Agro-forestry-based industry is all set for a robust growth following tax incentives by the Uttarakhand government.
In a cabinet decision, the government lowered VAT from 12.5 per cent to 4 per cent on fibre and particle boards made from eucalyptus and poplar trees.
This was apparently being done on the request from Greenply Industries Limited which is going for substantial expansion in its Rudrapur plant with an investment of Rs 250 crore.
Officials, however, claimed that the VAT was also lowered in accordance with the recommendations of the empowered committee. Nevertheless, Greenply heaved a sigh of relief as the new measure would provide a boost to ramp up its production.
Besides particles and fibre boards, the government had already lowered VAT on plywood boards to 4 percent.
After the last year’s recession that saw the demand falling by 40-50 percent, the industry based on agro-forestry particularly plywood is now expecting a robust growth in the wake of the real estate business showing signs of recovery.
The last two years were bad for this industry mainly owing to slowdown in the economy and falling exports. But now the Uttarakhand Plywood Manufacturing Association believes that the bad patch is over and the industry would register 25 percent more growth this year as compared to last year. The average production in the hill state is 6,000 cubic meter.
The manufactures are demanding that the government sets up of a plywood and allied products board on the lines of bamboo and coir boards set up by the centre. This, they believe, would solve several of the key issues faced by the industry.
Plywood industry depends on eucalyptus and poplar, the two trees species, which are being grown along with the cash crops by farmers in the northern region. The manufactures in Uttarakhand buy products either directly from farmers or rely on mandis in Yamunagar and other areas in Terai region.
In Uttarakhand, there are nearly 18-20 plywood industries, most of them in Kumaon region.
Taking benefit of the concessional industrial package (CIP) that had offered slew of tax incentives, Archid Plywood, Rama Plywood, Shiridi Plywood had set shops during the past two to four years in the key industrial estate Pantnagar and other areas of Kumaon region. Metro and Orium Sundram have set up manufacturing units at Roorkee in Garhwal region.
Welcoming the tax incentives, Anil Goel, who is also the President of Uttarakhand Plywood Manufacturers’ Association, said the government should also give special incentives and facilities to farmers to encourage the growth of eucalyptus and poplar trees. He said the industry is facing 30 to 50 percent of shortage in raw material.
