Himachal Pradesh Chief Minister Prem Kumar Dhumal is busy lobbying with the Centre to extend the March 31, 2010, deadline for the tax holiday package which has transformed his state into an industrial hub in the past seven years. He has already succeeded in getting Commerce Minister Anand Sharma to echo his views in Delhi and hopes to convince others — Finance Minister Pranab Mukherjee and Prime Minister Manmohan Singh — on the need for three more years of tax exemption to complete the industrial growth roadmap. Simultaneously, Dhumal is also busy announcing infrastructure development projects and facilitatory centres for easy regulatory clearances to see that the growth continues even if the worst — the end of excise holiday — happens. In a media interaction, Dhumal listed out his achievements, expectations and plans for the growth of an industrial Himachal Pradesh. Edited excerpts:
What did the seven years of tax holiday bring into the state?
After the package was announced, we registered 36,518 (industrial) units in the state (as on February 28, 2010). It has brought in an investment commitment of Rs 9,131.97 crore and employment to 237,196 people. This includes 429 medium- and large-scale units in sectors such as pharmaceuticals, food processing, textiles and electronics. Of these, 6,356 units have already started production, bringing in an investment of Rs 6,522.24 crore. These units employ 82,441 people, 79.9 per cent of whom are from the state.
Are you getting an extension of the tax holiday? It is learnt that you are lobbying hard for it?
The finance minister called me to say he would look into the matter. (Commerce and Industry Minister) Anand Sharma has already favoured another extension for the tax holiday. I hope the prime minister will take a (positive) decision on this.
The history of Indian industry shows there are companies that set up industrial units to enjoy tax exemptions and move out when the holiday is over. Do you have a strategy to retain the units even after the exemptions are over?
As you said, the history has had such instances. But, we are not here to repeat the history. We have to create one. The excise duty exemption was a major incentive, but there also are other factors that proved attractive to the industries. We are providing the best possible facilities for industrial growth. The state continues to be the most industry-friendly in terms of decentralised regulatory approval and licensing facilities and less law and order problems, and, more importantly, as a region that offers uninterrupted power supply. Even if the excise duty exemption is withdrawn, the income-tax holiday will continue. The industry-friendly environment will remain.
Any early indications that industries are here to stay... tax exemption or no exemption?
Hero Honda has shown interest in setting up an integrated production facility in the state. It has plans to invest over Rs 2,000 crore in setting up a plant to manufacture motorcycles. It requires 400 to 500 acres of land and we have shortlisted a few areas. The project is coming up irrespective of the excise-free status.
Similarly, a textile park in Una has attracted the Jindal group to the state. Nestle is interested in a facility. There will be projects and new employment avenues here.
Infrastructure bottlenecks are far from over. Any special thrust on this?
Highest budgetary allocation has been for the development of roads, water supply, etc. For instance, the Kala Amb industrial area — one of the important industrial hubs, with 321 registered units — has seen 11 developmental works. Rs 19.79 crore was sanctioned for these in the last two years. I have sanctioned Rs 55 lakh today for setting up a water supply system in the region. It will be complete in three months.
Similarly, we are setting up regional offices of the pollution control board, drug regulatory department, public works department, electricity office, etc, to ensure the industries do not have to come all the way to Shimla for approvals.