There is a pressing need to have a bold policy for industry, shedding the reliance on industrial incentives and encouraging investments in cutting-edge research and technology. This was recommended by the Confederation of Indian Industry-Northern Region in its pre-Budget memorandum to the Rajasthan government.
Rajiv Jain, chairman of CII, Rajasthan State Council, believes that in the present scenario, the state government is increasingly required to play the pro-active role of facilitator for industrial development. The states are vying harder with each other to attract the requisite industrial investments.
In this context, the industrial policy of the state must incorporate various facets of industrial development, giving importance to technology upgradation, quality improvement and productivity, besides infrastructure development, so that the industrial units of the state can successfully face global competition.
On the issue of industrial incentives, Jain strongly feels that the impact of various schemes has not been encouraging. Long-term incentives just led to the creation of inefficient and uncompetitive industry, not to mention the need for doing away with all tax-based incentives in the light of the upcoming VAT regime.
CII has suggested that all tax-based and other fiscal incentives be soon phased out. The authorities must, however, allow the industry to continue availing hitherto sanctioned incentives till their expiry, particularly since all such incentivised units had factored in these sops.
To enable a competitive industrial community in the long run, CII-Northern Region has strongly advocated beefing up research and development (R&D) facilities and modernising existing units. The key recommendation in this regard pertains to strengthening testing and calibration facilities in the state so that more units are in a position to compete with international standards and find export markets for their products.
Another suggestion is to link the existing R&D institutions in the state with various facets of industry like technical training, summer training of students and technology development of industrial projects.
Finally, the government needs to create technology-linked financial support for industry through programmes with the government of India. This should go a long way in avoiding technological obsolescence in industry.
To effectively play the role of facilitator and create an industry-friendly image, CII-Northern Region has suggested that the directorate of industries create a website to make available the programmes and policies of the department to a large audience of prospective entrepreneurs.
Furthermore, it is advisable to create a data bank of information to help the industries in processing projects, identifying technologies and relevant services available in the state.
CII-Northern Region has urged that such initiatives, coupled with an increased stress on the provision of quality infrastructure, shall help create a conducive environment for industry.
