Himachal Pradesh, which is extending incentives and concessions in a big way to attract investment, doesn't know its own industrial potential, including availability of human resource, India's official auditor has said.
There is no mechanism in place to monitor the industrial turnover, value of output and profitability to see whether these are in proportion to the burden of tax concessions and subsidies on the public exchequer, a recent report of the Comptroller and Auditor General (CAG) said.
Blaming the state industries department, it said no survey was conducted by it to ascertain the actual new investment brought in and extent of value addition in manufacturing by the units from 2003 to 2010 when a special industrial package of the central government was in place.
The industries department is not monitoring whether the industrial units set up and provided fiscal incentives and subsidies of the central and state governments under the special industrial package are indeed meeting the objective of 70 percent employment generation for the state's residents.
The CAG also said that the state's industrial growth is not proportionate to the growth of the gross state domestic product (GSDP).
The total contribution to GSDP during 2009-14 by 5,611 registered manufacturing units was Rs.54,367 crore while the total fiscal burden of tax concessions and subsidies on the central and state exchequer was Rs.35,606 crore, including Rs.35,411 crore of the Centre.
It observed a decreasing trend in employment generation which declined from 13,704 during 2009-10 to 6,014 during 2013-14.
The average employment generated by each industrial unit in the period 2009-10 ranged between 10 and 14 against proposed average range of 17 to 30.
The director of industries, in a reply to the auditor on extending incentives and concessions to investors, said the state has difficult geographical and topographical conditions.
The CAG also picked holes in setting up of an effluent treatment plant in the state's prominent industrial belts Baddi and Barotiwala in the Solan district.
The work of the common effluent plant has not been completed till last November owing to delay in getting environment clearance from the minister of environment and forests. Due to delay in the execution of work, the estimated cost of the plant has increased to Rs.60.95 crore from Rs.53.80 crore.
The auditor also said that the work of widening and strengthening of road was not completed in Baddi and Barotiwala till last November due to non-completion of formalities. A sum of Rs.13.74 crore has already been spent on it.
To ensure time-bound clearances of industrial projects, Chief Minister Virbhadra Singh, in his budget speech on March 18, announced grant of permission within 45 days.
There are 502 medium and large-scale and 40,429 small-scale industries in the state with an investment of about Rs.18,307 crore, the state's economic survey for the period 2014-15 stated.
The state's economy is highly dependent on hydroelectric power generation, horticulture and tourism.
