Himachal Pradesh continues to be an attractive investment destination for the industry even as it discontinued the tax holiday it was offering in March this year.
A senior official at the single window clearance cell for the Baddi-Baritiwala-Nalagarh belt said 42 new proposals worth Rs 500 crore were in the pipeline. These proposals would result in hiring of 2,000 people. The proposals include an investment of over Rs 300 crore from Proctor and Gamble, Ranbaxy and Jupiter Electronics.
“This is the number of proposals about which we have been informed. The number could be higher as there are some business houses who do not want to seek tax concessions but wish to set up their venture in Himachal Pradesh to avail the cheap labour, affordable power and lower fixed costs in form of land in the state,” the official said.
The tax holiday had three major components; eight per cent excise waiver, 100 per cent income tax exemption for five years and a capital subsidy of 15 per cent of the total project cost with a cap of Rs 30 lakh. Only the eight per cent excise waiver has been withdrawn and the other two benefits are still available till March 2013. This has made the state an attractive investment destination.
The April-May period remains a lean season as the business organisations wait for financial results. “We expect good number of proposals for the meeting scheduled to be held next month,” he added.
Baddi-Barotiwala-Nalagarh belt has cornered over 80 per cent of the total investment drawn in the state since the tax concessions were offered in April 2003. According to officials in the industries department, nearly 7,000 crore has been invested in this belt till the January-February period this year.
Some of the local industrialists are dismayed over the lapse of tax exemptions, which were expected to have continued up to March 2013. But factors like availability of stable and affordable power and a conducive environment for industry make Himachal Pardesh a more preferred investment destination than the other northern states.
The units, who are yet to get clearances for fresh investments would still get the benefit of income tax exemption for five years and a capital subsidy of 15 per cent on the total investment with a cap of 30 lakh. For small and medium units a capital subsidy of Rs 30 lakh makes a major part of the project cost.
The Vice Chairman of the Confederation of Indian Industries (CII), Himachal Pardesh, Rajiv Malhotra said the state unit of the CII is talking to the Chief Minister to have a proactive industrial policy in the state.
He said that the state has been complacent on industrial policy because of the voluntary influx of industry in the wake of the incentives package offered by the central government. He stressed on the need to overcome the paucity of infrastructure to help the state maintain the momentum of industrial development.
The incentives of income tax waiver and capital subsidy are more rewarding for the small units. It enables the state to draw more investment from small players who create a huge number of employment opportunities for the local people, he added.
