The Union Budget 2010-11, which failed to mention anything on the extension of central industrial package for Himachal Pradesh till 2013 (as demanded by the state), has left the state bemoaning.
The industrial package for HP, that was announced in 2003 for 10 years and subsequently reduced to seven years, would end on March 31. The package allows industries to avail 100 per cent exemption in excise duty for a period of 10 years from the date of commencement of commercial production, besides 100 per cent income tax exemption for initial period of five years and thereafter 30 per cent for companies and 25 per cent for other than companies for a further period of five years from the date of commencement of commercial production
The state government believes the industrial climate would take a beating because of non-extension of the industrial package by the Centre.
According to state industry department records, from January 2003 till December 2009, the state industrial department had cleared the proposals for 12,802 new industrial units (small, medium as well as large), envisaging investment of Rs 40,000 crore. The records reveal that while 6,151 units started production during the period, expansion projects of 288 units were completed with total investment of Rs 6,326.84 crore.
Disappointed over the non-extension of industrial package, industrialists maintain that Himachal needs to draw the road map for future so that investment by industries continues in the state.
The state needs to rework on the industrial policy and bring in few amendments that would foster the industrial climate.
Former CII Himachal Pradesh State Council chairman A R Singh said the government needed to focus on infrastructure where industry had already moved in. Apart from focusing on infrastructure and retaining the existing industries, the government had also to highlight certain positive features for further encouraging the industrial investment, he said.
The industrialists maintain that among many positives for the state industrial climate, was the law and order situation and also availability of power that could be leveraged to attract the industries.
Former chairman, CII, Himachal Pradesh State Council Ashok K Tandon said the government had to create model infrastructure for the industries in periphery that already had set their bases in the state.
Besides this the government also needs to focus as to how industry could be encouraged to move to interiors of the state so that more and more people could derive benefits from the industrialisation in the state.
Sources in the industries department who requested anonymity maintain although they are disappointed with industrial package not getting any extension, they were working on roadmap that would be drawn for the future to attract industries in the state.
