With the tax holiday announced for Himachal Pradesh in March 2003 set to expire in March 2010, it is wake-up time for the Himachal Pradesh government, which needs to pull up its socks to ensure no industry leaves the state once the package is over.
The 10-year tax holiday package that was announced for Himachal in 2003 was cropped to 7 years though the state government has been trying hard to bargain with the Centre to restore the package to 10 years. The tax holiday was announced with an aim to attracting investments in the industrial sector and create potential for local employment generation and use of local resources.
As per the department of industries record updated till March 2008, total 34,835 (34,460 small scale and 375 medium & large scale) industrial units with an investment of about Rs. 6,432.40 crores and employment of about 2.13 lakh people are registered with the department. In Baddi and Barotiwala area alone 752 industrial units are functioning with an investment of Rs 2,920 crores and providing employment to 20,000 people of the state.
Even as 6 years have lapsed since the special industrial package was announced , the Baddi-Barotiwala area that emerged as focal point of industrialisation in Himachal, depicts a poor picture of infrastrcuture development.
Deepak Bhandari, vice chairman of Federation of Himachal Industries, said, “Himachal was able to attract fresh investments due to adequate and cheap power, good governance and climate and the tax holiday was an icing on the cake. The average power tarrif is Rs 3.21/ unit for small and medium units and about Rs 2.95 per unit for large units and round-the-clock power supply except for November to February.” He added that amidst so many attractions poor connectivity was a bane. So the state government should plan to upgrade the infrastructure, he said.