenario will change within 10 years.
